Appellant's Claim Dismissed Due to Notice Issue & Leasehold Land Included in Liquidation Estate

The Tribunal dismissed the appellant's claim of Rs. 7,33,372 under Section 42 of the Insolvency and Bankruptcy Code, 2016, as the appellant failed to serve the required notice period before submitting the claim. Additionally, the Tribunal upheld the validity of the auction process and the inclusion of leasehold land in the liquidation estate under Section 60(5)(c) of the Code, stating that leasehold rights are intangible assets that can be part of the assets for e-auction as a "Going Concern."

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Issues Involved:
1. Acceptance of the appellant's claim of Rs. 7,33,372/- under Section 42 of the Insolvency and Bankruptcy Code, 2016.
2. Validity of the auction process and inclusion of leasehold land in the liquidation estate under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016.

Issue-wise Detailed Analysis:

1. Acceptance of the appellant's claim of Rs. 7,33,372/-:

The appellant, who served as Chief Financial Officer and later Chief Operating and Financial Officer of the Corporate Debtor, filed an appeal under Section 42 of the Insolvency and Bankruptcy Code, 2016, against the Liquidator of James Hotel, requesting the acceptance of his claim of Rs. 7,33,372/-. The appellant had failed to submit the claim within the stipulated time and later submitted it on 28.01.2019, which was rejected by the liquidator for being late. The appellant's earlier application under Section 42 was disposed of with a direction to the liquidator to reconsider the claim, which led to a partial rejection of Rs. 2,97,149/-.

The appellant argued that his resignation was not accepted by the respondent, and thus, the claim should be accepted in full. However, the respondent contended that the appellant did not serve the required notice period and had stopped coming to the company. The Tribunal noted that the appellant's appointment letter required a two-month notice or one month's salary in lieu of notice. The Tribunal held that the respondent rightly rejected the claim of Rs. 2,97,149/- as the appellant did not serve the notice period. Consequently, the application was dismissed.

2. Validity of the auction process and inclusion of leasehold land in the liquidation estate:

The applications under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016, were filed by the erstwhile promoter of James Hotel Limited, challenging the auction process and the inclusion of leasehold land in the liquidation estate. The applicant argued that the land owned by Chandigarh Administration could not be transferred without prior consent and that the leasehold land should not form part of the liquidation estate as per Sections 36(3) and 36(4) of the Code.

The respondent-liquidator contended that the leasehold property was part of the liquidation estate and could be auctioned. The Tribunal noted that the leasehold land was allotted through an auction process and had provisions for transfer to a third party. The Tribunal referred to various judgments, including the Hon'ble NCLAT's decision in "New Okhla Industrial Development Authority Vs. Mr. Amit Agarwal Liquidator of Boulevard Projects Pvt. Ltd.," which held that leasehold rights are intangible assets of the Corporate Debtor and can be included in the liquidation estate.

The Tribunal concluded that the leasehold rights over the land are intangible assets within the meaning of Section 36(3)(d) of the Code and can be part of the assets for e-auction as a "Going Concern." The Tribunal dismissed the applications, upholding the validity of the auction process and the inclusion of leasehold land in the liquidation estate.

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