2024 (3) TMI 190 - AT - Insolvency and Bankruptcy

Direction to handover vacant and peaceful possession of the premises licensed to the Appellant by the Corporate Debtor within 15 days - impugned order has been challenged on the ground that the issue of eviction vests with the Learned Court of Small Causes under Section 41 of the Presidency Small Causes Courts Act, 1882 - HELD THAT - The issue of passing an eviction order qua immovable properties forming part of assets of Corporate Debtor, despite injunctions, have been discussed in various judgements. In M/S. JHANVI RAJPAL AUTOMOTIVE PVT. LTD. VERSUS VERSUS R.P. OF RAJPAL ABHIKARAN PVT. LTD., AGARWAL REAL CITY PVT. LTD. 2023 (1) TMI 301 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI , this Hon ble Tribunal has taken a view in case of M.P. Accommodation Control Act, 1961 that where the Corporate Debtor has ownership right over the premises, the premises can be taken in control by IRP/.RP. This Hon ble Tribunal was of the view that the suit is not contemplated in the statutory scheme contained in the IBC. The order of this Hon ble Tribunal was challenged before Hon ble Supreme Court and the petition was dismissed. The argument that despite five attempts Respondent has been unable to carry out auction sale is also not convincing as it may be due to appellant being in possession, as no intending purchaser may purchase premises in an auction, which is in possession of someone else and may land such intending purchaser(s) in litigation. Even the subsisting status quo as was issued by the Learned Court of Small Causes, only restrained the Liquidator from dispossessing the appellant without following due process of law, but admittedly the Respondent had invoked the jurisdiction of NCLT, per Section 60(5) of the Code, hence this argument of appellant too lacks merit. There could be no challenge to the powers of the NCLT to pass an eviction order in the factual matrix - Appeal dismissed.

Summary

Issues involved:
The appeal challenges an order directing the appellant to hand over possession of licensed premises by the Corporate Debtor within 15 days. The issues include jurisdiction of National Company Law Tribunal (NCLT) versus Small Causes Court, applicability of previous judgments, failure to consider auction attempts, subsisting status quo order, and compliance with liquidation proceedings.

Jurisdictional Challenge:
The appellant argues that eviction falls under Small Causes Court jurisdiction, citing the Presidency Small Causes Courts Act, 1882. They contend that NCLT should not usurp other courts' jurisdiction, referencing Supreme Court cautions. However, NCLT asserts its jurisdiction under Section 60(5) of the IBC, emphasizing its power to decide matters related to insolvency proceedings.

Applicability of Previous Judgments:
The appellant disputes the relevance of a previous judgment, claiming factual differences. NCLT relies on the Adinath Jewellery Exports case to assert its authority to order eviction despite civil court injunctions. The tribunal emphasizes the necessity to put the liquidator in possession of the premises for the benefit of the liquidation estate.

Failure to Consider Auction Attempts:
The appellant highlights unsuccessful auction attempts due to their intention to bid during liquidation. They argue that eviction would deprive the estate of benefits and cause financial loss. NCLT dismisses this argument, stating that possession by the appellant could deter potential buyers and that the subsisting status quo order does not prevent NCLT's jurisdiction.

Subsisting Status Quo Order and Compliance:
The appellant mentions a status quo order from the Small Causes Court but fails to disclose it to NCLT. NCLT notes that the civil suit filed after liquidation proceedings are barred without tribunal approval. The tribunal affirms its authority to issue eviction orders in line with insolvency resolution and liquidation proceedings.

Conclusion:
After considering relevant legal provisions and precedents, NCLT dismisses the appeal, finding it lacking merit. The tribunal upholds its jurisdiction to order eviction in the context of insolvency and liquidation proceedings, emphasizing the need to protect the interests of the liquidation estate.