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TMI Blog2025 (5) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... was. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are:- 2.1. On application filed under Section 7 by M/s. Assets Care and Reconstruction Enterprise Pvt. Ltd., CIRP against the Corporate Debtor- Rajesh Cityspaces Private Limited commenced on 15.01.2024. Mr. Ajit Gyanchand Jain- Respondent No.1 was appointed as Interim Resolution Professional (IRP). On 31.05.2024, the IRP has sent an e-mail to the Suspended Board of Directors including the Appellant requesting to handover the physical possession of the property admeasuring 20,881 sq. ft. at Nutan Kailash Nivas Co-operative Society, R.B. Mehta Road, Ghatkopar East, Mumbai. IRP thereafter filed an application being IA No.4820 of 2024 on 12.08.2024 seeking physical possession of the larger property. In the said application, notices were issued on 08.10.2024. A reply was filed in the IA No.4820 of 2024 by Respondent No.2- Mr. Rajesh Raghavji Patel, suspended Director of the Corporate Debtor stating that Flat Nos. 601 and 1101 are in possession of the Appellants based on the arrangement recorded in the Board Resolution dated 14.09.2017. No reply was filed by the Appellant to the application. The Adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is continuing in possession of the said flats which is creating hurdle in successful resolution of the Corporate Debtor. It is submitted that certain Resolution Applicants have withdrew on the ground that there is no clarity with regard to possession of the Flats. It is submitted that the Appellants are not entitled to continue in the possession and the Adjudicating Authority at the time of reserving the order on 12.03.2025 has only observed that Appellants at best would have one month time to vacate the premises and when order was passed by the Adjudicating Authority on 22.04.2025, Adjudicating Authority noticed that more than 40 days' have been passed, when the matter was heard, Appellant has not handed over the possession, hence, direction was issued to handover the possession within 10 days. It is submitted that the Adjudicating Authority has jurisdiction to entertain the application filed by the IRP for taking possession of the assets of the Corporate Debtor. It is submitted that the IRP was duty bound to take possession of the assets of the Corporate Debtor. Counsel for the Respondents has also relied on various judgments of this Tribunal in support of the submission. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess vide order dated 15.01.2024 passed by the Hon'ble National Company Law Tribunal Mumbai Bench. As you are aware, the corporate insolvency resolution process has been initiated for Rajesh Cityspaces Private Limited, and the management of its affairs now vests with the interim Resolution Professional as per the Insolvency and Bankruptcy Code. While symbolic possession has been taken by the Financial Creditor, Assets Care & Reconstruction Enterprise Limited, prior to the initiation of CIRP, I am writing to seek your urgent cooperation in physically handing over the possession of all assets, properties, documents records and units/inventory pertaining to Rajesh Cityspaces Private Limited that are currently under your control or possession. This includes but is not limited to Description of the Property (Plot No. 353/4A) situated at Village Ghatkopar (East) Kirol, District Mumbai Suburban together with all buildings constructed and to be constructed thereon comprising a minimum saleable carpet area of 20.880 square feet ("property') Details of Unsold Units of Project Kailash Niwas S.No. Unit Number Saleable Area (in sq. ft.) 1 103 1,157 2 601 691 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lohia and Anr.- (2023) 7 SCC 227" and submitted that the order was passed by NCLT to protect the interest of Victory Iron who was in possession of the assets. In the above judgment, Appellant- Victory Iron has claimed possession by virtue of leave and license agreement. CIRP commenced against Avani Towers Pvt. Ltd. (developer) who had development rights in the assets. On an application filed before the NCLT where the activity of Victory Iron was on a piece of land, over which the possession was protected. Victory Iron has claimed by virtue of leave and license agreement which is noticed in paragraph 4 of the judgment is as follows:- "4. M/s Victory Iron Works Ltd. (for short "Victory") which is the appellant in CA No. 1743 of 2021, claims to be in possession of the property in entirety, partly by virtue of a leave and licence agreement and partly by virtue of an oral understanding." 11. The Hon'ble Supreme Court in paragraph 52 has made following observations where interest of Victory Iron was protected:- "52. The fact that there were security guards posted in the property is borne out by records. This is why NCLT as well as NCLAT have done a delicate act of balancing, by pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king 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 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 empower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Supreme Court dated 01.04.2024 relied by the Appellant in the above case was on the facts of the said case and on the said basis Appellant cannot claim a right to continue in the occupation for three months as claimed herein. 16. We, thus, do not find any substance in the submission of the Counsel for the Appellant that application filed by IRP was not maintainable before the Adjudicating Authority. Admittedly, the Flats were owned by the Corporate Debtor and IRP was under obligation to take possession of the assets of the Corporate Debtor. Counsel for the Resolution Professional submitted that the CIRP process is underway and Resolution Plan has been received and there being no clarity with regard to Flat Nos.601 and 1101 and Resolution Applicants are withdrawing. Reference of one of the emails received from Resolution Applicants dated 20.01.2025 has been made where one of the Resolution Applicants has expressed his intention to withdraw from the Resolution Process. Appellant himself has brought on the record the said e-mail dated 20.01.2025 along with Additional Affidavit which is as follows:- "Dear Sir We invite your kind attention towards the Resolution plan submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation was noticed and rejected. In paragraphs 14, 19, 20 & 21 of the judgment, following was observed:- "14. For effectuating the duties entrusted on the IRP under Section 18 recourse to adjudicating Authority by filing an Application under Section 60(5) is fully permissible. In the present case, we are considering the case where there is no dispute that assets in question is owned by the Corporate Debtor hence by virtue of Section 18(1)(f), Resolution Professional can take steps for taking possession of the assets. To resist the case taken by the RP, Appellant contends that under Section 60(5), no Application can be entertained for eviction of the Appellant and the only remedy available to the RP is to take proceedings under MP Accommodation Control Act, 1961. It is further relevant to notice that present is a case where renewal lease dated 17.09.2021 was executed by the RP himself for a period of 5 months till 31st December, 2021. The Appellant thus was permitted by the RP to continue with the Lease for five months till 31.12.2021 and we have already noticed the conditions in the rent agreement as extracted above. Paragraph 11 and 16 which clearly stipulated that first party i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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