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TMI Blog2020 (5) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... of India who are having First charge on the property is mala fide and is invalid. It is also clear that the Union Bank of India, after going through all records and title report of the property, have financed the Corporate Debtor and, therefore, the property which was acquired in 2004 has not been acquired by the Corporate Debtor fraudulently. The attachment of the assets of the Corporate Debtor by the Economic Offences Wing will hamper the claim of the Creditors of the Corporate Debtor and therefore to protect the interest of the Bank and the present Creditors, this Bench directs the Economic Offences Wing and other Government Departments to release the property and assets of the Corporate Debtor currently attached with them so that the Corporate Insolvency Resolution Process of the Corporate Debtor could be conducted in the substantial public interest. Thus, in terms of Section 238 of IBC and considering the overriding effect of IBC u/s 238 of the Code this Bench is of the considered view that the attachment order of the Economic Offences Wing is a nullity and non-est in law and therefore will not have any binding force. The Resolution Professional who is the Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lonavala. The resort situated at Lonavala has been mortgaged to Union Bank of India (UBI) in 2015 for availing the loan from the Bank. A copy of the Mortgage Deed has been attached by the IRP/ RP in his Application. After mortgaging the property to UBI, the Directors of the Corporate Debtor without taking any consent from UBI, provided this property on lease on a long-term basis at a very small amount to Marathe Hospitality vide lease deed dated 18.05.2016. 3.1.2. The IRP/ RP, through his Associate, had tried to contact the Directors of the Corporate Debtor at the registered office address and the residence address. However, it was closed and even after all possible enquiries no contact could be established. The Applicant visited the Partners of Marathe Hospitality, Mr. Anup Naik, who as per the IRP/ RP, is the Tax Advisor to the Corporate Debtor. Mr. Naik informed the Applicant that he is not in possession of any paper/ document as the registered office of the Corporate Debtor is under attachment by Government authorities. 3.1.3. Subsequently based on information, the CoC and the IRP/ RP came to know that one of the Directors of the Corporate Debtor i.e. Mr. Vinay Phadnis i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Marathe Hospitality (R5). 4.1. The Respondent mentions that the Corporate Debtor and R5 had entered into a Registered Lease Agreement on 18.05.2016 at a monthly lease rental of ₹ 25,000 for a period of 10 years with a right to renew the lease for further period of time. 4.2. The Respondent mentions that it was the duty of the Corporate Debtor before giving the said property on lease to seek prior permission of the UBI. Therefore, the Respondent submits that for the wrong doings of the Corporate Debtor, the rights and privileges of Respondents should not be prejudiced. The Respondent also mentions that since May 2017 UBI is in knowledge of existence of the said Agreement. However, the Respondent also mentions that in May 2017 the Respondent had learnt that UBI is taking action against the Corporate Debtor under the provisions of SARFAESI. 4.3. The Respondent mentions that as per Section 46 of the Code, the relevant time for avoidance of under value transaction is one year prior to commencement of the CIRP of the Corporate Debtor. Therefore, as per the Respondent, since the said Agreement was entered into on 18.05.2016, therefore, is beyond one year from the CIRP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Corporate Debtor, therefore, associated with the Corporate Debtor. This is pointer to the fact that it is a case of preferential transaction. That it is also a fraudulent transaction is clear from the fact that after 10 years of lease rental @ ₹ 25,000 per month with no annual increment in rent provision. It is only the prerogative of the Lessee for the extension of the lease agreement. What is to be noted is that the Lessor, as per the agreement, does not have any say in the matter and it cannot object to any extension after 10 years but has to accept the extension in case it is so proposed by the Lessor, i.e. Marathe Hospitality. 5.1.3. As per Section 65-A(2)(c) of the Transfer of Property Act, 1882 as amended from time to time, no lease shall contain a covenant for 'renewal'. In the lease agreement of the Corporate Debtor, in a related party transaction with Marathe Hospitality, the total rent for a huge Commercial property measuring about 2310 sq. mtr. along with two-storeyed building structure, is only ₹ 25,000 per month with no increase in rental for a period of 10 years. In addition, as per the Lease Agreement, there is a provision for further ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect by virtue of such law . The Hon'ble Supreme Court in the case of Solidaire India Ltd. v. Fairgrowth Financial Services Pvt. Ltd. has held that where two statutes contain non-obstante clause, latest statute would prevail. Therefore, in terms of Section 238 of IBC and considering the overriding effect of IBC u/s 238 of the Code this Bench is of the considered view that the attachment order of the Economic Offences Wing is a nullity and non-est in law and therefore will not have any binding force. 6. In view of the above, this Bench directs the following:- (a) The Resolution Professional who is the Applicant in this Miscellaneous Application to take possession of fixed assets and all documents available in the office and other premises of the Corporate Debtor. (b) The Jailor of Nasik Jail to allow meetings of the Resolution Professional and his associates with the ex-director Mr. Vinay Phadnis for obtaining necessary information about the Corporate Debtor Company and its activities. (c) The Economic Offences Wing to release the attachment carried out on the property of the Corporate Debtor, i.e. Phadnis Resorts Spa India Limited. (d) The lease agreement bet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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