The goods in form of raw material lying in the custody of the Corporate Debtor for processing under the contract of the bailment, The Resolution Professional cannot withhold such goods – KEC International Ltd. Vs. Mr. Bhuvan Madan RP for Diamond Power Infrastructure Limited – NCLT Ahmedabad Bench
September 15, 2020
NCLT held that from the pleadings of the parties, it is abundantly clear that the goods in dispute are not assets of the Corporate Debtor Section 18(f) states that the Resolution Professional to take control and custody of any asset over which the Corporate Debtor has ownership rights as recorded in the balance sheet of the Corporate Debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including....". Explanation to this sub-clause make it clear that the "assets shall not include assets owned by the third party in possession by the corporate Debtor held under trust our under contractual arrangements including bailment...". In this case, the goods in form of raw material lying in the custody of the Corporate Debtor for processing under the contract of the bailment. The Resolution Professional cannot withhold such goods.