TaxTMI 
TaxTMI 
2026 (1) TMI 428
X X X X Extracts X X X X
X X X X Extracts X X X X
....94 of 2022 in C.P. (IB) No. 59 of 2019. By the common impugned order, the Adjudicating Authority allowed both I.A.s filed by the Liquidator and directed the Appellants to handover possession of the leased/licensed premises to the Liquidator and make payment of rental/licence fees dues. Aggrieved by the impugned order, the present appeals have been preferred by the Appellants. 2. Coming to the relevant factual matrix for consideration of the present matter at hand, it is relevant to notice that the Corporate Debtor-M/s Doshion Pvt. Ltd. prior to being admitted into the rigours of Corporate Insolvency Resolution Process ('CIRP' in short), it had executed an unregistered lease deed on 29.09.2020 in favour of one of its subsidiary-Fivebro Water Services Pvt. Ltd. (hereinafter referred to as "Fivebro") in respect of its Ahmedabad premises for a period of two years. The Corporate Debtor had also executed another license agreement on 20.07.2021 in favour of another of its subsidiary-Gondwana Engineers for a term of five years in respect of its Mumbai premises. The Corporate Debtor was subsequently admitted into CIRP on 31.08.2021 and moratorium was declared under Section 14 of the IBC.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....isdiction of the Civil Court or any forum as provided under the lease deed/license agreement. Thus, when disputes arising out of the present lease and license agreements were triable by the Civil Court and not by the Adjudicating Authority, the impugned order passed by the Adjudicating Authority suffered from jurisdictional errors. It was submitted that when the lease and license agreements expressly contained arbitration clauses, the disputes between themselves were required to be arbitrated and not adjudicated by the Adjudicating Authority. The Appellants in the present case were in occupation of the subject premises at Ahmedabad and Mumbai under valid subsisting agreements, these agreements could not have been disregarded by the Adjudicating Authority to wrongfully initiate coercive action of eviction. Submitting that Section 60(5) of the IBC cannot be invoked to circumvent ordinary civil remedies, it was pressed that the Adjudicating Authority could not have decided on the alleged breach of the lease deed/license agreement to direct eviction of the Appellants from the Ahmedabad and Mumbai premises. It was also contended that determination of non-payment of lease rent and licens....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to meet the requirements of registration mandated by the provisions of the Maharashtra Rent Control Act. It is further contended that the contention of the Appellants that they had not breached the lease and license agreements is also misplaced since the Appellants had themselves agitated this issue before the Gujarat High Court which in its order dated 26.06.2024 in SCA No. 9402 of 2024 had found that rental dues were payable to the Liquidator and clearly directed the Appellants to pay the rental arrears and license fees dues as well as municipal and AMC dues. This clearly evidences that both the Appellants had breached the terms of lease and license agreement. Adding further that the attempts by the Liquidator to take possession of the subject property of the Corporate Debtor on 15.10.2025 being foiled on the frivolous ground of non-availability of the suspended management of the Corporate Debtor shows the dishonest motive on part of the suspended management trying to siphon off the subject property of Corporate Debtor. The Appellants being the subsidiaries of the Corporate Debtor, they were hands in glove to keep the subject property out of the reach of the Liquidator. It was e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....estion of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code. 9. We also notice that the Adjudicating Authority has held that there is no dispute that the Ahmedabad and Mumbai premises belonged to the Corporate Debtor which had been admitted into the rigours of CIRP. Since the Corporate Debtor was presently undergoing liquidation, it was held by the Adjudicating Authority that the Liquidator was statutorily empowered under Section 35 of the IBC to take custody and control of the said premises and recover the outstanding rent from those in possession of the said premises which unambiguously belonged to the Corporate Debtor. At this juncture, we may take note of the relevant provisions of Section 35 of the IBC which confers jurisdiction upon the Liquidator to take charge of the assets of the Corporate Debtor including recovery of actionable claims like rent, maintenance dues and file application before the Adjudicating Authority as necessary for progressing the liquidation which reads to the effect: Section 35: Powers and duties of liq....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n could not have been disturbed. The Adjudicating Authority could not have ordered their eviction and recovery of possession. 11. Coming to the Ahmedabad premises, which is the subject matter of IA 63 of 2022, it is the contention of the Appellant-Fivebro that it is an uncontested fact that an unregistered lease agreement dated 29.09.2020 in respect of the Ahmedabad premises was already in place by virtue of which they were occupying the said premises. However, since this lease agreement of September 2020 was unregistered, with a view to cure this defect, they chose to execute a fresh registered lease agreement with the Corporate Debtor on 31.08.2021 for a tenure of 10 years effective from 01.09.2021. Hence, the intention behind execution of the new lease agreement was bonafide as it sought to remove the lacuna in the earlier lease agreement for being an unregistered document. 