2020 (1) TMI 1255 - Tri - Insolvency and Bankruptcy

Jurisdiction - Eviction of the premises - whether this Tribunal lacks jurisdiction to pass order for eviction of the respondent from the premises licence to the respondent dated 30/11/2017? - HELD THAT - The respondent herein being a licensee continuing possession after termination of license became unauthorised occupant and in unauthorised possession who can be evicted and there is no prospective buyers having turned up despite publication of sale with the encumbrance continuing possession by the respondent would definitely defeat the very interest of maximisation of value of the assets of the corporate debtor who is undergoing liquidation. The agreement dated 30/11/2017 makes it clear that there was no tenancy and only temporary occupation was permitted for 11 months by the liquidator and only temporary occupation was permitted for 11 months by the liquidator to the respondent. Article 15.1 read above is one of the conditions of agreement which is bound to obey by the respondent - a proceedings of this nature wherein a person is in occupation of the premises of a corporate debtor company undergoing liquidation is continuing the occupation unauthorisidly this unauthorised occupation is to be ordered to evict. The eviction can be passed in the nature of case in hand. The liquidator is obliged to get maximization of the assets by selling the property at the highest price and therefore in view of the contract between the parties and admission of the respondent that they would vacate the premises on the expiry of license or whenever required even as per the terms of the agreement the respondent company is bound to vacate - respondent is directed to surrender vacant and peaceful possession of the premises to the liquidator within 15 days from the date of this order. Application maintainable.

Summary

Issues Involved:
1. Jurisdiction of the Tribunal to pass an eviction order.
2. Legality of the respondent's occupancy post the expiry of the license agreement.
3. Impact of the respondent's title suit and police complaint on the eviction proceedings.

Issue-Wise Analysis:

1. Jurisdiction of the Tribunal to Pass an Eviction Order:
The primary issue was whether the National Company Law Tribunal (NCLT) had jurisdiction to pass an eviction order against the respondent. The respondent argued that the Tribunal lacked jurisdiction to determine the question of title over the premises and to pass an eviction order, suggesting that such matters should be handled by a competent forum of law. However, the Tribunal concluded that it did have jurisdiction under Sections 35(1)(b) and 35(1)(n) of the Insolvency and Bankruptcy Code, 2016, and Regulation 39 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The Tribunal emphasized that the liquidator's duty to maximize the value of the assets of the corporate debtor necessitated the eviction of unauthorized occupants.

2. Legality of the Respondent's Occupancy Post the Expiry of the License Agreement:
The Tribunal examined the nature of the respondent's occupancy based on the leave and license agreement dated 30/11/2017, which granted the respondent the right to use and possess 17,500 square feet of the first floor of NICCO House for 11 months. The agreement expired on 31/10/2018, and the respondent's continued possession thereafter was deemed unauthorized. The Tribunal noted that the respondent, as a licensee, was bound to vacate the premises upon the expiry of the license agreement. The Tribunal rejected the respondent's claim of being a lessee and emphasized that the leave and license agreement superseded any prior lease agreements.

3. Impact of the Respondent's Title Suit and Police Complaint on the Eviction Proceedings:
The respondent had filed a title suit and a police complaint against the liquidator, which they argued should bar the Tribunal from passing an eviction order. However, the Tribunal held that the pendency of the title suit did not preclude it from exercising its powers under the Insolvency and Bankruptcy Code. The Tribunal referenced several legal precedents, including the case of Punjab National Bank vs. James Hotels Limited, where the NCLT Chandigarh Bench had ordered the eviction of unauthorized occupants in similar circumstances. The Tribunal concluded that the respondent's continued possession was unlawful and obstructed the liquidation process, thereby justifying the eviction order.

Final Orders:
The Tribunal allowed the applications filed by the liquidator and dismissed the respondent's challenge to the maintainability of the applications. The Tribunal directed the respondent to surrender vacant and peaceful possession of the premises to the liquidator within 15 days and to pay an agreed fee with costs of Rs. 1 lakh for unauthorized use of the premises until the date of surrender.