Lease instrument validity denied where execution by unauthorised signatories and lack of payment evidence precludes CIRP inclusion.

Whether a lease deed can establish leasehold rights for CIRP inclusion was decided by reference to execution authority, proof of consideration, corporate records and pending investigations. The tribunal applied the principle that a registered instrument executed by unauthorised persons and unsupported by reliable evidence of consideration is unenforceable to establish title or leasehold rights in CIRP; contemporaneous balance sheets and conveyance deeds must corroborate transfer; and summary adjudication under IBC is constrained in fraud/forgery matters. Outcome: the lease deed was held unenforceable for confirming the corporate debtor's asset and was excluded from the Information Memorandum.

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Issues: (i) Whether the Lease Deed dated 24.09.2007 can be treated as conferring leasehold rights in the disputed land and therefore included in the Corporate Debtor's Information Memorandum for the purposes of CIRP and plan approval.

Analysis: The Tribunal examined (a) the execution clauses of the Lease Deed identifying authorised signatories and the fact that the Deed was executed by persons who were not shown to be authorised; (b) documentary and account evidence said to demonstrate payment of the upfront consideration and lease rents alleged in the Deed, including bank statements and the absence of debits corresponding to the cheques listed in the Deed; (c) contemporaneous corporate records (Magadh balance sheet and Form-20B) and conveyance deeds showing the timeline of title transfers; and (d) settled law limiting the Adjudicating Authority in IBC/CIRP to summary adjudication with respect to fraud/forgery while retaining jurisdiction to decide whether an asserted asset is the debtor's asset for inclusion in the Information Memorandum. On facts, the Deed itself recorded authorised officers but was executed by other persons; no reliable proof of the alleged Rs.16 crore upfront payment or lease rentals was produced; the Magadh balance sheet and conveyance deeds did not corroborate transfer of lease rights to the Corporate Debtor; and criminal investigation and civil complaints regarding the Deed were on record. Applying the legal framework, the Tribunal held that a registered instrument executed by unauthorised persons and unsupported by evidence of consideration is unenforceable for the purpose of establishing title/leasehold rights in the CIRP; and that inclusion of an asset in the Information Memorandum requires sufficient proof that the asset is the Corporate Debtor's asset, which was lacking here.

Conclusion: Issue decided in favour of Respondent; the Lease Deed dated 24.09.2007 is unenforceable for purposes of establishing leasehold rights of the Corporate Debtor and the disputed land with plant and machinery is not to be included in the Corporate Debtor's Information Memorandum.

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