2019 (11) TMI 1772 - AT - Insolvency and Bankruptcy

Direction on Resolution Professional to handover the land to said landlord Amar Universal Private Limited being a third party property - whether Amar Universal Private Limited had complete right over the premises of land or has dues outstanding or not - HELD THAT - The Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, by impugned order dated 16th October, 2019 observed that the Resolution Professional may be for the said reason not have been sitting over the claim filed by the 1st Respondent Landlord. In view of the same, Miscellaneous Application filed by 1st Respondent Amar Universal Private Limited was allowed with direction to the Resolution Professional to handover the land to the 1st Respondent including the claim amount within one week with further direction to the Resolution Professional to pay a cost of Rs.1 Lakh to the 1st Respondent. As per Agreement, the Corporate Debtor was holding the vacant land for the purpose of keeping the automobiles pursuant to the license and not any Lease Agreement. There is nothing on record to substantiate existence of workshop on said land - we are not inclined to interfere with substantive part of the order. However, we are of the view that it was not the case to impose any cost on the Resolution Professional. Therefore, we are inclined to interfere with such part of the impugned order. It is made clear that the Resolution Professional who has been asked to pay the dues and hand over the possession of the land, will be paying the current rent of the period of Resolution Process, as in terms of Section 14 of the I B Code, earlier claim amount cannot be returned to any Operational Creditor or other Creditors. Therefore, the Direction at para 19 should be read as pay the claim amount as raised by the Applicant for current period after initiation of the Corporate Insolvency Resolution Process - Resolution Professional will determine the claim of the 1st Respondent and communicate the same to the 1st Respondent and may approach the 1st Respondent Amar Universal Private Limited for renegotiation and settlement of any grievance in terms of earlier agreement. Amar Universal Private Limited in such case may reach new Terms of Settlement uninfluenced by the order passed by the Adjudicating Authority or this Appellate Tribunal. The impugned order so far as it relates to imposition of cost of Rs.1 Lakh is set aside - Appeal disposed off.

Summary

Issues involved:
1. Claim by the landlord for possession of the land in the Corporate Insolvency Resolution Process.
2. Objection raised by the Resolution Professional regarding the landlord's claim.
3. Adjudicating Authority's decision to allow the landlord's claim and direct the Resolution Professional to hand over the land.
4. Dispute over the necessity of the premises for the Corporate Debtor's operations.
5. Decision regarding the imposition of costs on the Resolution Professional.
6. Clarification on payment of dues and possession of the land during the Resolution Process.

Analysis:
1. The case involved a dispute between the landlord, referred to as the 1st Respondent, and the Resolution Professional in the Corporate Insolvency Resolution Process of a company. The landlord filed a Miscellaneous Application seeking direction to reclaim the land from the Corporate Debtor, 'S. K. Wheels Pvt. Ltd.', which was a third party property under 'Amar Universal Private Limited.'

2. The Resolution Professional objected to the landlord's claim, citing that 'Amar Universal Private Limited' did not have complete rights over the land or had outstanding dues. The Adjudicating Authority noted a civil suit pending in court and the agreement stipulating the payment of tenancy/license fees by the Corporate Debtor to the landlord.

3. The Adjudicating Authority, the National Company Law Tribunal, Mumbai Bench, allowed the landlord's claim, directing the Resolution Professional to hand over the land to the landlord within a week and pay a cost of Rs.1 Lakh. The Resolution Professional argued the necessity of the premises for the Corporate Debtor's operations in the automobile industry.

4. The Appellate Tribunal declined to interfere with the order but set aside the imposition of costs on the Resolution Professional. It clarified that the Resolution Professional must pay the current rent for the period of the Resolution Process as per Section 14 of the Insolvency and Bankruptcy Code, and determine the landlord's claim for renegotiation.

5. The Tribunal modified the order, directing the Resolution Professional to communicate the claim amount to the landlord for the current period and allowing renegotiation of terms. The decision to impose a cost of Rs.1 Lakh on the Resolution Professional was set aside, concluding the appeal with these observations and directions.