Insolvency possession dispute: unregistered MoU could not defeat recovery of corporate debtor's asset or usage charges.

The NCLAT held that the Adjudicating Authority retained jurisdiction to decide a pending possession dispute after approval of the resolution plan, because the proceeding concerned an asset of the corporate debtor and formed part of the insolvency process. It also held that section 60(5) permitted examination of the MoU and the claimed right to continue occupation. The appellant could not invoke section 53A of the Transfer of Property Act because the MoU was unregistered and not shown to be a valid contract for sale, so no protected part-performance right arose. Vacate-and-handover directions and usage charges were therefore upheld as consequences of unauthorised occupation.

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Issues: (i) Whether the Adjudicating Authority retained jurisdiction to decide the pending application after approval of the resolution plan and substitution of the successful resolution applicant; (ii) Whether the Adjudicating Authority could examine the MoU and the parties' rights under section 60(5) of the Insolvency and Bankruptcy Code, 2016; (iii) Whether the appellant could claim protection under section 53A of the Transfer of Property Act, 1882 on the strength of the MoU and possession of the resort; (iv) Whether the direction to vacate and hand over possession was sustainable; (v) Whether the direction to pay usage charges was sustainable.

Issue (i): Whether the Adjudicating Authority retained jurisdiction to decide the pending application after approval of the resolution plan and substitution of the successful resolution applicant.

Analysis: The application was filed by the resolution professional before approval of the resolution plan and remained pending when the successful resolution applicant was substituted to prosecute it. The dispute concerned assets admittedly belonging to the corporate debtor, and the substitution did not extinguish the pending proceeding. The continuation of the application was therefore treated as part of the insolvency process and not as a fresh or independent dispute beyond the tribunal's authority.

Conclusion: The Adjudicating Authority retained jurisdiction and the application was competent to be decided after approval of the resolution plan.

Issue (ii): Whether the Adjudicating Authority could examine the MoU and the parties' rights under section 60(5) of the Insolvency and Bankruptcy Code, 2016.

Analysis: The application sought control and possession of an asset forming part of the corporate debtor's estate, and the defence was founded on an asserted MoU said to justify continued occupation. Since the controversy arose out of and in relation to the insolvency process, the tribunal was entitled to examine the asserted contractual basis to determine whether the appellant had any legally sustainable right to retain possession.

Conclusion: The Adjudicating Authority had jurisdiction under section 60(5) to examine the MoU and decide the dispute.

Issue (iii): Whether the appellant could claim protection under section 53A of the Transfer of Property Act, 1882 on the strength of the MoU and possession of the resort.

Analysis: The MoU was unregistered and was not shown to be a valid contract for sale. The statutory requirements for the protection of part performance were not met, particularly in view of the compulsory registration requirement for such contracts and the absence of a legally valid transfer arrangement. The appellant's continued possession, even if asserted, did not by itself create enforceable rights under section 53A.

Conclusion: The appellant was not entitled to the protection of section 53A of the Transfer of Property Act, 1882.

Issue (iv): Whether the direction to vacate and hand over possession was sustainable.

Analysis: Once the MoU failed to confer any enforceable possessory right, the appellant's occupation was treated as unauthorised against an asset belonging to the corporate debtor. In those circumstances, the resolution professional was entitled to recover possession for the estate, and the direction to vacate followed as a necessary consequence.

Conclusion: The direction to vacate and hand over possession was sustainable.

Issue (v): Whether the direction to pay usage charges was sustainable.

Analysis: Because the appellant's possession was not backed by any valid contractual or statutory entitlement, occupation of the property was treated as wrongful. In that situation, compensation for use and occupation was justified, and the tribunal was competent to direct determination and payment of fair usage charges.

Conclusion: The direction to pay usage charges was sustainable.

Final Conclusion: The appeal failed in entirety, and the tribunal upheld both recovery of possession and the monetary consequence flowing from unauthorised occupation.

Ratio Decidendi: A tribunal exercising insolvency jurisdiction may adjudicate a possession dispute relating to a corporate debtor's asset when the defence is founded on an asserted contractual right arising out of the insolvency process, but an unregistered MoU that is not a valid contract for sale cannot attract section 53A protection or defeat recovery of possession and consequential usage charges.

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