TaxTMI 
TaxTMI 
2024 (1) TMI 1323
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....he CIRP of the Corporate Debtor the 'Subject Property', being divided and demarcated portion of land admeasuring 3.5 acres out of the total land admeasuring 8 acres being Premises No.CBE/2 in Street No.MAR situated within Mouza Jatragaachi in New Town within Police Station Rajarhat in the District 24 Parganas (North) comprising of Westin Hotel ('Subject Property") from the CIRP of the CD; b) Set aside the invitation of expression of interest dated 28th April, 2022 issued by the RP for alleged deliberate concealment of facts; c) Direct the RP to consider the Claim of SIDCL for INR 909 Crores as a 'qualified claim'. 3. Brief Background: 3.1 Sarga Hotel Private Limited ("CD") owns a five-star hotel under the name of The Westin Kolkata Rajarhat at New Town, Kolkata ("Westin Hotel") which it claims as its sole asset and business. The applicant, SIDCL here, is the promoter/shareholder of the Corporate Debtor viz Sarga Hotel Private Limited (SHPL in short). The Hotel(Westin) is built on a divided and demarcated portion of land admeasuring 3.5 acres (out of the total land admeasuring 8 acres) owned by SIDCL ("Underlying Land"). 3.2 For purpose of its ....
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....in terms of some Framework Agreement whose very existence has not been proved by SIDCL. 5.2 At the request of the RP vide an e-mail dated 07.06.2022, SIDCL has only provided a scanned copy of the alleged Framework Agreement over email to the Company Secretary ("CS") of CD. 5.3 SIDCL has not produced the original of the alleged Framework Agreement. SIDCL has, thus, failed to prove the very existence of the alleged Framework Agreement. The copy of the alleged Framework Agreement will show that it is neither properly stamped nor registered. 5.4 The CS has failed to specifically certify the authenticity of the annexures to the Application including the alleged Framework Agreement. 5.5 That such alleged unregistered Framework Agreement which in effect limits/extinguishes the leasehold rights granted to the CD over the Underlying Land cannot be given affect to or taken as evidence. 5.6 That any document that purports or operates to create/limit/extinguish any right, title or interest, in immovable property is compulsorily registrable under Section 17 of the Registration Act, 1908 ("Registration Act"). Thus, any unregistered agreement which is ....
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.... be included by RP in the IM and RP is duty bound under Section 25(2) (a) to take custody and control of the same." 5.10 Under section 105 of the TPA, a lease of immovable property is defined as a transfer of a right to enjoy the property. It is settled issue that lease creates an 'interest' in the demised property which cannot be extinguished by any Sham document. 5.11 It is contended that this Adjudicating Authority, therefore, may not get into the question of what type of asset a leasehold interest is as it is not relevant for the present application where SIDCL has prayed for excluding the Subject Property from CIRP of the Corporate Debtor. 5.12 The Corporate Debtor is not claiming ownership of Subject Property (i.e., Underlying Land) but has only claimed leasehold rights in the Subject Property. These (leasehold rights) are valuable rights' and necessarily form part of the CIRP of the Corporate Debtor. Reliance is once again placed on Victory Iron Works Ltd v. Jitendra Lohia & Anr, 2023 SCC. 5.13 Further reference is made of in NOIDA case where Hon'ble NCLAT in Para-20 holds that the 'Leasehold Rights' is an 'Asset' under 'Intangible Assets'....
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.... 6.3 It would be evident that both the parties to the Framework Agreement have acknowledged its execution, and have not denied its existence. As such, existence of such Framework Agreement could not be doubted only for the reason it has not been mentioned in the Registered Lease Deed or Deed of Extension and Modification. 6.4 That Execution of an Agreement in counterparts is purely a prerogative of the parties thereto and no adverse inference can be drawn against the parties as done by the RP. Our attention is drawn to Clause 13 of Framework Agreement as extracted below: "13. COUNTERPARTS This agreement may be executed in any number of counterparts, each of which when executed shall constitute a duplicate original, but all the counterparts together constitute the one agreement." 6.5 Drawing attention to the above, it was argued that use of the words "may be executed" clearly demonstrates that understanding between the parties that only one original copy was made. The Applicant derives substantive rights under the same Framework Agreement. 6.6 It is alleged that the RP has lost sight of the fact that, not only the Westin Hotel bu....
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....Framework Agreement and implication whereof is allayed and alluded, is as under: "C. Pursuant to the understanding contained in this Agreement) SIDCL has agreed to grant a lease to SHL of the divided and demarcated portion of land containing an area of 3.5 Acres equivalent to 14163.80 square metres ("Leased Land") out of the Total Land, more fully described in the Schedule 11 written hereunder for a period of 50 (fifty) years and execute a Deed of Lease to be registered with the concerned sub-registrar ("Lease Deed") in favour of SHL which shall inter alia provide the lease rent (at a concessional rate), security deposit and other terms and conditions of the lease of the Leased Land. D. The Parties now intend to record their understanding in relation to the Leased Land and the rights of the Parties inter se as provided in this Agreement, whereby, the lease under the Lease Deed shall be subject to the terms and conditions of this Agreement." Xxx xxx xxx xxx The Parties agree that, SHL is allowed to hold the Lease Land and construct, maintain and carry on with the hotel business only as Affiliate and/or Subsidiary of SIDCL The benefit of the Lease ....
