NCLT Mumbai Allows Loyal Auto Globe Liquidator To Seek Release Of MPID-Attached Properties

Holding that Loyal Auto Globe Pvt. Ltd.'s liquidation cannot effectively proceed while its properties remain under MPID attachment, the National Company Law Tribunal at Mumbai on May 15 allowed the liquidator to approach the competent Sessions Court for release of the properties.

A bench of Judicial Member Nilesh Sharma and Technical Member Charanjeet Singh Gulati said the issue of release of the attachment must be decided by the competent court because the properties form part of the corporate debtor's liquidation estate.

“Accordingly, this Tribunal is of the opinion that the issue relating to the release of the attachment placed under the MPID Notification dated 01.02.2012 on the scheduled properties, is required to be agitated before the competent court, particularly since the scheduled properties form part of the liquidation estate of the Corporate Debtor and the liquidation process cannot effectively proceed when the properties are under attachment."

The tribunal was hearing an application filed by Solvenza Advisory LLP, the liquidator of Loyal Auto Globe, seeking approval under the Insolvency and Bankruptcy Code to initiate proceedings before the Sessions Court in the MPID Special Case.

The dispute concerns four properties forming part of the company's liquidation estate. These were attached under an MPID notification dated February 1, 2012.

The liquidator argued that the attachment was wrongful because the notification was issued in proceedings concerning Dhanlaxmi Co-op Credit Society and its officials, while the attached properties belonged to Loyal Auto Globe.

It was further argued that the properties had already been mortgaged to Central Bank of India in 2008 against loans of about ₹6.96 crore. SARFAESI proceedings were initiated in 2009, before the MPID attachment.

Loyal Auto Globe was admitted into the corporate insolvency resolution process on March 12, 2019. It was ordered into liquidation on January 27, 2020.

The tribunal had earlier directed release of the seal and lock placed on the properties.

On November 24, 2025, the Bombay High Court set aside an MPID Court order dated March 4, 2025, which had permitted the sale of the properties. The High Court held that the earlier view giving overriding effect to the SARFAESI Act over the MPID Act was no longer available after the Supreme Court's ruling in National Spot Exchange Limited v. Union of India.

The High Court, however, left it open for parties to raise all contentions before the competent court, including the contention that the company was under liquidation under the Insolvency and Bankruptcy Code.

Taking note of these High Court orders, the NCLT held that the question of release of attachment must be decided by the competent court.

Since the liquidator required prior approval under Section 33(5) of the Insolvency and Bankruptcy Code to institute proceedings on behalf of the corporate debtor, the tribunal granted permission.

The application was accordingly allowed.