Tribunal Upholds RP's Authority to Take Possession for CIRP

The Tribunal held that NCLT has the authority to order the RP to take possession of the Shed to facilitate the CIRP process. The judgment affirmed the RP's right to control the Corporate Applicant's assets, directing the RP/Liquidator to take possession of the Shed from the Applicant, despite pending civil suits.

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Issues Involved:
1. Legality of the Applicant's occupation of the Shed.
2. Jurisdiction of NCLT versus Civil Court in matters of possession and insolvency.
3. Rights and duties of the Resolution Professional (RP) under the Insolvency and Bankruptcy Code (IBC), 2016.
4. Impact of pending civil suits on the CIRP process.

Issue-wise Detailed Analysis:

1. Legality of the Applicant's Occupation of the Shed:
The Applicant contended that he was not in illegal occupation of the Shed and had been occupying it under an Agreement dated 28th January 1997. He claimed to have been a former employee of the Corporate Applicant and later started his own business in the Shed. The RP argued that the Applicant was in illegal occupation and had breached certain conditions of the Agreement, which entitled the Corporate Applicant to reclaim the Shed.

2. Jurisdiction of NCLT versus Civil Court in Matters of Possession and Insolvency:
The judgment emphasized that Section 60(5) of the IBC grants NCLT exclusive jurisdiction over matters related to insolvency resolution or liquidation of the Corporate Applicant. Section 63 and Section 231 further bar civil courts from intervening in matters under NCLT's purview. The judgment referenced several cases, including "Liberty House Group Pte Ltd. Vs. State Bank of India" and "Innoventive Industries Ltd. Vs. ICICI bank," to underscore that NCLT has the jurisdiction to entertain and dispose of any application related to the insolvency process, and civil courts cannot grant injunctions in these matters.

3. Rights and Duties of the Resolution Professional (RP) under the IBC, 2016:
The RP has the duty to take control and custody of any asset over which the Corporate Applicant has ownership rights, even if those assets are not in the Corporate Applicant's possession. The judgment cited "Swiss Ribbons (P) Ltd. Vs. Union of India," which clarified that the RP does not have adjudicatory powers but must manage the assets of the Corporate Applicant. The RP's right to claim possession of the Shed was upheld under Section 18 of the IBC, which mandates the RP to take control of the Corporate Applicant's assets.

4. Impact of Pending Civil Suits on the CIRP Process:
The judgment noted that there were two pending civil suits: one by the Corporate Applicant seeking possession of the Shed and another by the Applicant for recovery of money. The court ruled that the RP's duty to take possession of the Shed was not impeded by these pending suits. The judgment referenced "Tata Steel BSL Ltd. Vs. Varsha" and other cases to assert that the initiation of CIRP does not extinguish existing legal disputes but places them under the jurisdiction of NCLT.

Conclusion:
The Tribunal concluded that NCLT has the authority to order the RP to take possession of the Shed to facilitate the CIRP process. The judgment affirmed that the RP's right to take control of the Corporate Applicant's assets is paramount, notwithstanding the pending civil suits. The Tribunal directed the RP/Liquidator to take possession of the Shed from the Applicant, aligning with the decision of Member (Judicial).

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