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....ed; (b) Any deposit including security deposit, if agreed under the Lease Deed and paid to SIDCL by SHL shall be forfeited and adjusted against the concession provided in lease rent as may be agreed in the Lease Deed between SIDCL and SHL for the lapsed period during which the leasehold rights will be enjoyed by SHL. 4. RENEWAL OF LEASE 4.1 Notwithstanding the consequences provided in Clause 3.2, SIDCL, at its sole discretion and subject to the fulfilment of the following obligations, allow SHL to continue to enjoy the rights and interest under the Lease Deed: (a) payment of an amount aggregating to Rs. 150,00,00,000/- (Rupees One Hundred Fifty Crores only) as lease premium ("Renewal Premium"); and (b) on such renewal, the lease rent payable for the Leased Land shall not be less than Rs. 20,00,000/- (Rupees Twenty Lakhs only) payable per month. 4.2 Notwithstanding the rights of SIDCL contained in Clause 4.1 above, SIDCL shall at its own discretion may re-negotiate the lease terms for the period of the lease as will be provided under the Lease Deed. 9.2 Juxtaposed to the above, the parties within two days, executed a Lea....
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....HEREBY EXPRESSLY AGREED as follows:- i) In case of Acquisition by any authority under the Land Acquisation Act or any other law of the time being in force the Lessee hereby granted shall stand determined." 9.3 Thus as evident from above, irrefutably and evidently the registered lease deed did not have a formal termination Clause. Probably for that reason the parties were forced to enter into a Modification Agreement on 12.09.2008 which has the following recital: "xii) The following clause shall be added to the Lease Deed as Clause6: "The Lessor shall not have the right to terminate this Deed of Lease except for non payment of rent. In such a case the Lessor shall be liable to give 45 days prior written notice to the Lessee to cure the above mentioned defect before terminating the lease and shall be entitled to terminate the Lease Deed if such default is not cured within the aforesaid 45 days period"." 9.4 We are mindful of the proposition that if an agreement between parties shows an intention to create an interest in the property in favour of the grantee what results is said to be a lease [AIR 1993 Bom 177]. 10. Lease of immovable pr....
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.... 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." The intention of the legislature is thus explicit that lease of immovable property for a period of more than one year should be made by a Registered Deed. 10.4 Further it is noted that Section 111 of the TPA envisages provisions on determination of lease of immovable property. It reads as under: "Determination of lease" as a lease of immoveable property determines - (a) by efflux of the time limited there by; (b) where such time is limited conditionally on the happening of some event-by the happening of such event; (c) where the interest of the lessor in the property terminates on, or his po....
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....lause there in. Had the intention of the parties to the Frame Work Agreement been to terminate the lease in terms of Framework Agreement, the said termination Clause as in Framework Agreement ought to have found a mention in the modification agreement. Hence the Framework Agreement cannot be looked into to determine the lease. 10.5.4 This assertion draws more strength from the fact that the existence of Framework Agreement finds no mention in any of the subsequent agreements entered into between the parties. 11. It is further discernible that Section 48 of the Registration Act prescribes the following: "48.Registered documents relating to property when to take effect against oral agreements-All non-testamentary documents duly registered under this Act, and relating to any property, whether movable or immovable, shall take effect against any order agreement or declaration relating to such property, unless where the agreement or declaration has been accompanied or followed by delivery of possession [and the same constitutes a valid transfer under any law for the time being in force: Provided that a mortgage as defined in section 58 of the Transf....
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....immovable property comprised therein, if such document is required to be registered under any provision, and Section 17 of the Registration Act mandates that leases of immovable property for any term existing one year is to be compulsorily registered. 12.2 A conjoint reading of Section 17, 1 (b) and 1 (d), read with Section 49 of the Registration Act will demonstrate and exemplify that the effect of non- registration of document required to be registered would be that it can be received as an evidence of a contract in a suit for specific performance under chapter 2 of the specific relief as or as an evidence or as evidence of any collateral transaction not required to be effected by registered instrument, and not otherwise. Thus here also the precedence of a Registered document is specifically noted. 12.3 Thus, indubitably and undoubtedly a document compulsorily registrable, if not registered, cannot be looked into in proof of any term evidenced any such document but it may be taken into consideration for collateral purposes. It may not be admissible in evidence and as such this Tribunal cannot rely upon the Framework Agreement to ascertain the power of the SIDCL ....
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....unstamped receipt and such receipt, if (b) where any person from whom a stamped receipt could have been demanded, has given an unstamped receipt and such receipt, if stamped, would be admissible in evidence against him, then such receipt shall be admitted in evidence against him, then such receipt shall be admitted in evidence against him on payment of a penalty of one rupee by the person tendering it; (c) where a contract or agreement of any kind is effected by correspondence consisting of two or more letters and any one of the letters bears the proper stamp, the contract or agreement shall be deemed to be duly stamped: (d) nothing here in contained shall prevent the admission of any instrument in evidence in any proceeding in a Criminal Court, other than a proceeding under Chapter XII or Chapter XXXVI of the Code of Criminal Procedure, 1898 (5 of 1898); (e) nothing herein contained shall prevent the admission of any instrument in any Court when such instrument has been executed by or on behalf of the Government]] or where it bears the certificate of the Collector as provided by section 32 or any other provision of this Act. 13.2 Sectio....