2018 (1) TMI 1333 - Tri - Insolvency and Bankruptcy

RP's Application Dismissed for Rent Payment and Asset Protection; Relief Under IB Code Denied

The Tribunal dismissed the RP's application seeking rent payment and asset protection from respondents no. 2 to 5 due to lack of COC approval. RP cannot ... Moratorium on recovery of property occupied by corporate debtor - rights of resolution professional to recover rent from tenants - constraint on invoking moratorium against lessor/owner - role of District Administration under regulation 30 for discharge of duties of RP - duty of RP under section 25Moratorium on recovery of property occupied by corporate debtor - constraint on invoking moratorium against lessor/owner - Whether the resolution professional can invoke the moratorium to restrain recovery of property by an owner/lessor occupied by or in possession of the corporate debtor and obtain directions against tenants as unauthorised occupants. - HELD THAT: - The Tribunal held that section 14 of the Insolvency and Bankruptcy Code creates a moratorium against recovery of property but its protection does not extend to prevent an owner or lessor from recovering their property where that property is occupied by or in the possession of the corporate debtor. The resolution professional therefore cannot invoke section 14(1)(d) to seek directions against the lessor/owner or to restrain recovery by them. The application seeking reliefs against the tenants under the moratorium provisions was accordingly dismissed. The absence of Committee of Creditors approval was noted but the decision rests on the limited scope of the moratorium provision as applied to owners/lessors and occupied property.Application for relief against tenants under the moratorium was dismissed; RP cannot invoke section 14(1)(d) to restrain recovery by an owner/lessor.Rights of resolution professional to recover rent from tenants - role of District Administration under regulation 30 for discharge of duties of RP - duty of RP under section 25 - Whether the resolution professional is entitled to recover rent from tenants and what recourse is available if the RP faces difficulty in discharging functions under section 25. - HELD THAT: - The Tribunal clarified that, notwithstanding the dismissal of the application insofar as it sought relief under the moratorium against owners/lessors, the resolution professional is entitled to recover rent from the tenants. For difficulty in discharging statutory functions under section 25, the RP may approach the District Administration under regulation 30 of the Insolvency and Bankruptcy (Insolvency Resolution) Regulations, 2016 for assistance; the Tribunal therefore declined to grant police protection or other directions in this application but left open the RP's statutory remedies and administrative recourse.RP entitled to recover rent from tenants; RP may seek assistance from the District Administration under regulation 30 if necessary; prayer for police protection/directions refused in this application.Final Conclusion: The application was dismissed insofar as it sought relief against tenants and directions under the moratorium; however, the resolution professional remains entitled to recover rent from the tenants and may approach the District Administration under regulation 30 for assistance in discharging duties under section 25. The Tribunal dismissed the application filed by the RP seeking direction for rent payment and asset protection from respondents no. 2 to 5 as it was filed without COC approval. RP cannot invoke section 14 of the IB Code for relief against tenants, but can recover rent and seek assistance from District Administration if needed. Application dismissed in respect of relief against tenants.