CIRP possession rights: unregistered profit-sharing agreements do not protect occupation of corporate debtor premises.

In CIRP, a resolution professional may seek recovery of the corporate debtor's premises from an occupant who cannot show a valid lease, licence or other legally cognisable right. Unregistered and unstamped profit-sharing agreements did not create any interest or occupancy right in the hotel premises, especially where no supporting consideration appeared in the corporate debtor's books or bank records and the documents surfaced only after the eviction request. The appellate tribunal held that the application for vacation and handover of possession was maintainable and the eviction order was upheld.

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Issues: Whether the appellant could retain possession of the corporate debtor's hotel premises on the basis of unregistered profit-sharing agreements after commencement of CIRP, and whether the resolution professional was entitled to seek eviction and repossession before the Adjudicating Authority.

Analysis: The appellant's claim to occupy the salon, shops and rooms was founded on profit-sharing agreements, but those agreements were neither lease nor licence deeds and did not create any interest or occupancy right in immovable property. The Court noted that no consideration under those agreements was reflected in the corporate debtor's books or bank statements, the documents were unregistered and unstamped, and they surfaced only after the eviction application was filed. Once CIRP commenced, the resolution professional was obliged under the Insolvency and Bankruptcy Code, 2016 to take custody and control of the corporate debtor's assets and could move the Adjudicating Authority for recovery of premises in unauthorised occupation. The authorities relied on by the appellant were distinguished as involving subsisting lease or other legally protected possession rights, which were absent here.

Conclusion: The appellant had no legally enforceable right to continue in occupation of the corporate debtor's premises, and the application seeking vacation and handover of possession was maintainable and rightly allowed.

Final Conclusion: The impugned eviction order was upheld, and the appeal failed.

Ratio Decidendi: In CIRP, a resolution professional may recover possession of the corporate debtor's assets from an occupant who cannot show a valid lease, licence or other legally cognisable right; an unregistered profit-sharing arrangement does not confer occupancy rights in immovable property.

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