Tribunal rules against respondent for breaching moratorium during liquidation process.

The tribunal found in favor of the liquidator, ruling that the respondent violated the moratorium under Section 33(5) of the IBC by canceling the lease deed during the liquidation process. The cancellation of the allotment by RIICO was deemed invalid as it did not comply with the required rules. The tribunal directed the liquidator to pay pending dues to RIICO, who in turn must restore the property to the corporate debtor and facilitate its transfer to the successful bidder. Compliance with Section 32A(2) of the IBC was emphasized, and the applications were disposed of accordingly.

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Issues Involved:
1. Termination of lease deed.
2. Violation of moratorium under Section 33(5) of the Insolvency and Bankruptcy Code (IBC).
3. Validity of the cancellation of allotment by RIICO.
4. Rights and obligations of the liquidator and RIICO under the IBC and RIICO Disposal of Land Rules, 1979.
5. Compliance with Section 32A(2) of the IBC.

Detailed Analysis:

Termination of Lease Deed:
The liquidator argued that the respondent (RIICO) had violated the moratorium by attempting to cancel the lease deed during the liquidation process. The liquidator emphasized that the lease deed was executed on 23.02.1995 and that the corporate debtor (CD) had been running its operations successfully from 1995 to 2003. The respondent, on the other hand, claimed that the allotment was canceled on 7.8.2003 due to violations of the lease deed terms and RIICO Disposal of Land Rules, 1979. The tribunal found that the cancellation order was not signed by the unit head as required by Rule 24(1) of the RIICO Disposal of Land Rules, 1979, making the cancellation invalid.

Violation of Moratorium under Section 33(5) of IBC:
The liquidator contended that the respondent's actions violated the moratorium under Section 33(5) of the IBC, which bars the initiation or continuation of any proceedings against the corporate debtor during the liquidation process. The tribunal agreed, noting that the respondent had proceeded against the CD during the moratorium period, thereby violating Section 33(5) of the IBC.

Validity of the Cancellation of Allotment by RIICO:
The tribunal found that the cancellation of the allotment by RIICO was not valid as it was not signed by the unit head as required by Rule 24(1) of the RIICO Disposal of Land Rules, 1979. Furthermore, RIICO had continuously demanded annual maintenance charges and lease rentals till 2017, indicating that the cancellation was not enforced. The tribunal also noted that RIICO had not taken possession of the plot for the last 18 years and had not allotted it to any third party.

Rights and Obligations of the Liquidator and RIICO:
The tribunal held that the liquidator is obligated to pay all pending dues to RIICO, but RIICO must restore the allotment of the property to the CD once the dues are paid. The tribunal emphasized that the liquidator must follow all RIICO rules and use the plot accordingly. The tribunal directed RIICO to facilitate the transfer of the property to the successful bidder within a reasonable time after payment is made.

Compliance with Section 32A(2) of the IBC:
The tribunal highlighted that Section 32A(2) of the IBC prohibits any action on the property of the CD for old dues after the liquidation order has been passed. The tribunal referenced the Supreme Court's rulings in "Principal Commissioner of Income Tax vs Monnet Ispat and Energy Limited" and "Innovative Industries Limited vs ICICI Bank and Another," which established that the IBC overrides other laws, including tax laws, and that proceedings under any law cannot continue once the moratorium is in effect.

Conclusion:
The tribunal concluded that the liquidator should pay all pending dues to RIICO, and RIICO should restore the allotment of the property to the CD and facilitate its transfer to the successful bidder. Both applications were disposed of accordingly, and the registry was directed to provide copies of the order to the concerned parties. The order was pronounced through video conferencing.

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