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2021 (12) TMI 245 - AT - Insolvency and BankruptcyValidity of approved resolution plan - approved resolution plan challenged on the ground that it affects the Appellant s rights regarding termination of the existing Leave and Licence Agreement dated 16.6.2017 with Respondent No. 1 and refund of the security deposit upon delivery of the premises and on the ground that the order has been passed without giving any notice or opportunity of hearing to the Appellant - HELD THAT - It is clear that there is a provision in the Licence Agreement for unilateral termination of the agreement without assignment of any reason by furnishing six months notice. Clause 12(c) makes the licencee liable for paying all outstanding payments which include rent, water charges and electricity charges calculated on the date of termination or the date of handover of the licensed premises. It is also noticed that a formal notice was given vide e-mail dated 27.4.2021 by the Successful Resolution Applicant SIFY Technologies Limited to he Appellant (attached at pp. 258-261 of Appeal paperbook, Vol. II), even if we consider this to be a formal notice under the leave and licence agreement and Successful Resolution Applicant to be responsible as a signing authority in the said agreement, more than 7 months have passed since the sending of this notice. Even then, as per clause 12 (b) of the licence agreement, unilateral termination of the agreement has been enforced by the Successful Resolution Applicant. It is also worth noting that the Appellant continued to enjoy the said premises after the approval of the Resolution Plan by the Adjudicating Authority and also continued to pay the licence fee as well as water and electricity charges. He was well aware of the status of the said premises as contained in the successful resolution plan and was asked to vacate the premises vide e-mail of Sify Technologies dated 30.11.2020. He has enjoyed the premises for over one year now from the date he was sent mail on 30.11.2020. Therefore, it would not be correct for the appellant to now say at this time and stage that his rights under the Licence Agreement should be protected, more so as clause 12(b) of the Licence Agreement does provide the possibility of unilateral termination of the Licence Agreement after the period of six months from giving notice - In the present case, even though the Licence Agreement s termination was included in the Resolution Plan, we find that the Successful Resolution Applicant followed the Licence Agreement as per clause 12 (a) in terminating the agreement. Thus he has not violated the rights of the Appellant in the Licence Agreement. The Appellant may be given time to shift its operation to another premises within two months from the date of this order. The Appellant will be liable to pay the licence fee, water and electricity charges to the Successful Resolution Applicant, till the time it vacates the said premises and simultaneously the Successful Resolution Applicant shall return the security deposit amount in accordance with the lease agreement to the Appellant - Appeal disposed off.
Issues Involved:
1. Approval of the Resolution Plan. 2. Termination of the Leave and Licence Agreement. 3. Alleged contravention of Section 30(2)(e) of the Insolvency and Bankruptcy Code (IBC). 4. Alleged contravention of Section 62 of the Indian Contract Act, 1872. 5. Delay or laches in approaching the NCLT. 6. Commercial wisdom of the Committee of Creditors (CoC). 7. Provisions of the Indian Easements Act, 1882. 8. Implementation of the Resolution Plan. Issue-wise Detailed Analysis: 1. Approval of the Resolution Plan: The Adjudicating Authority approved the Resolution Plan submitted by Sify Technologies Limited (Respondent No. 3) in the Corporate Insolvency Resolution Process (CIRP) of Respondent No. 1-Corporate Debtor. The Appellant challenged this approval, arguing that the order affected its rights under the Leave and Licence Agreement without notice or opportunity of hearing. 2. Termination of the Leave and Licence Agreement: The Appellant held a Leave and Licence Agreement with Respondent No. 1 for a period of five years, which included a lock-in period. The Appellant argued that there was no material breach of contract to justify termination. The Respondent No. 3, after taking over management, asked the Appellant to vacate the premises, which led to the appeal. 3. Alleged Contravention of Section 30(2)(e) of the IBC: The Appellant claimed that the Impugned Order allowed unilateral termination of the Licence Agreement, contravening Section 30(2)(e) of the IBC, which requires the Resolution Plan to comply with the law. The Appellant argued that the RP and the Adjudicating Authority failed in their duty to ensure compliance. 4. Alleged Contravention of Section 62 of the Indian Contract Act, 1872: The Appellant argued that the Impugned Order contravened Section 62 of the Indian Contract Act, 1872, which states that novation, rescission, or alteration of a contract requires the permission of all parties and cannot be done unilaterally. 5. Delay or Laches in Approaching the NCLT: The Appellant denied any delay or laches, arguing that the cause of action arose only after the termination notice dated 26.4.2021. The Respondent No. 2 argued that the Appellant was aware of the Resolution Plan's approval and should have approached the NCLT earlier. 6. Commercial Wisdom of the Committee of Creditors (CoC): Respondent No. 2 argued that the commercial wisdom of the CoC, which approved the Resolution Plan with 70.05% votes, is not open to judicial review. The Appellant's challenge to the Resolution Plan was thus not justified. 7. Provisions of the Indian Easements Act, 1882: Respondent No. 2 referred to Sections 59, 62(a), and 62(i) of the Indian Easements Act, 1882, arguing that the guarantor's transferee is not bound by the licence agreement, and the licence is deemed revoked when the guarantor ceases to have any interest in the property. 8. Implementation of the Resolution Plan: Respondent No. 3 (Sify Technologies Ltd.) argued that it had taken over management and invested substantial capital in the premises. The termination of the Licence Agreement was necessary for implementing the Resolution Plan, which was approved by the CoC and the Adjudicating Authority. Judgment: The Tribunal found that the unilateral termination of the Licence Agreement by the Successful Resolution Applicant (Sify Technologies Ltd.) was in accordance with clause 12(a) of the agreement, which allows termination with six months' notice. The Appellant was aware of the Resolution Plan and continued to occupy the premises while paying the licence fee. The appeal was disposed of with directions for the Appellant to vacate the premises within two months, paying the licence fee, water, and electricity charges until then. The Successful Resolution Applicant was directed to return the security deposit as per the lease agreement. There was no order as to costs.
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