Subsisting leasehold rights in tea gardens are insolvency assets; renewal is not automatic, and moratorium protects valid leases.

Subsisting leasehold rights in tea gardens are treated as assets of the corporate debtor under insolvency law and may be taken into control by the resolution professional if they remain alive on the insolvency commencement date. Mere pendency of renewal applications does not create automatic or deemed renewal, and an expired lease cannot be treated as continuing without valid renewal. Renewals of the Kilcott, Garganda and Bagracote Division I tea estates were validly executed and registered, and non-payment of salami did not make them void or inoperative. Moratorium protection extends to subsisting leasehold rights, but not to gardens where no surviving leasehold interest remained.

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Issues: (i) Whether subsisting leasehold rights in tea gardens constitute assets of the corporate debtor that the resolution professional is bound to take control of under the insolvency law; (ii) whether expiry of the lease before commencement of the insolvency process can be ignored on the basis of pending renewal applications and whether renewal is automatic; (iii) whether the renewals of the Kilcott, Garganda and Bagracote Division I tea estates are valid and whether non-payment of salami invalidates those renewals; (iv) whether the resolution professional was entitled to possession of the tea gardens and whether taking possession after commencement of the insolvency process violated moratorium.

Issue (i): Whether subsisting leasehold rights in tea gardens constitute assets of the corporate debtor that the resolution professional is bound to take control of under the insolvency law.

Analysis: The relevant statutory scheme treats property and assets broadly, and leasehold interests are capable of being treated as assets when they are subsisting on the insolvency commencement date. The duty to take control extends to assets and business records of the corporate debtor, and leasehold rights are not excluded merely because the underlying land belongs to the State. The decisive inquiry is whether the leasehold interest was alive when the insolvency process began.

Conclusion: Subsisting leasehold rights in the tea gardens are assets of the corporate debtor and are capable of being taken into control by the resolution professional.

Issue (ii): Whether expiry of the lease before commencement of the insolvency process can be ignored on the basis of pending renewal applications and whether renewal is automatic.

Analysis: Renewal under the lease deeds and the governing West Bengal acquisition regime required compliance with the stipulated terms and conditions. A renewal application by itself did not amount to renewal, and there was no concept of automatic or deemed renewal merely because the State had not communicated a decision. Where the original term had expired and no valid renewal had come into existence, the corporate debtor could not claim a continuing right on that basis alone.

Conclusion: There was no automatic or deemed renewal of the expired leases merely because renewal applications were pending.

Issue (iii): Whether the renewals of the Kilcott, Garganda and Bagracote Division I tea estates are valid and whether non-payment of salami invalidates those renewals.

Analysis: The renewed lease deeds for the three tea estates were executed and registered by the competent authority, and the record did not show cancellation of those renewals. Although the State later demanded salami under the amended acquisition rules, the demand did not render the already executed renewals void or inoperative. The renewals were therefore to be treated as valid and subsisting on the insolvency commencement date.

Conclusion: The renewals of Kilcott, Garganda and Bagracote Division I were valid, and non-payment of salami did not make them void or inoperative.

Issue (iv): Whether the resolution professional was entitled to possession of the tea gardens and whether taking possession after commencement of the insolvency process violated moratorium.

Analysis: In respect of the tea gardens where the lease had expired without valid renewal, the corporate debtor had no subsisting right and possession already with third parties could not be recovered. In respect of Kilcott and Bagracote Division I, the corporate debtor had subsisting leasehold rights on the insolvency commencement date, and taking possession after that date was inconsistent with the moratorium. Garganda, having a valid renewal, also remained within the corporate debtor's asset pool. The orders below could not be mechanically sustained insofar as they ignored these subsisting rights.

Conclusion: The resolution professional was entitled to possession of Garganda, Kilcott and Bagracote Division I, while the rejection of relief for the other tea gardens was upheld.

Final Conclusion: The appeals were disposed of by preserving the rejection in respect of tea gardens where no subsisting leasehold right survived, while recognizing the corporate debtor's subsisting rights in Garganda, Kilcott and Bagracote Division I and directing that their operation remain under the resolution professional's supervision during the insolvency process.

Ratio Decidendi: Subsisting leasehold rights of a corporate debtor are assets within the insolvency framework, renewal is not automatic unless validly completed in accordance with the governing lease and statutory conditions, and moratorium protects such subsisting rights from post-commencement interference or dispossession.

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