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TMI Blog2024 (8) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... to be noticed for deciding the Appeal are: (i) The Appellant (hereinafter referred to as the "Corporate Debtor"), holding Company of Respondent No.2 - Wind World (India) Infrastructure Pvt. Ltd. Wind World (India) Infrastructure Pvt. Ltd., which was earlier known as (Enercon India Infrastructure Pvt. Ltd.) proposed to construct and operate power switchyard ("the Facility) required for pooling of power to be generated by Enercon India Limited ("EIL") existing and/or proposed wind energy projects for the purpose of maintenance and operating power switch yards, the Facility Agreement was entered dated 28.12.2007 between the Corporate Debtor and Respondent No.2. The Corporate Debtor subject to terms and conditions of the Agreement was authorised to use, operate and maintain the facility. (ii) Respondent No.2, a subsidiary of the Corporate Debtor constructed the substations and switch yards, on which the Corporate Debtor was allowed to operate. The Facility Agreement was modified from time-to-time upto the year 2016. (iii) Respondent No.2 entered into a Loan Agreement with Respondent No.1. Under the first Loan Agreement, Respondent No.1 sanctioned loan of Rs.90 Crores. Under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peration and maintenance, is in violation of Section 14 (1) (d) of the IBC. The Corporate Debtor is in occupation of Facility. It is submitted that Respondent No.1 has right over the assets, which are its security interest, but cannot call for fresh EoI under the Facility Use Agreement, under the SARFAESI Act. It is submitted that Facility Use Agreement is subsisting and cannot be terminated during the moratorium. The Deed of Assignment entered into with Respondent No.1 and Respondent No.2 is contrary to the Facility Use Agreement. The Facility is in occupation of the Appellant and its use is essential to keep the Appellant as a going concern. The Corporate Debtor has to recover substantial amounts from Respondent No.2. 5. Shri Nakul Sachdeva, learned Counsel appearing for Respondent No.1 refuting the submission of learned Counsel for the Appellant submits that measures adopted by Respondent No.1 are not in contravention of Section 14 of the IBC. Section 14(1)(d) is not applicable in the instant case. It is submitted that Respondent No.1 is neither the owner nor lessor of the property. It is submitted that it is Respondent No.2, who is owner and in possession of substations and sw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EIL for use thereof, EIL shall operate and maintain the Facility on its own account throughout the term of this Agreement for evacuation of power in accordance with the guidelines provided by the Contractors, technical characteristics of the Facility, good industry practice and all Applicable Laws. EIL shall pay EIPL the Facility Use Charges as per the rates stated hereunder. d. Notwithstanding the handing over of Facility by EIIPL to EIL for operating, maintaining and using for generating the power, the ownership of the Facility shall remain solely with EIIPL, and except for mere right to operate, maintain and use the Facility EIL will have no right whatsoever in the Facility. e. Ensure that all such steps shall be taken as are necessary to ensure that the title to the Facility are not abrogated, seized tampered or jeopardized and the title to the Facility are fully protected in the name of EIIPL. f. Not do or omit to do any act which may result in seizure and/or confiscation of the Facility by the Central or State Government or Local Authority or any Public Officer or Authority under any law for the time being in force." 8. Clause 2.4 deals with 'Facility Use Charges', ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he power switch yards/ substations/ grids etc. The Assignment Agreement was also executed by Respondent No.2, styled as Conditional Deed of Assignment of Project Agreements. 12. The EoI dated 25.04.2022, which was issued by Respondent No.1 for appointment of operation and maintenance contractor for carrying out operation and maintenance of switchyards (substations) was challenged by RP of the Appellant before the Adjudicating Authority by filing IA No.422 of 2022. Respondent No.1 in its reply has brought on record that in the CIRP of the Corporate Debtor, the RP brought an agenda for consideration as to whether the payment of dues to be made to Respondent No.2 of facility usage charges, where a decision could not be taken for payment of usage charges and Respondent No.1, who is also Member of the CoC, objected and submitted that Respondent No.1 is entitled for receiving the payment. It is submitted that action under the SARFAESI Act was initiated by Respondent No.1 against Respondent No.2 as per the rights conferred on it by way of Loan Agreement, Hypothecation Agreement and Conditional Deed of Assignment. The Appellant filed an Application in this Appeal praying for injuncting Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashtra Housing and Area Development Authority and Anr. - (2020) 13 SCC 208. The Hon'ble Supreme Court in the aforesaid judgment in paragraphs 14, 15 and 18 has laid down following: "14. A bare reading of Section 14(1)(d) of the Code would make it clear that it does not deal with any of the assets or legal right or beneficial interest in such assets of the corporate debtor. For this reason, any reference to Sections 18 and 36, as was made by NCLT, becomes wholly unnecessary in deciding the scope of Section 14(1)(d), which stands on a separate footing. Under Section 14(1)(d) what is referred to is the "recovery of any property". The "property" in this case consists of land, admeasuring 47 ac, together with structures thereon that had to be demolished. "Recovery" would necessarily go with what was parted by the corporate debtor, and for this one has to go to the next expression contained in the said sub-section. 