TMI Blog2022 (11) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty to a third party, thus signifying that the corporate debtor has the right to transfer the property to a third party and not merely the right to use the property. In the present context, the Chandigarh Administration has not raised any objection despite being informed about the liquidation proceedings and there are provisions in the lease deed regarding transfer of the property to a third party subject to certain conditions. The title to the land continues to remain with the corporate debtor, i.e. James Hotels Limited even after the successful bidder takes over the Corporate debtor. Thus, the assertion of the applicant that the lease deed is a contractual agreement, and the leased land cannot form a part of the Liquidation Estate of the Corporate Debtor is in the teeth of the provisions of Section 36(4)(a)(iv) of the Code appears misconceived - the leasehold rights of the Corporate Debtor over the land in the present case are its intangible assets within the meaning of Section 36(3)(d) of the Code and the same can be a part of the assets for E-auction as a Going Concern , especially when even after the implementation of the bid the corporate debtor continues to exist a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has filed CA No. 202/2019 under Section 42 of IBC, which was disposed of by order dated 27.03.2019 directing the Respondent-Liquidator to reconsider the claim of the appellant on merits. vi. Thereafter, the appellant sent an email dated 05.04.2019 to reconsider the claim dated 28.01.2019. The liquidator has sent an email dated 10.05.2019 wherein the claim of the appellants were partly rejected to the tune of Rs. 2,97,149/- out of a total claim of Rs. 7,33,372/- 4. It is averred by the appellant that he joined the Corporate Debtor on 17.02.2014 as Chief Financial Officer (reappointed as Chief Operating and Financial Officer) and was serving the Corporate Debtor in the same capacity even after the commencement of CIRP. The Appellant has faced medical problems and sought sick leave of five days by email dated 06.07.2017 and the same was denied by the Respondent. The appellant submitted a resignation on 27.07.2017 through email on health grounds. Afterwards, the parties exchanged various emails wherein the authorised person of Corporate Debtor sought confirmation for filing resignation with RoC and Stock Exchanges and the Appellant has demanded release of salary for the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by you in case you wish to leave the services of the company. 9. It is noted that the appellant has sought leave of 5 days by email dated 06.07.2017 on medical grounds and requested for an extension on 24.07.2017 and on 25.07.2017. The appellant has submitted his resignation by email dated 27.07.2017, although the same has not been accepted by the respondent. The appellant has filed a claim amounting to Rs.7,33,372/- which was already partially admitted consequent to certain directions by this Bench. The respondent has rejected the claim of Rs.2,97,149/- on the ground that the amount of one month salary has to be deducted as the appellant has not served the notice period. Moreover, PF, TDS and other deductions from June and July were duly deposited with the authorities and there is no provision for payment of interest in the appointment letter. The respondent has passed the claim of the appellant after deducting the aforesaid amounts. In view of above facts, we hold that the respondent has rightly rejected the claim as per the terms of the contract with the appellant to the tune of Rs.2,97,149/- as the appellant has neither served the corporate debtor during the period for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of Section 33(2) of the Code. ii) Subsequently, this Adjudicating Authority has passed an order dated 17.10.2018 for the liquidation of the Corporate Debtor. iii) During the liquidation process, the liquidator has taken out several notices for the auction of the Corporate Debtor as a going concern but the same were unsuccessful. iv) For the purpose of the sixth e-auction, the liquidator has issued sale notice dated 17.12.2019 which was revised on 28.12.2019 for the sale of the Corporate Debtor as a going concern in an e-auction to be held on 03.02.2020. v) In the meanwhile, the liquidator has completed the auction process of the corporate debtor and respondent No. 2 has emerged as the successful bidder in the e-auction dated 03.02.2020 with a bid of Rs. 150.05 crores for the purchase of the Corporate Debtor as a going concern. 14. As, it is clarified during the present proceedings in CA No. 15 of 2020, the learned counsel for the applicant has restricted his arguments to the issues submitted in the rejoinder filed by Dairy No. 82 Dated 30.01.2020. The issues raised in the said rejoinder, and the issues raised in IA No. 553/2020, by the applicant are summarised as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company which shows that the applicant is taking contradictory views in their pleadings. The information memorandum contains all the details and nothing has been concealed therein. Even if it is assumed that such concealment has been made, it would not effect the purchaser of the property. 