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TMI Blog2024 (10) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... n - In the present case, the Adjudicating Authority has correctly held that since the lease deed had been cancelled much before the commencement of the CIRP, the Corporate Debtor had lost the right to possess the subject plot before the initiation of CIRP. Since the subject plot ceased to be an asset of the Corporate Debtor with effect from 13.08.2015, the provision of moratorium in terms of Section 14 of the IBC will not get attracted in the present case. There is nothing on record to show that post cancellation of the lease deed, the Noida authority was paid any lease rent or there is any written permission or assent of the Noida authority for restoration or continuation of the said lease. Simply by having filed an application for restoration of the said plot of land, the deemed subsistence or continuation of the lease deed cannot be presumed. The lease having been cancelled on 31.08.2015 for want of deposit of necessary lease rent/charges in terms of the allotment, the lease land could not have been made a part of the resolution plan of the Corporate Debtor - Basis the wrongful obtaining of RERA registration, it cannot be rightfully claimed by the RP that the lease was subsistin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rivastava, Advocate for R-1. JUDGMENT [Per: Barun Mitra, Member (Technical)] The present appeal filled by the Appellant arises out of the dated11.01.2024(here in after referred to as Impugned Order ) Passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench, Court-II) in IA No. 1592/ND/2019 in CP (IB) No. 470 (ND)/2017. By the impugned order, the Adjudicating Authority has made certain observations about the Resolution Professional ( RP in short) in the conduct of the Corporate Insolvency Resolution Process ( CIRP in short) of the Corporate Debtor-Kindle Developers Private Limited. Aggrieved by the observations contained in the impugned order relating to conduct of CIRP by the Appellant/RP, the present appeal has been preferred. 2 .Making his submissions, the Learned Counsel for the Appellant submitted that the Corporate Debtor was admitted into CIRP on 09.03.2018. The RP had submitted the resolution plan which had been approved by the Committee of Creditors ( COC in short) with a voting percentage of 92.39% before the Adjudicating Authority for approval at which stage an application was filed by the Respondent-Noida authority vide I.A. No. 1592/2019, see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity on 10.11.2020. In view of this cancellation, the subject lease land could not have been dealt in the resolution plan of the Corporate Debtor. 5 .It was also asserted that the Adjudicating Authority while considering the I.A.No. 1592/2019 had correctly held that the RP in spite of being fully conscious and aware of the fact that cancellation of the lease of the subject plot had taken place, yet the RP continued to take all action including preparation of the Information Memorandum projecting the cancelled lease of the subject land as an asset of the Corporate Debtor and for inviting Expression of Interest ( EOI in short) to obtain resolution plans from prospective resolution applicants. Submitting that the RP acted irresponsibly in getting approval of the resolution plan from the COC as if the said plot of land existed with the Corporate Debtor, it was contended that the observations of the Adjudicating Authority that the RP was attempting to justify the wrong and fraudulent action of the suspended management of the Corporate Debtor that the lease over the land was still subsisting was justified. 6 .We have duly considered the arguments advanced by the Learned Counsel for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he RP that though the Respondent/Noida authority had issued the lease cancellation letter dated 13.08.2015, the project engineer of Noida authority did not take back the possession of land from the Corporate Debtor after 30 days of the cancellation which it was required to do. Neither did the Noida authority take proper steps to resume the land as per Sections 13 and 14 of the UP Industrial Area Development Act, 1976. No forfeiture letter was also issued by the Noida authority following cancellation of the lease. Respondent had not taken back the possession of the subject land from the Corporate Debtor. Instead, it allowed the lease premium and lease rental to accumulate in its books. Moreover, Noida authority had never objected to the UP RERA registration of 15.08.2017 and this had resulted in creation of third-party rights over the subject plot. It was only on 10.11.2020 that the Noida authority rejected the request for restoration of the plot of land by which time moratorium under Section 14 of IBC had come into place. 10 .In defence of its diligent conduct of the CIRP proceedings, the RP has stated that several meetings were facilitated between the suspended management of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... representation and that a decision was taken thereon by the Noida authority on the directions of the Adjudicating Authority which was passed on 12.10.2020. The Noida authority on 10.11.2020 had sent a detailed reply stating that the restoration application is rejected in view of violation of the terms of the lease deed dated 24.10.2011. In the present case, the Adjudicating Authority has correctly held that since the lease deed had been cancelled much before the commencement of the CIRP, the Corporate Debtor had lost the right to possess the subject plot before the initiation of CIRP. Since the subject plot ceased to be an asset of the Corporate Debtor with effect from 13.08.2015, the provision of moratorium in terms of Section 14 of the IBC will not get attracted in the present case. 13 .There is nothing on record to show that post cancellation of the lease deed, the Noida authority was paid any lease rent or there is any written permission or assent of the Noida authority for restoration or continuation of the said lease. Simply by having filed an application for restoration of the said plot of land, the deemed subsistence or continuation of the lease deed cannot be presumed. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Noida authority, the RP should not have treated the subject plot to be in the possession of the suspended management. Given this set of facts, RP should have been more circumspect and should not have agreed to make the housing project of suspended management on the subject plot a part of the resolution plan. Instead, the RP continued to take all actions including preparation of the IM projecting the cancelled plot as the asset of the Corporate Debtor and getting approval of the resolution plan from the COC as if the said plot existed with the corporate debtor. Such a resolution plan which is premised on the basis that the land belonged to the Corporate Debtor could not have been considered by the COC. In the adjudication of I.A. No. 1592 of 2019, the Adjudicating Authority on 20.02.2020 had noted that the Noida authority had apprised the Bench that the lease of the subject land which constituted the substratum of the housing project of the Corporate Debtor was cancelled and not subsisting. The Adjudicating Authority had therefore correctly raised the question of how it could consider a resolution plan when the lease of the allotted land had already been cancelled by the Noida auth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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