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TMI Blog2022 (4) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... on is not hit by the principles of res-judicata. To meet the procedural requirement this I.A. came to be filed. Since, a status-quo order is made in I.A. No. 17/2020, at request of the Applicant the same is kept alive. Hence, this point is answered by holding that this application is maintainable. Whether the subleases under the Sublease Agreements dated 06.03.2013 and 18.03.2014 are not terminated and whether they are still in force? - HELD THAT:- When there is no dispute that part of the leased land is taken over by the Respondent, the Applicant cannot be heard to contend that the termination of lease was not affected. That part of the land which is not taken possession is allegedly retained with the Corporate Debtor due to its equipment being kept in the said land. But technically the possession stands with the Respondent since, the termination letter was acted upon and part of the land was given possession to the Respondents. Moreover the letter dated 08.11.2019 clearly specifies that the subleases were terminated. The letter was issued only with a request to clear the outstanding amounts. Hence, the subject of the letter qualifies the subleases as terminated. The request ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial and quasi-judicial and arbitration proceedings. It was held that wherever the Corporate Debtor has to exercise the rights in judicial, quasi-judicial proceedings the Resolution Professional cannot short-circuit the same and bring a claim before NCLT taking advantage of Section 60(5). It was also held that in the light of the statutory scheme as culled out from various provisions of the IBC, 2016 it is clear that wherever the Corporate Debtor has to exercise a right that falls outside the purview of IBC, 2016, especially in the realm of the public law, they cannot, through the Resolution Professional take a bypass and go before NCLT for enforcement of such a right - if the Corporate Debtor is still in possession of the property of the 3rd party his possession can be safeguarded by preventing the 3rd party from dispossessing. But if, the possession of the property is no longer with the Corporate Debtor Section 14 would not come to the rescue of the Corporate Debtor. Hence, it can be concluded that this Tribunal would have limited jurisdiction in respect of leases and if, the Corporate Debtor is in possession of the property under lease the jurisdiction of the Tribunal will extend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Respondent is an erstwhile promoter of the Corporate Debtor and also one of the shareholders and initial subscriber to Memorandum of Association and Article of Association of the Corporate Debtor. He entered into a shareholder's Agreement dated 26.11.2009 in respect of the Corporate Debtor with the other shareholders. Clause 3.3(c) of the Shareholder's Agreement contains a representation of the Respondent that it is in a position to handover the sublease lands to the Corporate Debtor for the purpose of business of Corporate Debtor/Applicant for a duration of atleast 30 years. AD approvals required for the operation and management of the business of the subleased land have been granted by the relevant authority to the Respondent and shall continue to be in force for 30 years. Clause 4.2 states that all shareholders shall actively support the activities undertaken by the Corporate Debtor. On account of the failure of the Corporate Debtor to repay outstanding dues to the Respondent, he filed a petition to initiate Corporate Insolvency Resolution Process (CIRP). Resolution Professional was appointed by the Tribunal. Since, the Resolution Professional (RP) could not revive a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into a shareholders Agreement with the other shareholders of the Corporate Debtor. In any event, it is stated that the termination of the Sublease is not valid. 3. The Respondent filed counter denying the contents of the Application and contending that the Respondent being the conservator of the port excavators, the provisions under Indian Port Act have to be considered, which is not within the jurisdiction of this Tribunal. It is stated that I.A. No. 17/2020 is already filed and a status-quo order was passed, hence second application for the same relief is not maintainable. The Respondent took over the possession of part of the lease land after termination of the lease in May, 2019 and allotted to other port users. The dues prior to the commencement of CIRP period were claimed. The Respondent has lien on the assets of the Corporate Debtor. The Tribunal directed the Corporate Debtor to clear the rental dues which is not complied with. The Respondent has given detailed statement of pending dues but the Resolution Professional (RP) failed to clear the rental dues. The Respondent has terminated the lease with effect from 23.05.2019 before the CIRP and the start of moratorium unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is filed ceased to be RP and since the role of the RP has changed into that of the Liquidator on the Corporate Debtor being taken for liquidation, this LA got to be filed with the same relief. As already observed I.A. No. 17/2020 is filed for the same reliefs that are claimed in this Application and is pending. The status-quo order was granted in I.A. No. 17/2020 by way of ad-interim order. The contention of the Respondent's Counsel is that the said order without notice cannot be sustained. However since, the main application itself is coming up for adjudication, it is not necessary