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TMI Blog2023 (1) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... so to take control and custody of assets that may or may not be in possession of the corporate debtor. For carrying out the duties entrusted to the IRP under Section 18 of the Code and those entrusted on RP under Section 25, the IRP/RP can very well take recourse to Section 60. For effectuating the duties entrusted on the IRP under Section 18 recourse to adjudicating Authority by filing an Application under Section 60(5) is fully permissible. In the present case, we are considering the case where there is no dispute that assets in question is owned by the Corporate Debtor hence by virtue of Section 18(1)(f), Resolution Professional can take steps for taking possession of the assets. To resist the case taken by the RP, Appellant contends that under Section 60(5), no Application can be entertained for eviction of the Appellant and the only remedy available to the RP is to take proceedings under MP Accommodation Control Act, 1961. It is further relevant to notice that present is a case where renewal lease dated 17.09.2021 was executed by the RP himself for a period of 5 months till 31st December, 2021. The present is not a case where lease in favour of the Appellant is subsisting. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indore was included in the assets of the Corporate Debtor. The premise that is ground floor of the building was let out to the Appellant by the Corporate Debtor by an unregistered lease deed on 01.11.2018 for a period of 11 months on a rent of Rs. 50,000/- per month. The Appellant was in possession of the premises prior to the initiation of CIRP as the lessee. Form-G was issued on 05.06.2021 in response to which two Resolution Plans were submitted including the Appellant as well as the Resolution Plan of Respondent No. 2. ii. In 10th CoC meeting held on 11.09.2021, CoC resolved to renew the lease in relation to the premises in question till December, 2021. A fresh lease deed dated 17.09.2021 was executed by Resolution Professional on behalf of the Corporate Debtor till 31st December, 2021 in favour of the Appellant. iii. On 02.10.2021, Form-G once again was issued in response to which five Resolution Plans were submitted including the Resolution Plan by the Appellant as well as by the Respondent No. 2. iv. 16th CoC meeting held on 06.12.2021-08.12.2021, CoC resolved to send a Legal Notice to the Appellant for vacating the premises. In pursuance of 16th CoC meeting, a Lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the premises. The Application was listed before the Adjudicating Authority, it was pleaded by the Appellant that the Resolution Professional has earlier filed a suit for eviction and arrears of the rent which was withdrawn on 05.09.2022 hence it is open for the Resolution Professional to file suit to take possession from the Appellant. It is submitted that under MP Accommodation Control Act, 1961 for eviction of the tenant, proceedings has to be drawn before the appropriate forum and the Adjudicating Authority had no jurisdiction to entertain the Application filed under Section 60(5) of the Code. After hearing the parties, the Adjudicating Authority has allowed the Application. In paragraph 5 of the Judgment, following has been held: "5. We have heard the learned counsels appearing for each of the parties and perused the documents available on record. It is noted that before the initiation of CIRP against the Corporate Debtor, the corporate debtor and respondent no. 1 entered into an agreement of rent dated 01.09.2020 for 11 months. After admission of the corporate debtor into CIRP, the COC in its 10th meeting dated 11.09.2021 decided to renew the agreement of rent for further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel appearing for the Respondent refuting the submissions of Learned Counsel for the Appellant submits that the premises is owned by the Corporate Debtor and lease of the Appellant which was renewed by the resolution of the CoC was only till 31st December, 2021. The period of lease having come to an end on 31st December, 2021, the Appellant is not entitled to continue in the premises. The Adjudicating Authority has every jurisdiction to issue direction to the Appellant to vacate from the premises. It is submitted that in Reply dated 29.12.2021 to Legal Notice issued by RP to the Appellant to vacate from premises, the Appellant has offered to vacate the premises within 10 days from the approval of the Resolution Plan. Resolution Plan having been approved on 20th August, 2022, Appellant ought to have vacated according to his own offer given by the Appellant. It is further submitted that Adjudicating Authority had ample jurisdiction in the facts of the present case to entertain the application filed by the RP and the Order passed by the Adjudicating Authority is well within its jurisdiction. The Resolution Plan having been approved and to implement the Resolution Plan, premises has t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the following effect: "2. Period of Agreement: this agreement made on 17.09.2021 to give effect from 01.08.2021, the period of Agreement is 5 months i.e. from 01.08.2021 till 31.12.2021. ….. 11. Vacating Property: That the property owner/court officer is Second party whenever asks first party to vacate premises the First Party shall vacate the property in the same condition in case of any kind of damage, the said damages shall will be compensated to the Second party immediately hence will be borne by First Party. …. 