The Supreme Court in the matter of Victory Iron Works Ltd. v Jitendra Lohia & Anr., has held that a Resolution Professional (“RP”) is entitled to take control of the rights of a corporate debtor in assets which are licensed to third parties. Such an action of the RP will come within the ambit of Section 25 of the Insolvency and Bankruptcy Code 2016 (“IBC”).

The Apex Court observed that the assets owned by a third-party, but in the possession of the Corporate Debtor held under contractual arrangements, are excluded from the definition of “assets” in Section 18 of IBC, however, the said exclusion does not extend to Section 25 of IBC. Therefore, the Explanation to Section 18 is inapplicable to Section 25 of IBC.