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TMI Blog2023 (7) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... unal, Kolkata Bench, Kolkata (hereinafter referred to as 'Adjudicating Authority'). For better appreciation it is appropriate to reproduce the impugned order:- "1. This Interlocutory Application being IA (IB) No. 107/KB/2021 has been filed by Mr.Niraj Agrawal, Resolution Professional/Applicant under section 45 read with section 49 of the Insolvency and Bankruptcy Code, 2016 along with Rule 11 of the National Company Law Tribunal Rules, 2016 for the following reliefs:- a. That this Adjudicating Authority be pleased to allow the present application; b. An order be passed declaring the so called agreement dated 26.07.2019 between the Corporate Debtor and T-RMC Private Limited as void and reverse the effect of such transaction in accordance with the provisions of the Code; c. An order be passed directing Respondent No. 1 (T- RMC Private Limited) to immediately vacate the said land (parcel of land ad measuring 2.209 acresin RS Dag No. 3203, 3205, 3206, and 3208 lying and situated at Narayanpur, Mouza and P.O. R-Gopalpur, P.S. Rajarhat, District-24- 3 Parganas (North), West Bengal out of which 1.90 acres is occupied by Respondent No.1) transferred as part of the transaction and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the CIRP of the Corporate Debtor; d. An order be passed directing and/restricting to remove any material or assets which is kept at the said property of the Corporate Debtor; 3. Both these applications are being disposed of by way of this common order. 4. The underlying company petition in CP (IB) No.438/KB/2018 was filed by Vijaya Bank against Castal Extrusion Private Limited, the Corporate Debtor, undersection 7 of the Insolvency and Bankruptcy Code 2016 ("the Code" or "IBC") which was admitted vide order dated 18.03.2020 in CP (IB) No. 438/KB/2018. 5. Initially, the Applicant/RP (Reg. No. IBBI/IPA-001/IP-P00130/2017-18/10272) was appointed as the Interim Resolution Professional. He was later confirmed as the Resolution Professional of the Corporate Debtor at the first meeting of the Committee of Creditors (CoC) on 18.08.2020, adjourned and concluded on 19.08.2020. 6. The IRP made public announcements on 20.03.2020 in Business Standard(English)and Ekdin (Bengali) newspapers regarding initiation of CIRP and called for proof of claims from the financial and operational creditors, workers and employees of the Company in the specified forms till 01.04.2020. 7. The RP has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2014 on identical terms, which expired on 26.07.2019. (d) The T-RMC claimed to be in possession of the said area of the subject premises since 27.07.2014. It is pertinent to note that both the above agreements were envisaged to be determinable prior to expiry of the terms thereof. (e) It is evident from the claim filed by Vijaya Bank in Form C that the principal borrower TCL's account with Vijaya Bank was declared as "Non Performing Asset"("NPA") in the first quarter of 2014, and subsequently, a notice under Section 13(2)of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter "SARFAESI Act") was issued by the bank on 10.03.2014 for enforcement of the security interest held over the subject land. (f) The purported tenancy was created in favour of T-RMC on 27.07.2014, i.e. after receipt of notice under Section 13 (2) of SARFAESI Act, and 4 days prior to receipt of notice dated 01.08.2014 under Section 13 (4) of SARFAESI Act, and as such, in patent derogation & contravention of the bar under Section13(13) of the SARFAESI Act. No NOC was sought from the FC prior to creation of the lease over the subject land, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has drawn our attention to the following relating to Shareholding pattern: Shareholding of T-RMC in FY 2014-15 at page 43 of the Application states that Harshvardhan Tantia held 50% shares of and in T-RMC at the relevant date. Shareholding of CD in FY 2014-15 at page 107, Application: Harshvardhan Tantia personally held 6.22% shares of and in the CD at the relevant date at the time of execution of the 2014 Agreement. Details of appointment and resignation of Harshvardhan Tantia from T-RMC (Form No. DIR-11) at pages 105-106: Harshvardhan Tantia was the director of T-RMC since 17.07.2014 to 14.03.2016. (l) The said tenancy arrangement was subsisting, and being acted upon, as on 18.03.2018, i.e. two years preceding the date of insolvency commencement. (m) Accordingly, the arrangement pursuant to the 2014 Agreement was continuing within 2 years preceding the Insolvency Commencement Date, 18.03.2020, and as such, falls within the purview of Sections 46 (1) (ii) of IBC. (n) The valuation report submitted by the RP shows that the fair monthly rent should have been Rs.4.85 lakh instead of Rs.55,000/- and as such there was a shortfall of Rs.4.30 lakh per month. 9. The RP has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is considered to be a "tenant at sufferance" akin to a trespasser who has no right to possession of the property.