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TMI Blog2025 (1) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... stion alongwith the tenant and RAE Suit No. 149 of 2011 was filed by the CD for seeking eviction of the Appellants from the property in question, who have stepped into shoes of the predecessor in interest after his death on inheriting the tenancy right in the property in question. It is also not in dispute that the CIRP was initiated on 17.03.2023 and by at that time Suit No. 149 of 2011 was pending but the IRP, having been appointed as such on 26.04.2023 did not pursue the suit for eviction which was a right procedure because the tenancy was continuing and eviction was sought only on the ground of bonafide need of the CD as an owner who wanted to demolish the structure in possession of the present appellants as tenants for raising a new construction over the property in question. The Tribunal has committed an patent error in passing the order of eviction considering the possession of the Appellants as of the lessee which is evident from the fact that in the impugned order itself a direction has been issued by the Tribunal that the RP is empowered to take custody of all the assets of the CD including the present property which is under the lease. There is a sharp difference between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2023 the Respondent (IRP) was appointed as the RP of the CD. 3. The RP alleged to have visited the property in question owned by the CD and found that it was occupied by the present Appellants who have claimed their tenancy right over the same. 4. The RP filed I.A. No. 4632 of 2023 under Section 60(5) r/w Section 25(2)(a) of the Code for taking control and possession of the property in question owned by the CD by evicting the present Appellants from its occupation. 5. Whereas the case set up by the Appellants before the Tribunal is that the property in question was in occupation of Late Shri Suresh Padmanabha Hegde as a tenant, protected under Maharashtra Rent Control Act, 1999 (in short Act ). 6. It is alleged that their predecessor in interest filed a RAD Suit No. 916 of 2005 before the Small Causes Court, Bandra Branch, Mumbai for declaration that he is a monthly tenant in the property in question. 7. The suit was decreed on 26.11.2009 with the following order:- Suit is decreed with costs. It is hereby declared that Plaintiff is tenant of the defendant in respect of the suit premises viz Villa Mohindra Outhouse, 13th Road, TPS III, CTS No. 543, Khar (W), Bombay 400052. The Def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CD including the property which is under lease, the Appellant filed the present appeal in which the following order was passed on 28.05.2024 which read as under:- The Ld. Counsel for the appellant submits that the Adjudicating Authority by impugned order had directed the eviction of the appellant who was lawful tenant in whose favour the decree by the Ld. Small Causes Court at Bandra and it was after the decree the corporate debtor has filed a suit for eviction being Suit No. 149 of 2011 which is still pending for consideration. It is submitted in the said circumstances Adjudicating Authority could not had directed the eviction of the appellant. Issue notice. Let Reply Affidavit be filed within three weeks . Rejoinder, if any, may be filed within two weeks, thereafter. List this appeal on 30.07.2024. In the meantime, in pursuance of the impugned order appellant shall not be evicted from the premises 13. It is also pertinent to mention that after the impugned order was passed, the RAE Suit No. 149 of 2011 filed by the CD was dismissed for non- prosecution on 16.11.2024. 14. Counsel for the Appellant has argued that the Tribunal has committed a patent error in not understanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Debtor from the premises in question, even if during period of moratorium they have agreed to vacate it. The period of moratorium has come to an end on 19th April, 2018 i.e. date of approval of resolution plan under Section 31, therefore, now it is open to the Appellant to get the Corporate Debtor evicted, if it is still in occupation, in accordance with law. However, as the Adjudicating Authority is not competent authority to pass any order for eviction, Adjudicating Authority rightly not passed any such order. 16. He has also relied upon another decision of this Court in the case of Devendra Padamchand Jain Vs. Sandhya Prakash Ors., 2018 SCC Online 578 in which the following observations have been made:- 2. Learned counsel for the appellant referring to sub-section (f) of Section 18 of the Insolvency and Bankruptcy Code, 2016 submits that duty of insolvency resolution professional is to take over assets that may or may not be in possession of the Corporate Debtor. Though we accept the submission made above, that does not mean the insolvency resolution professional can remove the tenant though it is open to him to take over the possession of the assets of the Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may use the tenanted premises as a security interest while taking a loan from a bank and subsequently default on it. Conversely, a landlord would simply have to give up the tenanted premises as a security interest to the creditor banks while he is still getting rent for the same. In case of default of the loan, the maximum brunt will be borne by the unsuspecting tenant, who would be evicted from the possession of the tenanted property by the Bank under the provisions of the SARFAESI Act. Under no circumstances can this be permitted, more