CIRP control over corporate debtor premises defeats occupation claims based on unregistered arrangements and undisclosed awards
After commencement of CIRP, the resolution professional is entitled to take control and custody of the corporate debtor's hotel premises and seek eviction of occupants claiming through the suspended management or related persons. An unregistered, unstamped MoU and an arbitral award not reflected in the corporate debtor's records, annual reports or financial statements did not create an enforceable right to continue in possession of immovable property; at most, any monetary claim could be pursued in the insolvency process. A person who claimed no independent right could not resist eviction merely because no separate notice was issued.
Issues: (i) whether, after commencement of CIRP, the Resolution Professional could seek eviction of persons occupying the corporate debtor's premises; (ii) whether an unregistered MoU and arbitral award could confer a continuing right to occupy the hotel premises; and (iii) whether the appellant, against whom no separate notice was issued, could resist eviction.
Issue (i): whether, after commencement of CIRP, the Resolution Professional could seek eviction of persons occupying the corporate debtor's premises.
Analysis: The corporate debtor's hotel premises were undisputedly its assets. Once CIRP commenced, the Resolution Professional was required to take control and custody of assets over which the corporate debtor had ownership rights. Persons in possession through the suspended management or their family members could not claim priority over other stakeholders, and any alleged dues could only be pursued through the CIRP claims process.
Conclusion: The Resolution Professional was entitled to seek possession and eviction, and the occupants had no right to continue in possession.
Issue (ii): whether an unregistered MoU and arbitral award could confer a continuing right to occupy the hotel premises.
Analysis: The claimed occupancy right rested on an unregistered and unstamped MoU, coupled with an arbitral award that was not reflected in the corporate debtor's records, annual reports, or financial statements. The arrangement also bore the character of a related party transaction requiring disclosure. Even assuming some monetary claim existed, that would not translate into a right to retain possession of the corporate debtor's immovable property; at best, a claim could be lodged in CIRP.
Conclusion: The MoU and arbitral award did not create any enforceable right of occupation in favour of the appellant.
Issue (iii): whether the appellant, against whom no separate notice was issued, could resist eviction.
Analysis: The eviction prayer expressly covered the suspended director along with family members, friends, relatives and acquaintances occupying the premises. The appellant claimed no independent right and relied only on the same alleged occupancy arrangement rejected in the first issue.
Conclusion: The appellant could not resist eviction on the ground of absence of separate notice.
Final Conclusion: The appeals failed, and the order directing vacation of the premises was sustained, with additional time granted for compliance.
Ratio Decidendi: After commencement of CIRP, occupants cannot retain possession of corporate debtor assets on the basis of an unregistered or undisclosed private arrangement; any monetary claim must be pursued in the insolvency process, not through continued occupation.
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