to go into the validity of the said order. But however, in order to answer the contentions raised by the Respondent's Counsel, the judgments relied upon by him can be looked into which are on the aspect of issuing notice to the Respondent before making an ad-interim order. Rule 11 of the NCLT Rules gives inherent powers to this Tribunal to pass orders in the interest of justice and by invoking the said powers under Rule 11 of NCLT Rules, this Tribunal has made the order of Status-quo in I.A. No. 17/2020 without giving notice to the Respondent. The judgment relied upon by the Respondent's C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell all their equipment, goods etc., including the floating dry dock, to recover the amounts due from the Applicant. It is requested to pay the overdue amounts immediately to avoid further steps by the Respondent. It also shows that it is mentioned that they hope that the Corporate Debtor also informs the notice of termination of the leases to their lender. It also shows that the copy of the letter dated 08.11.2019 is also mailed to them separately. The contention of the Applicant's Counsel is that the lease is not terminated and is still in force, since the notice dated 08.11.2019 calls upon the Applicant to clear the dues in order to avoid further steps. According to him, the further step is meant to be the termination of the lease. But the Counsel for the Respondent submits that the further steps would mean to bring the machinery and equipment to sale in order to realize the rental dues of the subleases. The documents pertaining to the vessel which is a Floating Dry Dock (FDD) were filed by the Respondent to show that the Floating Dry Dock is a vessel and that they have a right to bring the vessel to sale and hence, the notice dated 08.11.2019 mentioned that further steps wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices Private Limited and that Arya Offshore Services Private Limited has requested for allotment of an additional land. When there is no dispute that part of the leased land is taken over by the Respondent, the Applicant cannot be heard to contend that the termination of lease was not affected. That part of the land which is not taken possession is allegedly retained with the Corporate Debtor due to its equipment being kept in the said land. But technically the possession stands with the Respondent since, the termination letter was acted upon and part of the land was given possession to the Respondents. Moreover the letter dated 08.11.2019 clearly specifies that the subleases were terminated. The letter was issued only with a request to clear the outstanding amounts. Hence, the subject of the letter qualifies the subleases as terminated. The request for clearing the outstanding amounts cannot be interpreted to mean that there is a waiver on the part of the Respondent. More so when part of the land was taken over by the Respondents. There is no dispute that the letter of termination is prior to the CIRP period and before the admission of the Application under Section 9 of IBC and be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he suit, would keep the lease alive. In this case no interest was paid on the arrears of rent. Apart from the rent being unpaid as per the agreement, even according to what is mentioned in the written submissions the dues as mentioned in the notice of the termination dated 22.02.2019, also included all other dues which are purportedly levied on the basis of unregistered MoU under the guise of infrastructure development charges and is challenged in I.A. No. 21/2021 and is accordingly sub-judice. Hence unless it is proved that the arrears of the rent is paid in accordance with the Section 114 of the Transfer of Property Act, it cannot be held that, no order can be passed relieving the petitioner against the forfeiture. The Order of this Bench dated 19.06.2021 would also show that the Bench considered that the dues pertained not only to the rent but also other dues. Hence, this point is answered by holding that the subleases in question are terminated and are not in force by the date of this application. III. Whether this Tribunal has jurisdiction to decide the issues pertaining to the subleases: A judgment of the Hon'ble Supreme Court reported in in Civil Appeal No. 9170/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IBC is also considered where under the Resolution Professional is obligated to represent and act on behalf of the Corporate Debtor with third parties and exercise the rights for the benefit of the Corporate Debtor in judicial and quasi-judicial and arbitration proceedings. It was held that wherever the Corporate Debtor has to exercise the rights in judicial, quasi-judicial proceedings the Resolution Professional cannot short-circuit the same and bring a claim before NCLT taking advantage of Section 60(5). It was also held that in the light of the statutory scheme as culled out from various provisions of the IBC, 2016 it is clear that wherever the Corporate Debtor has to exercise a right that falls outside the purview of IBC, 2016, especially in the realm of the public law, they cannot, through the Resolution Professional take a bypass and go before NCLT for enforcement of such a right. But however, the Supreme Court observed that the purpose of moratorium would have no impact upon the right of the Government to refuse the extension of lease and it is only to preserve the status-quo and not to create a new right. It also observed that even Section 14(i)(d) of IBC which prohibits, d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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