TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Municipal Corporation's termination of Development Agreement upheld as housing company subsidiary lacked valid possession rights under Section 14(1)(d)</h1> <h3>Kolkata Municipal Corporation Versus Bengal Shelter Housing Development Ltd. & Ors.</h3> Kolkata Municipal Corporation Versus Bengal Shelter Housing Development Ltd. & Ors. - TMI Issues Involved:1. Validity of the termination of the Development Agreement by Kolkata Municipal Corporation.2. Possession rights and obligations under the Development Agreement.3. Applicability of Section 14 of the Insolvency and Bankruptcy Code (IBC) regarding moratorium and possession.Summary:1. Validity of the Termination of the Development Agreement:The Kolkata Municipal Corporation (KMC) terminated the Development Agreement with Bengal Shelter Housing Development Limited (Respondent No.1) on 17.01.2022 due to breach of contract. The termination was challenged by the Resolution Applicant (Respondent No.3) but not by Respondent No.1. The tribunal found that the termination was lawful and in accordance with the Development Agreement, which prohibited assignment of rights without prior approval from KMC. The assignment to Respondent No.2 (Corporate Debtor) was unauthorized and void.2. Possession Rights and Obligations:The Development Agreement stipulated that KMC would remain the owner of the premises and structures, and Respondent No.1 was only given development rights. The tribunal held that Respondent No.2 was in unlawful possession of the premises as the assignment was without KMC's consent. The tribunal concluded that Respondent No.1 had no right to assign the development rights to Respondent No.2, making the possession by Respondent No.2 illegal.3. Applicability of Section 14 of the IBC:The tribunal examined whether the moratorium under Section 14 of the IBC, which prohibits recovery of property occupied by the Corporate Debtor, applied. It found that the premises were owned by KMC and not the Corporate Debtor, thus Section 14(1)(d) did not protect the possession of the Corporate Debtor. The tribunal emphasized that the assets in question were not part of the Corporate Debtor's assets and hence not subject to the moratorium.Conclusion:The tribunal set aside the Adjudicating Authority's order dated 17.11.2022, which had annulled KMC's termination of the Development Agreement. It was concluded that the termination was lawful, and the Corporate Debtor had no right to the premises. The appeal by KMC was allowed, and the IA filed by Respondent No.3 was rejected.
TaxTMI 