TMI Blog2022 (9) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... lready requested the Applicant/KIADB to fix the price of the land that was allotted to them by means of letter dated 18.10.2016 so as to obtain Sale Deed by them for which the Applicant/KIADB vide their letter dated 28.11.2016 informed the Corporate Debtor that the board of the Applicant/KIADB has not yet fixed the final price to the said industrial area and hence the Sale Deed cannot be considered at this stage. Of course, the Applicant/KIADB also issued notice under Section 34 B of KIAD Act of 1966 to the Resolution Professional to remedy the alleged breaches said to have been committed by the Corporate Debtor in their notice. It is clear from the terms and conditions of the Lease Deed as well as the various correspondence relied by them that the Corporate Debtor is in physical possession and enjoyment of the land allotted to them under the above registered Lease Deed and both parties are alleging breach of terms and conditions of the registered Lease-Cum-Sale-Agreement against each other and the Applicant/KIADB could not evict the Corporate Debtor due to kicking of moratorium. Thus, it is held that whatever legal rights the Corporate Debtor had already acquired under the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clause 10 (2)- The lessee shall utilise not less than 50% of the schedule property and in accordance with the proposal furnished by the lessee to the lessor in the application for the allotment of land and project report submitted to SHLCC/ SLSWCC/ DLSWCC/ Allotment Committee. 4. That, on December 09, 2014, Karnataka State Pollution Control Board granted consent for discharge of effluents under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 and emission under Section 21 of Air (Prevention and Control of Pollution) Act, 1982 in favour of the Corporate Debtor authorising it to operate its industrial plant at the Lease Property. The said consent was applicable for the period from July 10, 2014 to June 30, 2015. 5. That, on October 18, 2016, the Corporate Debtor herein sought to execute an absolute sale deed for the allotted Lease Property from the Applicant herein which was subsequently refused by the Applicant vide its letter dated December 20, 2016 stating that it has not yet fixed the final price to the said industrial area. 6. That, on February 14, 2020, an order was passed by this Hon ble Tribunal admitting Mahakali Fuel Pvt. Ltd s applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s missed out certain areas of land in calculating total land use and not considered the mandatory land use requirement under various other laws. In the said email, it was informed to the Applicant by the Respondent No. 1 that it has appointed one local architect to prepare a land utilization report and based on the said report the Respondent No. 1 will be able to make submissions before the Applicant herein. In light of the same, the Respondent No. 1 has requested the Applicant herein for additional time to make its submissions in relation to this dispute. 13. That, the Applicant had served a notice dated October 30, 2021, directing the Respondent No. 1 to appear before the chief executive officer of the Applicant for a personal hearing on November 10, 2021. 14. The personal hearing was conducted on November 10, 2021, wherein representatives of the Corporate Debtor made their submissions. On the same date, an order was passed by the Applicant whereby a joint inspection was required to be conducted on November 19, 2021 in the presence of the representatives of the Corporate Debtor in relation to the implementation/utilization of the Lease Property. 15. The joint inspection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for over a period 10 years. This is nothing else but a mere attempt to waste precious time in this corporate insolvency and resolution process. It is relevant to point out that way back in 2016, the erstwhile management/directors had also written a letters dated 18th October 2016 and 28th November 2016 asking the Applicant to inform them about the selling price fixed by the applicant so that the then management could proceed with the agreement to sale the transfer the requisite selling price. In fact in response the Applicant merely stated that it has not yet fixed any selling price and hence the then management were to wait till such decision is taken. It is critical to note that at no point in time even in the said response letter of the Applicant did it ever allege any sorts of breach of the lease agreement or the fact that the utilisation of the subject land is less than the requisite requirement. Hence it is clear that the entire intent of the Applicant is merely to put a spoke in the wheel of the present resolution plan approval process and stall the proceedings which is not the intent of the Code. Hence the present Application deserves to be dismissed. Para. 15. The Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to leave open space for vehicle maintenance area to be designed to prevent contamination of ground water by accidental spillage of oil. Para.16.3 In terms of clause 14.1 of the of the Environmental Management Plan submitted to KSPCB, the Corporate Debtor is also required to maintain an assembly point for the employees in the open space near the Plant . All the above-mentioned area which are required to be utilised in terms of the Environment Management Plan and no structure can be constructed on the designated land area which itself comprises of approx. 