15. One thing is clear that "owner or lessor" qua "property" is then to be read with the expression "occupied or in the possession of". One manner of reading this clause is to state that whether recovery is sought by an owner or lessor, the property should either be occup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... number of judgments in different contexts. Thus, in Industrial Supplies (P) Ltd. v. Union of India [Industrial Supplies (P) Ltd. v. Union of India, (1980) 4 SCC 341] , this Court was faced with the following question : (SCC pp. 344-45, para 2) "2. The appeals raise a question of far-reaching importance, namely, whether a raising contractor of a coal mine is an owner within the meaning of sub-section (1) of Section 4 of the Coking Coal Mines (Nationalisation) Act, 1972 (hereinafter referred to as "the Nationalisation Act"); and if so, whether the fixed assets like machinery, plants, equipment and other properties installed or brought in by such a raising contractor vest in the Central Government. They also give rise to a subsidiary question, namely, whether subsidy receivable from the erstwhile Coal Board established under Section 4 of the Coal Mines (Conservation, Safety and Development) Act, 1952 up to the specified date, from a fund known as Conservation and Safety Fund, by such raising contractor prior to the appointed day, can be realised by the Central Government by virtue of their powers under sub - section (3) of Section 22 of the Nationalisation Act, to the exclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenancy premises. If he himself ceases to occupy and parts with possession in favour of someone else, it provides a ground for eviction. Similarly, some legislations provide it as a ground of eviction if the tenant has just ceased to occupy the tenancy premises though he may have continued to retain possession thereof. The scheme of the Haryana Act is also to insist on the tenant remaining in occupation of the premises. Consistently with what has been mutually agreed upon, the tenant is expected to make useful use of the property and subject the tenancy premises to any permissible and useful activity by actually being there. To the landlord's plea of the tenant having ceased to occupy the premises it is no answer that the tenant has a right to possess the tenancy premises and he has continued in juridical possession thereof. The Act protects the tenants from eviction and enacts specifically the grounds on the availability whereof the tenant may be directed to be evicted. It is for the landlord to make out a ground for eviction. The burden of proof lies on him. However, the onus keeps shifting. Once the landlord has been able to show that the tenancy premises were not being use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cupy" in Section 11(4)(v) instead of "possession". Occupy in certain context indicates mere physical presence, but in other context actual enjoyment. Occupation includes possession as its primary element, and also includes "enjoyment". The word "occupy" sometimes indicates legal possession in the technical sense; at other times mere physical presence. We have to examine the question whether mere "physical possession" would satisfy the word "occupy" within the meaning of Section 11(4)(v) of the Act. In our view, mere physical possession of premises would not satisfy the meaning of "occupation" under Section 11(4)(v). The word "possession" means holding of such possession, animus possidendi, which means, the intention to exclude other persons. The word "occupy" has to be given a meaning so as to hold that the tenant is actually using the premises and not mere physical presence or possession. A learned Single Judge of this Court in Padinjareyil Abbas v. Sankaran Namboodiri [Padinjareyil Abbas v. Sankaran Namboodiri, 1992 SCC OnLine Ker 316 : (1993) 1 KLT 76] took the view that the word "occupation" is used to denote the tenant's actual physical use of the building either by himsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Appellant has relied on Clause 2.1 of Facility Agreement dated 28.12.2007 to submit that Facility has been handed over to use, operate and maintain. Clause 2.1 is as follows: "2.1 Right to use the Facility Subject to and in accordance with the terms and conditions set forth in this Agreement, EIIPL hereby grants EIL and authorises EIL to use operate and maintain the Facility. For this purpose, EIIPL hereby agrees to handover the Facility to EIL." 19. There can be no dispute that Facility has been handed over to the Appellant for operation and maintenance. Further, Respondent No.2 was also obliged to provide access to representative of the Corporate Debtor for operating and maintenance, but the mere fact that the Appellant has been permitted to use the Facility for operation and maintenance, cannot lead to conclusion that the Corporate Debtor is in occupation of the Facility and there is any breach of Section 14(1)(d). Section 14(1)(d) of the IBC prohibits recovery of any property by an owner or lessor, where such property is occupied and in possession of the Corporate Debtor. The present is not a recovery of the Facility by owner or lessor, who is Respondent No.2 he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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