TaxTMI 
TaxTMI 
2023 (3) TMI 1388
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....nd IA/04(MP)2022 in TP 127/2019 earlier registered as CP(IB) 34/2019. By the impugned order, the Adjudicating Authority disposed of both the applications and holding the application filed by the Liquidator of the Corporate Debtor (the present Appellant) as void also directed not to disturb the possession or interfere with the leasehold right of M/s Indore Steel & Alloys Pvt. Ltd. (present Respondent No.1) and Tin shed on the leasehold land. Aggrieved by this impugned order, the present appeal has been preferred by the Appellant. 2. The brief factual matrix of the case which is necessary to be noticed for deciding this appeal are as follows: - * M/s Patni Carbides Private Limited ("PCPL" in short) had acquired certain piece of industrial land admeasuring 10,219 sq. mtrs. at lndustrial Plot No.36-C/1, lndustrial Area, Sector 3, Pithampur, Dist. Dhar on lease (hereinafter referred to as the "subject land") from Madhya Pradesh Industrial Development Corporation Ltd./Respondent No.6 ("MPIDCL" in short). The Lease Deed was executed on 07.02.1987 for a period of 99 years. * For obtaining the subject leasehold land, PCPL had secured a loan from Madhya Pradesh Financial Corporation ("M....
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.... the reversal of the leasehold rights of the said land along with Tin shed from Respondent No.1 to the Corporate Debtor. * Having heard both the I.A.s stated above, the Adjudicating Authority in the impugned order dated 05.05.2022 issued directions to the Appellant not to disturb the possession or interfere with the title/lease hold rights of Respondent No.1. Aggrieved with the impugned order, the present appeal has been preferred by the Appellant. 3. Making his submissions, the Learned Counsel for the Appellant stated that PCPL had acquired the subject land on lease from MPIDCL on which it had constructed a Tin shed. Having taken a loan from MPFC and having failed to repay the loan, the subject land had been sold in auction by MPFC to the Corporate Debtor on payment of consideration amount of Rs.60,01,001/- only and a sale deed was executed to this effect on 23.02.2010. It was claimed that the Corporate Debtor had thus become owner of the subject leasehold land including all structures standing on it. While admitting that the said sale deed provided for registration of the subject land with the competent authority within six months and that the Corporate Debtor had not complied....
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.... lease. 7. The Learned Counsel for the Respondent No. 1 refuting the submissions of the Appellant contended that ISAPL had lawfully acquired leasehold rights over the said land in accordance with the MP Rules, 2019 and that it had paid full consideration amount for the same to MPIDCL besides having separately paid the consideration amount for the Tin shed to PTL. It has also been contended that reference made by the Appellant to a chain of documents is unfounded as the transfer of leasehold rights was done directly between MPIDCL and ISAPL, for which purpose, lease deed with MPIDCL was executed by ISAPL under the provisions of the MP Rules, 2019. It was further added that under Rules 19 (B) and 19 (C) (iii) of MP Rules, 2019 since the Corporate Debtor had not taken any action within the stipulated time period to execute the lease deed for transfer of rights and hence the rights acquired by the Corporate Debtor over the said land had automatically lapsed. Thus, the subject land was in the possession of MPIDCL being the owner of the subject land and hence the subsequent acquiring of leasehold rights by Respondent No. 1 from MPIDCL was a bona fide transaction. Hence the transaction d....
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....and allot the subject land to other applicants. Cognizance has also been taken by the Adjudicating Authority of MP Rules, 2019 providing for automatic cancellation of the lease if the purchaser after purchase of the land fails to get the lease executed in its favor. Holding further that the transaction carried out by the Corporate Debtor with MPIDCL having become void on account of non-payment of dues and nonregistration of lease deed, it has also been observed that Respondent No. 1/ISAPL secured the leasehold ownership and possession over the subject land directly from MPIDCL having executed a registered sale deed after payment of full consideration and clearing all pending dues through banking channels. The Adjudicating Authority has held that ISAPL has thus legally and validly acquired leasehold ownership rights and possession over the subject land directly from the MPIDCL and not from the corporate debtor. Holding that ISAPL is the perpetual lessee of the subject land, the impugned order also notes that this transaction between ISAPL and MPIDCL does not fall within the purview of Sections 43, 49, and 66 of the IBC. 13. For a holistic appreciation of the matter before us, it ma....
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....ne year, or reserving a yearly rent;" The Transfer of Property Act, 1882 "107. Leases how made. - A lease of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Where a lease of immoveable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee: Provided that the State Government may, from time to time, by notification in the Official Gazette, direct that leases of immoveable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession." 14. It is the case of the Appellant that Rule 19(C)(iii) of MP Rules, 2019 only deals with the automatic cancellation of transfer permission and not the lease deed. It has been argued that if the successfu....
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....-registration of lease deed. 16. We also note from Annexure-I placed in reply affidavit of Respondent No.6 that the Corporate Debtor had only deposited transfer charges of Rs.10,59,817/-, while the MPIDCL had given them a demand letter on 15.06.2011 for the balance payment of Rs.20,49,216/- for effecting the transfer of lease hold rights. The Corporate Debtor instead of paying the outstanding consideration amount had chosen to file a writ petition before the Hon'ble High Court of Madhya Pradesh disputing the said amount. The payment of outstanding dues not having been done within the given time, the limited rights of the corporate debtor over the subject land stood extinguished by efflux of time. When the terms of the lease deed were violated by the Corporate Debtor, the MPIDCL had full jurisdiction and authority to consider and accept any proposal of executing a sale deed with another applicant as per MP Rules, 2019. We therefore do not find any infirmity in the decision of the Adjudicating Authority that the transaction carried out by the Corporate Debtor with MPIDCL with respect to the subject land became void on account of non-payment of dues. 17. It is the case of the Appell....
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.... 1 on their own and as such there being no requirement of any such letter from PTL, it was asserted that the contention of the Appellant is misplaced. We are inclined to agree with the contention of the Respondents that the transaction between ISAPL and PTL related to purchase of Tin shed while the transaction between ISAPL and MPIDCL was for lease rights over the subject land and that both transactions were separate and not connected. 20. It has also been contended by the Respondents that the fact that the corporate debtor did not acquire ownership rights over the said land is substantiated by the fact that the lease deed entered into between Respondent No.1/ISAPL and MPIDCL was an amendment of the original lease deed of PCPL dated 07.02.1987 for the remaining lease period. This clearly shows that MPIDCL had never executed any lease deed in favour of the corporate debtor or else it would have had to modify or amend the lease deed signed with them and not with PCPL while transferring the leasehold rights for the remaining period to Respondent No.1. We are thus satisfied with the findings of the Adjudicating Authority that ISAPL had legally and validly acquired leasehold ownership ....