Land ownership confirmed for Applicants, release ordered from Corporate Debtor. Section 14(1)(d) not applicable.

The Tribunal ruled in favor of the Applicants, confirming their ownership of the subject land and directing its release from the Corporate Debtor. It held that the Corporate Debtor could not invoke Section 14(1)(d) of the Insolvency and Bankruptcy Code to retain the land due to wrongful possession. The Tribunal determined that APIICL was not a necessary party to the application, as its rights were not affected by the High Court's final order. The Resolution Professional was instructed to hand over the land to the Applicants within two weeks, with the option to seek equivalent land or compensation from APIICL.

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Issues Involved:

1. Whether the Corporate Debtor is entitled to stall the recovery of the subject land by the Applicants under Section 14(1)(d) of the Insolvency and Bankruptcy Code (I&B Code).
2. Whether APIICL is a necessary party to the present application, and if the application is bad in law for non-joinder of APIICL.

Issue-wise Detailed Analysis:

1. Entitlement of Corporate Debtor to Stall Recovery of Subject Land:

The Applicants sought the release of 40.23 acres of land mistakenly allotted to the Corporate Debtor by APIICL. The Andhra Pradesh High Court had already ruled in favor of the Applicants, confirming their ownership and directing the release of the land. The Corporate Debtor, undergoing Corporate Insolvency Resolution Process (CIRP), claimed protection under Section 14(1)(d) of the I&B Code, which imposes a moratorium on the transfer or disposal of assets during the CIRP period.

The Tribunal noted that the High Court's order was final and unchallenged, affirming the Applicants' ownership. The Tribunal emphasized that Section 14(1)(d) applies only to lawful possession. As the Corporate Debtor's possession was wrongful, the moratorium did not apply. The Tribunal cited the Supreme Court's ruling in M/s. Embassy Property Developments Pvt. Ltd. vs. State of Karnataka, stating that the right under Section 14(1)(d) does not extend to wrongful possession. Thus, the Corporate Debtor could not invoke Section 14(1)(d) to retain the land.

2. Necessity of APIICL as a Party:

The Corporate Debtor argued that APIICL should be a party to the application, as it was responsible for the mistaken allotment. The Applicants contended that the High Court's order was final, and APIICL's involvement was unnecessary for compliance.

The Tribunal referred to the Supreme Court's ruling in Amit Kumar Shaw And Another vs. Farida Khatoon And Another, which held that a party's addition depends on whether their rights may be affected. Since APIICL had already accepted the High Court's order and agreed to release the land, its rights were not in question. Therefore, APIICL was not a necessary party, and the application was not bad in law for non-joinder.

Conclusion:

The Tribunal directed the Resolution Professional to hand over the 40.23 acres of land to the Applicants within two weeks and allowed the Resolution Professional to seek equivalent land or compensation from APIICL. The petition was allowed with no costs.

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