Insolvency proceedings cannot override a final consent decree protecting possession where transferee rights were already recognised.

Insolvency jurisdiction could not be used to dispossess a transferee already in possession where written agreements to sell had been acted upon, consideration was paid, and a civil suit for specific performance ended in a final consent decree recognising possessory rights. The consent decree under Order 23 Rule 3 CPC could not be overridden or treated as appealable by the Adjudicating Authority under the IBC. Section 53A of the Transfer of Property Act supported the transferee's protective possession, and the absence of registered conveyances did not justify summary divestment. Pending proceedings under Section 66 of the IBC could continue separately, but they did not authorise immediate handing over of possession to the Resolution Professional.

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Issues: Whether the Resolution Professional could obtain possession of the Baddi and Nalagarh properties under Sections 18, 23 and 25 of the Insolvency and Bankruptcy Code, 2016 despite an earlier civil court consent decree recognising the Appellant's possessory rights, and whether the pending Section 66 proceedings could justify dispossession.

Analysis: The properties had been the subject of written agreements to sell, the consideration had been paid, and the Appellant had obtained possession before commencement of CIRP. A civil suit for specific performance had culminated in a consent decree under Order 23 Rule 3 of the Code of Civil Procedure, 1908, and the decree had attained finality. The Adjudicating Authority, exercising insolvency jurisdiction, could not override or sit in appeal over a decree passed by a competent civil court. The protective doctrine of part performance under Section 53A of the Transfer of Property Act, 1882 was attracted, and mere non-execution of registered conveyances did not authorise summary divestment of possession under the IBC. The pending Section 66 application could proceed independently, but it did not empower immediate dispossession of the Appellant.

Conclusion: The direction requiring handing over of possession to the Resolution Professional was unsustainable and was set aside.

Final Conclusion: The appeals succeeded, the impugned possession directions were annulled, and status quo regarding possession was directed to continue pending decision of the Section 66 application.

Ratio Decidendi: An Adjudicating Authority under the Insolvency and Bankruptcy Code cannot, in summary insolvency proceedings, divest a transferee in possession where a competent civil court has already recognised the transferee's rights by a final consent decree; such rights may be tested in appropriate proceedings, but not overridden by insolvency jurisdiction.

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