(Bajrang Shyamsunder Agarwal v. Central Bank of India (supra.), @pr.20[quoting Harshad Govardhan Sondagar v. International Asset ReconstructionCo. Ltd., (2014) 6 SCC 1 @ pr. 36.]; confirmed in Hemraj Ratnakar Salian v. HDFC Bank Ltd. And Ors., 2021 SCC OnLine SC 611 @ prs. 12-13). (f) The look back period stipulated under Section 46(2) of IBC does not apply for impugning a transaction under Section 49 of IBC as held by the Hon'ble Apex Court in Aditya Kumar Tibrewal v. Om Prakash Pandey, 2022 SCCOnLine NCLAT 142 @ pr. 12 (iv)-(vii), p. 12-14. (g) The purported undervalued lease created in favour of T-RMC constitutes a transaction for "transfer of one or more assets of the corporate debtor attracts the provision of Section 45 (2) of IBC. (h) The impugned lease arrangement was created at a gross undervalue considering the value of the land and the expected rate of return. (i) The fair value of annual rent, arrived at on the basis of rate of return on the current bank rate on G-Sec of 6.86% is found to be Rs. 4.85 Lakhs/Month, thereby leaving a shortfall of Rs. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er entities, if there be any, is directed to remove its establishment along with all its employees, staffs, officers, workmen engaged by them including all its machineries from the subject land/ premises of CEPL within 30 days from the date of approval of the Resolution Plan and handover vacant peaceful possession of the land/premises to the Resolution Applicant. 12. It is further directed that the Resolution Applicant shall not be in any manner liable to take any responsibility and/or liability in respect of the said T-RMC including its suppliers / contractors / vendors / employees / workers / staffs or any other entities whatsoever. 13. It is further directed that in the event the said T-RMC fails and/or neglects to remove its entire set-up along with all officers, employees, staffs and workmen engaged by them including all its machineries from the subject land/premises of CEPL as stated above within the stipulated period, the concerned District Administration, Police Authorities, Local Authorities and all other Statutory Authorities to provide full co-operation and assistance as may be required and sought for by the Resolution Applicant. 14. Though the Valuation Report sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued on demand to the concerned parties, upon due compliance." 2. The appellant has pleaded that it was a tenant over an area of 1.90 acres of land on the strength of lease agreement for five years @ monthly rental of Rs. 55000/-. The appellant has claimed that it was engaged in business of manufacturing and supply of ready mix concrete and employ more than 75 workers in the plant. Initially on 27.7.2014 the appellant entered into a rental lease agreement with Corporate Debtor. The appellant continued as tenant and even before expiry of five years of the lease agreement, subsequent lease agreement was executed on 26.07.2019 for further period of five years. However, subsequently on the basis of application filed under Section 7 of the IB Code by one Vijaya Bank in CP(IB) No.438/KB/2018 the Corporate Insolvency Resolution Process (CIR) was initiated with effect from 18th March, 2020 against Corporate Debtor who was land owner of the appellant. It is the case of the appellant that even after commencement of CIRP the appellant was regularly paying rent. However, on 8th October, 2020 a notice was issued by the Resolution Professional of Castal Extrusion Pvt Ltd (Corporate Debtor) cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , learned counsel for the appellant at the very outset has argued that the impugned order passed by learned Adjudicating Authority on a petition relating to under valued transaction and another on eviction matter are not enable in the eye of law. He submits that so far as under valued transaction is concerned there is nothing on record to suggest as to how the rent was treated as under valued. He by way of referring to Transaction Audit Report which starts from Page 450 Volume 2 of Memorandum of Appeal, submits that without any cogent reason the auditor has disclosed as if in the premises in question applicable monthly rental was Rs.4,85,000/-. No reason has been assigned for coming to the conclusion of the higher rent. In sum and substance it has been argued that once the appellant had entered into lease rent agreement with Corporate Debtor/landlord and agreed to pay monthly rental as Rs.55000/- the appellant continued as tenant of the Corporate Debtor and such tenancy was not required to be interfered with by the Adjudicating Authority. He emphasised that for getting the appellant evicted from the premises in question the proper course for the RP was to approach the Court of Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red into after the account of the Corporate Debtor was declared as NPA. Even though application under Section 7 of the IBC was pending against the Corporate Debtor, second lease agreement was executed in between the appellant and Corporate Debtor on 26.07.2019 for further period of five years. Both the lease agreement though were for five years were only notarised not registered. He further questioned that it is peculiar thing that in the month of July, 2014 when first lease agreement was entered the monthly rent was fixed as Rs.55000/- and that rent continued for five years even before completion of five years. On 26.07.2019, second lease agreement was entered for further five years, however, monthly rent was fixed at the same rent i.e. Rs.55000/-. According to Mr. Nagesh, learned senior counsel since prima facie both the lease agreements appear to be prepared fraudulently for unlawful gain to the appellant as well as corporate debtor and causing unlawful loss to the financial creditor, the appellant may not derive any right to further continue with the possession of the land in question and learned Adjudicating Authority has rightly passed the impugned order. He also submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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