Tribunal Orders Liquidation, Appoints Resolution Professional as Liquidator

The Tribunal authorized the Interim Resolution Professional (IRP) to take possession of the Shed, citing powers under the Insolvency and Bankruptcy Code. A dissenting opinion argued against dispossession without a court order. The Corporate Debtor was ordered into liquidation as no resolution plan was received, appointing the Resolution Professional as Liquidator to commence the liquidation process.

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Issues Involved:
1. Legality of possession of the Shed by the Applicant.
2. Powers and duties of the Interim Resolution Professional (IRP) under the Insolvency and Bankruptcy Code (IBC).
3. Impact of pending civil litigation on the IRP's ability to take possession.
4. Liquidation proceedings of the Corporate Debtor.

Issue-wise Detailed Analysis:

1. Legality of Possession of the Shed by the Applicant:
The Applicant claimed he was not in illegal occupation of the Shed and had been occupying it under an Agreement dated 28th January 1997 with the Petitioner. He contended that he was an erstwhile employee of the Petitioner and had been using the Shed for his own business since 1993. Disputes regarding rent payments arose in 2006/2007, leading to a Special Civil Suit in 2009, which is still sub judice. The Applicant argued that since the issue of possession was pending before the Civil Court, the IRP should refrain from acting on his letter demanding possession of the Shed.

2. Powers and Duties of the Interim Resolution Professional (IRP) under the Insolvency and Bankruptcy Code (IBC):
The IRP argued that under Section 18 of the IBC, he is empowered to take control and custody of any asset over which the Corporate Debtor has ownership rights, including assets under litigation. The IRP emphasized his duty to manage the assets of the Corporate Debtor and argued that the Applicant's claim of lien on the Shed, pending in Civil Court, did not prejudice his rights under the Code.

3. Impact of Pending Civil Litigation on the IRP's Ability to Take Possession:
The Tribunal noted that Section 18 of the IBC allows the IRP to take control of assets owned by the Corporate Debtor, even if they are part of court proceedings. The Tribunal found that the Applicant had not disputed the ownership of the Shed, only the possession. Therefore, the IRP was authorized to take possession of the Shed. However, one member disagreed, stating that the IRP could only take symbolic possession and not physical possession while the matter was sub judice. The dissenting opinion highlighted that the IRP could not dispossess the Applicant without due process of law and a court order.

4. Liquidation Proceedings of the Corporate Debtor:
The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 11.12.2018. The RP was appointed and confirmed by the Committee of Creditors (CoC). Despite efforts to invite claims and expressions of interest, no resolution plan was received. Consequently, the CoC resolved to liquidate the Corporate Debtor. The Tribunal ordered the liquidation of the Corporate Debtor under Section 33 of the IBC, appointing the RP as the Liquidator and directing the initiation of the liquidation process as per the Code and relevant regulations.

Conclusion:
The Tribunal authorized the IRP to take possession of the Shed, emphasizing the IRP's powers under the IBC. However, the dissenting opinion argued against dispossessing the Applicant without a court order. The Tribunal ordered the liquidation of the Corporate Debtor due to the absence of a resolution plan, appointing the RP as the Liquidator and directing the commencement of the liquidation process.

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