Insolvency Code jurisdiction cannot be used to evict protected tenants where rent law governs the tenancy dispute.

Section 60(5) of the Insolvency and Bankruptcy Code cannot be used to direct eviction where the dispute is a continuing tenancy governed by rent-control law and has no real nexus with insolvency resolution. The tenancy was supported by a civil court decree recognising the occupants as monthly tenants and protecting them from dispossession except in accordance with law. Because the corporate debtor had purchased the property subject to that tenancy, and eviction was being pursued through a pending landlord-tenant suit, the appropriate forum and procedure remained the rent law mechanism. The Code may authorise custody and preservation of assets, but it does not override statutory tenancy protection or permit conversion of an eviction dispute into an insolvency proceeding.

---

---

Issues: Whether the Adjudicating Authority could, in exercise of jurisdiction under the Insolvency and Bankruptcy Code, direct eviction of occupants claiming statutory tenancy protection under the Maharashtra Rent Control Act, 1999, and whether the resolution professional was required to pursue the pending eviction suit instead of seeking repossession under section 60(5) of the Code.

Analysis: The tenancy of the appellants was supported by a civil court decree declaring their predecessor a monthly tenant and restraining dispossession except in accordance with law. The property had been purchased by the corporate debtor subject to the existing tenancy, and the pending eviction suit filed by the corporate debtor showed that eviction was being pursued on landlord-tenant principles, not on any insolvency-specific cause. The Code empowers the resolution professional to take custody and preserve assets of the corporate debtor, but those powers do not authorise short-circuiting a tenant's statutory protection or converting a tenancy dispute into an insolvency dispute. Section 60(5) can be invoked only for disputes having a real nexus with the insolvency resolution process, and it cannot be used to bypass the forum and procedure prescribed for eviction under the rent law. The Tribunal also erred in treating the arrangement as a lease rather than a continuing tenancy.

Conclusion: The eviction direction under the Code was unsustainable, and the appellants were entitled to protection of their tenancy rights and eviction only in accordance with the rent law.

Final Conclusion: The impugned order was set aside and the appeal succeeded, leaving the tenancy dispute to be dealt with under the appropriate legal framework.

Ratio Decidendi: Section 60(5) of the Insolvency and Bankruptcy Code, 2016 cannot be used to order eviction where the dispute is a continuing tenancy matter governed by rent-control law and lacks the requisite nexus with insolvency resolution.

---