18. Vacation of premises: If Second Party intends the First Party to vacate the said place, Second party will have to give a notice of 15 days in writing in advance and if the First Party intends to vacate the said place, then the first party will also given second party a similar written notice 15 days in advance." 11. The lease Agreement was not renewed after 31st December, 2021. CoC in its 16th Meeting held on 06-08.12.2021 resolved to issue legal notice to the Appellant for vacation of the premises in pursuance of the decision of the CoC, legal notice was issued by RP dated 21.12.2021 asking the Appellant to vacate the premises wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r; (iii) tangible assets, whether movable or immovable; (iv) intangible assets including intellectual property; (v) securities including shares held in any subsidiary of the coporate debtor, financial instruments, insurance policies; (vi) assets subject to the determination of ownership by a court or authority;" 13. The above provision empowers the IRP to take control and custody of any asset over which the corporate debtor has ownership rights. When we look into the Section 18(1)(f)(ii), the duty is also to take control and custody of assets that may or may not be in possession of the corporate debtor. For carrying out the duties entrusted to the IRP under Section 18 of the Code and those entrusted on RP under Section 25, the IRP/RP can very well take recourse to Section 60. Section 60(5) of the Code is as follows: "60(5). Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of- (a) any application or proceeding by or against the corporate debtor or corporate person; (b) any claim made by or against the corporate debtor or corporate pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed to be valid upto 31st March, 2020 in terms of the provisions of Section 8(a)(vi) of MMDR Act, 1997. State of Karnataka had during the pendency of the writ petition passed an order on 26.09.2018 rejecting the proposal for deemed extension. The writ petition was withdrawn by the RP however instead of filing writ petition, he had filed an application before the NCLT, Chennai praying for setting aside the order of the government. NCLT Chennai after some litigation again allowed the Application and set aside the order of the Karnataka State against which writ petition was filed by the Government of Karnataka where an Interim Order was passed staying the order of the NCLT. Against the interim order of High Court on 12.12.2019 Appeals were filed before the Hon'ble Supreme Court which came to be dismissed. In the above background, the Hon'ble Supreme Court had occasion to consider the jurisdiction of the Adjudicating Authority. Paragraph 40-42 of the Judgment is as follows: "40. If NCLT has been conferred with jurisdiction to decide all types of claims to property, of the corporate debtor, Section 18(f)(vi) would not have made the task of the interim resolution professional in taki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Resolution Professional in this case appears to have understood this legal position correctly, in the initial stages. This is why when the Government of Karnataka did not grant the benefit of deemed extension, even after the expiry of the lease on 25.05.2018, the Resolution Professional moved the High Court by way of a writ petition in WP No. 23075 of 2018. The prayer made in WP No. 23075 of 2018 was for a declaration that the mining lease should be deemed to be valid upto 31.03.2020. If NCLT was omnipotent, the Resolution Professional would have moved the NCLT itself for such a declaration. But he did not, as he understood the legal position correctly." 17. The above was a case where challenge was to the Order of the State Government rejecting the proposal for deemed extension. Challenge to the said order could not have been made before the Adjudicating Authority since it was the matter of judicial review of action of the State Government. It is also relevant to notice one important distinction of the present case from the case of "Embassy Property Pvt. Ltd." (supra). The corporate debtor was only a lessee whereas in the present case, the lessee is the Appellant and the corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Resolution Plan does or does not violate the relevant provisions of Law. 65. In reality, ascribing conditions in the 'Resolution Plan' by the Appellant/Resolution Applicant is an unacceptable one, in the considered opinion of this Tribunal. Therefore, the Adjudicating Authority in the impugned order came to the right conclusion that the plan of the Resolution Applicant/Appellant was in negation of Law. 66. Insofar as, the eviction of 2nd Respondent is concerned, the Adjudicating Authority is not empowered to pass an order of eviction and it is for an 'Aggrieved party' to move the appropriate forum for redressal of its grievances in accordance with Law. In short, the Committee of Creditors had approved the Resolution Plan in utter disregard regard to the ingredient of Section 30(2)(e) of the I&B Code and as hence the same was rejected by the Adjudicating Authority. Moreover, the Adjudicating Authority had appointed a 'Liquidator' other than the 'Existing Resolution Professional'." 19. The present is not a case where lease in favour of the Appellant is subsisting. The lease has come to an end on 31st December, 2021. Further the lease ren ..... X X X X Extracts X X X X X X X X Extracts X X X X
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