Ownership dispute during insolvency moratorium period: Adjudicating Authority lacks jurisdiction. Seek resolution post-moratorium.

The appeals were dismissed, affirming the Resolution Professional's determination that the materials belonged to the Corporate Debtor. The Adjudicating Authority lacked jurisdiction to decide ownership disputes during the moratorium period, emphasizing that such matters should be resolved post-moratorium through legal channels. Parties were advised to seek resolution through appropriate forums after the moratorium. The judgment underscored the limitations of the Adjudicating Authority's powers during the Corporate Insolvency Resolution Process and upheld the procedural framework under the Insolvency and Bankruptcy Code.

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Issues Involved:
1. Ownership of materials supplied to the Corporate Debtor.
2. Authority of the Resolution Professional to release materials.
3. Jurisdiction of the Adjudicating Authority to decide claims and counterclaims during the moratorium period.

Detailed Analysis:

1. Ownership of Materials Supplied to the Corporate Debtor:
The main contention from 'M/s Dynepro Pvt. Ltd.' was that the materials sent to the Corporate Debtor, 'M/s Cethar Ltd.', for job work belonged to them and not to the Corporate Debtor. They argued that these materials were sent for specific job work and thus should not be considered as assets of the Corporate Debtor. They provided evidence including an Inward Inspection Certificate dated 5th May 2017, which listed the vendor's name as 'M/s DPL/G.B. Engineering', to establish ownership. The Resolution Professional, however, contended that the materials were part of the Corporate Debtor's inventory and thus belonged to the Corporate Debtor.

2. Authority of the Resolution Professional to Release Materials:
The Resolution Professional, during the Corporate Insolvency Resolution Process (CIRP), claimed that the materials in question were part of the Corporate Debtor's assets. The Resolution Professional's duty, as per Section 18 of the Insolvency and Bankruptcy Code (IBC), includes taking control and custody of any asset over which the Corporate Debtor has ownership rights. The Resolution Professional determined that the materials did not belong to 'M/s Dynepro Pvt. Ltd.' or 'M/s IU International Holdings PTE Ltd.', but to the Corporate Debtor. The Adjudicating Authority supported this view and rejected the claims for the release of materials during the resolution process.

3. Jurisdiction of the Adjudicating Authority to Decide Claims and Counterclaims:
The judgment emphasized that the Corporate Insolvency Resolution Process (CIRP) is not a forum for deciding money claims or disputes over material ownership. As per Section 60(5) of the IBC, the National Company Law Tribunal (NCLT) can entertain applications or proceedings by or against the Corporate Debtor, but it cannot decide inter-se claims regarding ownership of materials during the moratorium period. The Adjudicating Authority correctly refrained from making a decision on the claims and counterclaims regarding material ownership, as such disputes should be resolved post-moratorium through appropriate legal channels. The judgment clarified that any party claiming ownership of the materials could file a suit after the moratorium period, and the moratorium period would be excluded from the limitation period for such suits.

Conclusion:
The appeals were dismissed, upholding the Resolution Professional's determination that the materials belonged to the Corporate Debtor and affirming that the Adjudicating Authority had no jurisdiction to decide the ownership disputes during the moratorium period. The parties were advised to seek resolution of their claims through appropriate legal forums after the completion of the moratorium period. The judgment emphasized the limitations of the Adjudicating Authority's powers during the CIRP and reinforced the procedural framework established under the IBC.

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