16. The respondent-liquidator has filed synopsis vide Diary No. 00690/11 dated 22/08/2022, wherein it has been averred that the leasehold property has been allotted by Chandigarh Administration in 1986 upon a public auction for a term of 99 years. The respondent has placed reliance on State of Punjab (now Haryana) and Ors. Vs. Amar Singh Ors. (1974) 2 SCC 70 dated 21.01.1974 wherein it has been held that there can, therefore, be no doubt that the expression transfer or other deposition of land must definitely cover leases which, by very definition, are a species of transfer of land . It is further submitted that in the case of Associated Hotels of India Limited Vs. R.N. Kapoor, AIR 1959 SC 1262 dated 19.05.1959, the Hon ble Apex Court has clearly defined a licence as a right to use the property in a particular way or under certain terms while it remains in possession and control of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of Section 36 (3) read with Section 36 (4) of the Code as the Corporate Debtor is not the owner of the land. 20. In the present case, it is noted that the leasehold land in question was allotted to Mehfil Restaurants and Hotel Limited in the year 1986 through an auction process and its name was subsequently changed to James Hotels Limited. Three different promoters bought this company by taking over the corporate debtor and changing the management. All this happened before the Liquidator came into the picture. The lease deed, through which the property was auctioned, contains express covenants regarding the transfer of property to a third party, thus signifying that the corporate debtor has the right to transfer the property to a third party and not merely the right to use the property. The relevant clause from lease deed dated 25.01.1986 is reproduced as under: 4.a The Lessee shall not transfer or assign his/their rights in the site without the prior consent of the Estate Officer. Such permission shall not be given until the lessees have paid the full premium and the rent due under the lease unless in the opinion of the Estate Officer exceptional circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Process along with Draft Regulations dated 27.04.2019, the term going concern was explained to mean all such assets and liabilities, which constitute an integral business or the Corporate Debtor, that must be transferred together, and the consideration must be for the business or the Corporate Debtor. The buyer of the assets and liabilities should be able to run the business without any disruption. 25. It is clear from the landmark Judgment, in M/s Innovative Industries Limited Vs. ICICI Bank and Anr. in Civil Appeal Nos. 8337-8338 OF 2017 dated 31.08.2017, Arcelormittal India Pvt. Ltd. in Civil Appeal Nos. 9402-9405 OF 2018 Dated 04.10.2018, and Swiss Ribbons Pvt. Ltd Anr. in Writ Petition (Civil) No. 99 OF 2018 dated 25.01.2019, that if there is a Resolution Applicant who can continue to run the corporate Debtor as a going concern, every plausible effort must be made to ensure the same. 26. The issue whether such lease hold properties can be termed assets as per Section within the ambit of Section 18(f)(iv) of the code has been considered at length by the Hon ble NCLAT in New Okhla Industrial Development Authority Vs. Mr Amit Agarwal Liquidator of Boulevard Proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jection despite being informed about the liquidation proceedings and there are provisions in the lease deed regarding transfer of the property to a third party subject to certain conditions. The title to the land continues to remain with the corporate debtor, i.e. James Hotels Limited even after the successful bidder takes over the Corporate debtor. Thus, the assertion of the applicant that the lease deed is a contractual agreement, and the leased land cannot form a part of the Liquidation Estate of the Corporate Debtor is in the teeth of the provisions of Section 36(4)(a)(iv) of the Code appears misconceived. It is pertinent to note that the applicant is ex-promoter and when Chandigarh Administration has no objection, then it can be safely concluded that the applicant has no locus standi to agitate the issue. 30. Keeping in view the above discussion and following the decisions of the Hon ble Apex Court in the case of the Delhi Development Authority (Supra), and the decision of the Hon ble NCLAT in the case of New Okhla Industrial Development Authority (Supra), we hold that the leasehold rights of the Corporate Debtor over the land in the present case are its intangible assets wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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