19 acres and the same though acknowledged by the Applicant itself in its report has not considered by the Applicant while computing the total area utilised by the Corporate Debtor for reasons best known to the Applicant. This clearly is done purely with an intent to serve its own purpose without appreciating the order statutory requirements which the Corporate Debtor is required to comply with and the same cannot be on the whims and fancies of the Applicant. Para. 17. The Respondents No. 1 submits that as far as paragraph nos. 17 and 18 are concerned, the Applicant is referring to series of communicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pollution control Board which warrants the Corporate Debtor to leave open space which works out to 19.17 acres as per Applicant s own calculations. This itself takes the utilisation of land to 50.28% (without prejudice to the fact that the entire land has been occupied to the extent of 86.68 acres i.e. 86.68%) and hence, based on the contents of the Application itself the so called alleged claim of under-utilisation and issuing a notice upon the Corporate Debtor falls flat and evidences that the present application itself is infructuous by conduct of the Applicant itself. Furthermore it is also important to note that any are open space reserved as am assembly point , garden, open storage space, Parking area for vehicles and trucks, utility area etc. are always to be treated as part of utilisation of land and cannot be ignored since these spaces are intrinsically linked with its usage from the purpose of operations of the Corporate Debtor. I reserve the right to rely on such other documents and correspondences in case necessary during the course of the proceedings. Be that as it may, it is important and relevant to bring on record the extract of a report as available in the rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of business operations. It is now after a decade the Applicant is challenging the utilisation of the said land with sole intent to extort money from the prospective Resolution Applicant. It is clear that if the Applicant continues with its current conduct, the Resolution Plan would fail as nothing remains in the Corporate Debtor and would trigger loss of livelihood of 300 workmen which would impact approx./ 2000 people including their family members, while the secured lenders may not even be in the position to recover 5% of their admitted claims if it goes under liquidation. With regard to the contention of the Applicant that merely 30.91% of the land has been utilised by the Corporate Debtor, the same has been dealt in detail hereinabove detailing as to how such contention of the Applicant is incorrect and false and is clear that the Applicant has approached this Hon ble Adjudicating Authority with unclean hands. FINDINGS 17. In the light of the above rival contentions of both parties, the issues that needs to be decided in the above Interlocutory Application are as follows: i. Whether the reliefs sought by the Applicant/KIADB are capable of being granted by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest/shareholdings in the lessee s firm/company till the end of the lease period/execution of sale deed, whichever is later. Clause 14 - The lessor shall be entitled to determine the lease hereby granted and to resume the possession of the whole of the Schedule Property or any part thereof, including existing structures if any thereon, whenever there is breach of any of the covenants and obligations contained herein by the lessee, after due notice to the lessee or after various stages as contemplated in the clause-10 supra are complete. Clause 16 - Notwithstanding any such default the lessor may at its discretion extend the period of lease at the cost and expense of the lessee on payment of rent mentioned herein before and subject to the same covenants, provisions and stipulations herein contained. Clause 17 - The lessor may at its discretion consider the request of the lessee for the transfer of leasehold rights of schedule property in favour of a new entrepreneur as identified by the lessee during the currency of lease, imposing such terms and conditions as decided by the lessor from time to time in this regard, provided that such transfer shall be permissible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Corporate Debtor in their notice. 22. Therefore, it is very clear from the above terms and conditions of the Lease Deed as well as the various correspondence relied by them that the Corporate Debtor is in physical possession and enjoyment of the land allotted to them under the above registered Lease Deed and both parties are alleging breach of terms and conditions of the registered Lease-Cum-Sale-Agreement against each other and the Applicant/KIADB could not evict the Corporate Debtor due to kicking of moratorium. 23. It is well settled proposition of law that no person who is in settled possession of any immovable property can be evicted by force except under due process of law. Since the Applicant/KIADB and the Corporate Debtor are alleging commission of breach of terms and conditions of the above registered Lease-Cum-Sale- Agreement against each other, the remedy of the Applicant/KIADB is only to approach a competent Civil Court for the reliefs claimed by them in the present Interlocutory Application as per the law laid down by the Hon ble Supreme Court in Civil Appeal No. 9170 of 2019 in the matter of M/s Embassy Property Developments Pvt. Ltd. Vs. State of Karnataka ..... X X X X Extracts X X X X X X X X Extracts X X X X
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