12. Per contra, it is the case of the Liquidator that the new lease agreement of 31.08.2021 in respect of the Ahmedabad premises of the Corporate Debtor was executed after the moratorium had come into place. This was clearly not permissible under Section 14(1)(b) of the IBC and was so done with the sini....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rm of the existing lease agreement still remained unexpired. The explanation offered by the Appellant that it was sheer coincidence that the date of signing of the new lease agreement and the date of admission of the Corporate Debtor into CIRP had fused is therefore not as simple and honest as is sought to be portrayed. 14. Once CIRP is commenced, there is complete prohibition on any action for transferring, encumbering, alienating or disposing of by the Corporate Debtor of any of its assets or creating any legal right or any beneficial interest therein. We are therefore of the view that the Corporate Debtor or the Appellant could not have executed the fresh lease agreement once CIRP was initiated and moratorium was ordered. The motive and intent of the Corporate Debtor and the Appellant with respect to the timing of the execution of the lease agreement and the tenure of the fresh agreement not only lacked transparency but was in the teeth of moratorium provisions of IBC. This by itself constituted sufficient basis for holding the fresh lease agreement to be invalid and unenforceable. 15. The Adjudicating Authority has relied on the decision of this Tribunal in Jhanvi Rajpal ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... requirements of the Maharashtra Rent Control Act was clearly beyond the jurisdiction of the Adjudicating Authority and the latter could not have held the licence agreement to be void-ab-initio and non-est in terms of law. 19. Coming to our findings in this regard, we notice that it is an admitted fact that the Mumbai premises belonged to the Corporate Debtor and was under occupation of the Appellant basis an unregistered licence agreement. Admittedly, the licence agreement in the present case was simply notarized and was not a registered document. In terms of the Maharashtra Rent Control Act, this licence agreement was compulsory registrable and since this was not done it rendered the licence agreement void. It is the entrenched obligation and right of the Liquidator under Section 35 of IBC to take possession of the assets of the Corporate Debtor, hence, the filing of IA No.94 of 2022 by the Liquidator seeking the intervention of the Adjudicating Authority by invoking Section 60(5)(c) was in order. There cannot be any dispute in the present case that application which was filed by the Liquidator to take possession of the assets of the Corporate Debtor arose out of insolvency/li....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., we do not find this prayer to be dehors of the insolvency/liquidation proceedings. It is not denied that Ahmedabad and Mumbai property had been in the enjoyment and possession of the Appellants and hence the obligation on their part for payment of rental and usage charges was a given. When we peruse the material on record and submissions made by rival parties, we find that the Adjudicating Authority on noticing that payment of rent was due qua the premises occupied by the Appellants, it had ordered vacation of the premises by them which decision of the Adjudicating Authority was challenged by the Appellants before the Gujarat High Court. The Appellants challenging the jurisdiction exercised by the Adjudicating Authority for allowing IA Nos.63 & 94 of 2022 had filed a Special Civil Application No. 9402 of 2024 (herein after referred to as "SCA") before the Gujarat High Court. Initially, the Gujarat High Court in its interim order dated 28.06.2024 deferred the handing over of possession by the Appellants but directed them to deposit lease rent/license fees with the Liquidator. However, what is noteworthy is that the Gujarat High Court in its final orders dated 13.10.2025 refused to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....CC (Civ) 356] this Court observed that: (SCC p. 422, para 13) "13. One of the important objectives of the Code is to bring the insolvency law in India under a single unified umbrella with the object of speeding up of the insolvency process." The principle was reiterated in ArcelorMittal [ArcelorMittal (India) (P) Ltd. v. Satish Kumar Gupta, (2019) 2 SCC 1] where this Court held that: (SCC p. 88, para 84) "84. ... The non obstante clause in Section 60(5) is designed for a different purpose: to ensure that NCLT alone has jurisdiction when it comes to applications and proceedings by or against a corporate debtor covered by the Code, making it clear that no other forum has jurisdiction to entertain or dispose of such applications or proceedings." Therefore, considering the text of Section 60(5)(c) and the interpretation of similar provisions in other insolvency related statutes, NCLT has jurisdiction to adjudicate disputes, which arise solely from or which relate to the insolvency of the corporate debtor. However, in doing so, we issue a note of caution to NCLT and Nclat to ensure that they do not usurp the legitimate jurisdiction of other courts, tr....