so in view of the statutory protections to the tenants under the Rent Control Act and also in respect of contractual tenants along with the possession of their properties which shall be obtained with due process of law. 37. It is a settled position of law that once tenancy is created, a tenant can be evicted only after following the due process of law, as prescribed under the provisions of the Rent Control Act. A tenant cannot be arbitrarily evicted by using the provisions of the SARFAESI Act as that would amount to stultifying the statutory rights of protection given to the tenant. A non obstante clause (Section 35 of the SARFAESI Act) cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the corporate debtor. (2) For the purposes of subsection (1), the resolution professional shall undertake the following actions: (a) . (b) represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi judicial and arbitration proceedings. c. This shows that wherever the corporate debtor has to exercise rights in judicial, quasijudicial proceedings, the resolution professional cannot shortcircuit the same and bring a claim before NCLT taking advantage of Section 60(5). d. Let us take for instance a case where a corporate debtor had suffered an order at the hands of the Income Tax Appellate Tribunal, at the time of initiation of CIRP. If Section 60(5)(c) of IBC is interpreted to include all questions of law or facts under the sky, an Interim Resolution Professional/Resolution Professional will then claim a right to challenge the order of the Income Tax Appellate Tribunal before the NCLT, instead of moving a statutory appeal under Section 260A of the Income Tax Act, 1961. Therefore the jurisdiction of the NCLT delineated in Section 60(5) cannot be stretched so far as to bring absurd results. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NCLT and NCLAT to ensure that they do not usurp the legitimate jurisdiction of other courts, tribunals and fora when the dispute is one which does not arise solely from or relate to the insolvency of the Corporate Debtor. The nexus with the insolvency of the Corporate Debtor must exist. 74. Therefore, we hold that the RP can approach the NCLT for adjudication of disputes that are related to the insolvency resolution process. However, for adjudication of disputes that arise dehors the insolvency of the Corporate Debtor, the RP must approach the relevant competent authority. For instance, if the dispute in the present matter related to the non-supply of electricity, the RP would not have been entitled to invoke the jurisdiction of the NCLT under the IBC. However, since the dispute in the present case has arisen solely on the ground of the insolvency of the Corporate Debtor, NCLT is empowered to adjudicate this dispute under Section 60(5)(c) of the IBC 91. 87 The residuary jurisdiction of the NCLT under Section 60(5)(c) of the IBC provides it a wide discretion to adjudicate questions of law or fact arising from or in relation to the insolvency resolution proceedings. If the jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenant pays, or is ready and willing to pay, the amount of the standard rent and permitted increases, if any, and observes and performs the other conditions of the tenancy, in so far as they are consistent with the provisions of this Act 24. It is submitted that the tenants are in default of rent payment and were liable for eviction and because of their continuing non-payment of rent and breach of tenancy terms, cannot seek refuge under the Act and are liable to be evicted. He has relied upon a decision in the case Jhanvi Rajpal Automotive Pvt. Ltd. Vs. R.P of Rajpal Abhikaran Pvt. Ltd. Anr., CA (AT) (Ins) No. 1417 of 2022 decided on 05.01.2023 and pressed para 20 and 21 of the said decision which read as under:- 20. Accepting the contention of the Learned Counsel for the Appellant that RP is obliged to file a suit for eviction of the Appellant under MP Accommodation Control Act, 1961 even though lease in favour of the Appellant has expired shall be unduly prolonging the insolvency process which is a time bound process. When the Corporate Debtor has the ownership rights over the premises which premises can be taken in control by IRP/RP, we are of the view that for eviction of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Appellants from the property in question, who have stepped into shoes of the predecessor in interest after his death on inheriting the tenancy right in the property in question. It is also not in dispute that the CIRP was initiated on 17.03.2023 and by at that time Suit No. 149 of 2011 was pending but the IRP, having been appointed as such on 26.04.2023 did not pursue the suit for eviction which was a right procedure because the tenancy was continuing and eviction was sought only on the ground of bonafide need of the CD as an owner who wanted to demolish the structure in possession of the present appellants as tenants for raising a new construction over the property in question. The RP rather filed an application under Section 60(5) r/w Section 25(2)(a) of the Code before the Tribunal by short circuiting the route of eviction of the present appellants under the garb of the provisions of the Code. The Tribunal has committed an patent error in passing the order of eviction considering the possession of the Appellants as of the lessee which is evident from the fact that in the impugned order itself a direction has been issued by the Tribunal that the RP is empowered to take ..... X X X X Extracts X X X X X X X X Extracts X X X X
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