Insolvency estate cannot include property held without subsisting leasehold rights after a final eviction decree.

A corporate debtor in CIRP cannot question a landlord's ownership where the lease had expired long ago and the eviction decree had already attained finality, including before the Supreme Court; the debtor's continued occupation did not reopen title issues. An interim status quo order in separate land reforms proceedings between the landlord and the State did not enlarge the debtor's rights or justify possession after expiry of the lease and eviction. With no subsisting leasehold or other enforceable interest, the debtor remained in unauthorised possession, so the property could not be treated as its asset or included in the information memorandum or CIRP. The exclusion request was allowed and later steps concerning the property were ineffective.

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Issues: (i) Whether the ownership of the appellant in the subject property could be questioned in the corporate debtor's insolvency proceedings; (ii) whether the interim status quo order passed in separate land reforms proceedings could be relied upon by the corporate debtor to retain possession; (iii) whether the corporate debtor had any subsisting right in the leased immovable property; (iv) whether the property could be treated as an asset of the corporate debtor and included in the information memorandum and CIRP.

Issue (i): Whether the ownership of the appellant in the subject property could be questioned in the corporate debtor's insolvency proceedings?

Analysis: The lease granted to the corporate debtor had expired long ago, and the eviction decree obtained by the appellant had been affirmed through the appellate hierarchy, including the Supreme Court. Once the landlord-tenant dispute had culminated in a final eviction decree, the corporate debtor could not reopen the appellant's title or ownership in insolvency proceedings. The adjudicating authority's observation that the appellant had failed to produce title documents was held to be erroneous and unnecessary in the face of the concluded eviction litigation.

Conclusion: The appellant's ownership as landlord was accepted, and the corporate debtor was not permitted to question it in the CIRP.

Issue (ii): Whether the interim status quo order passed in separate land reforms proceedings could be relied upon by the corporate debtor to retain possession?

Analysis: The interim injunction was passed in proceedings between the appellant and the State of West Bengal concerning alleged vesting of land. That order was not between the appellant and the corporate debtor, and therefore could not enlarge any right of the corporate debtor or justify its continued possession after expiry of the lease and the eviction decree. The corporate debtor could not derive benefit from an order passed in a different lis to defeat the appellant's rights.

Conclusion: The status quo order did not inure to the benefit of the corporate debtor.

Issue (iii): Whether the corporate debtor had any subsisting right in the leased immovable property?

Analysis: The leasehold interest ended on 31.12.1978. After expiry of the lease and in the teeth of the eviction decree, the corporate debtor remained only in unauthorised possession. A person in unlawful occupation after termination of tenancy cannot claim any continuing proprietary or possessory right. The property therefore could not be treated as one over which the corporate debtor had any subsisting enforceable interest on the date of commencement of CIRP.

Conclusion: The corporate debtor had no subsisting right in the property.

Issue (iv): Whether the property could be treated as an asset of the corporate debtor and included in the information memorandum and CIRP?

Analysis: Under the insolvency code, assets under the control of the resolution process are those in which the corporate debtor has ownership rights or a legally enforceable interest. Property owned by a third party and merely wrongfully occupied by the corporate debtor cannot become an asset of the corporate debtor. Since the corporate debtor had no surviving leasehold or other right, the property could not be included in the information memorandum or dealt with in the resolution process. Actions taken in relation to that property during CIRP were therefore unsustainable.

Conclusion: The property was not an asset of the corporate debtor and was liable to be excluded from CIRP.

Final Conclusion: The impugned order was set aside, the appellant's request for exclusion of the property from CIRP was allowed, and all subsequent steps taken in relation to that property during the insolvency process were declared ineffective.

Ratio Decidendi: Property in the wrongful possession of a corporate debtor after expiry of a lease and a final eviction decree, without any subsisting proprietary or enforceable right, cannot be treated as an asset of the corporate debtor for CIRP purposes.

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