TaxTMI 
TaxTMI 
2026 (4) TMI 442
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....l for the appellant the appellant is an owner of the ground floor, 1st floor and 2nd floor of Plot No.5, Block-BG, Action Area-IB, New Town, Rajarhat, Kolkata, West Bengal 700156, herein called the leased property. A lease agreement dated 17.09.2008 was executed between the appellant and M/s Home Solutions Retail India Ltd for a period of 21 years. As per the terms of the lease deed, the lessor was entitled to terminate the lease deed if there was default in payment of rent for two consecutive months. 3. The business of M/s Home Solutions Retail India Ltd was taken over by M/s Pantaloons Retails India Ltd (PRIL), on or about 16th March, 2013 M/s PRIL then changed its name to Future Retail India Ltd. The Future Retail India Ltd further assigned its lease hold rights to the Corporate Debtor. 4. Vide IA No.4147/2023, the appellant sought for vacant and physical possession of the leased property from the Corporate Debtor on the ground the lease has since been terminated vide notice dated 14.04.2023, prior to the initiation of the CIRP of the Corporate Debtor due to non-payment of rental since February, 2022. 5. Admittedly the moratorium started on 04.05.2023 and the terminatio....
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....of ownership and possession are triable issues that require adducing of oral and documentary evidence which is not possible in a summary procedure followed by this Tribunal. On account of the above, without expressing any opinion with respect to the ownership and possession of the leased premises, we leave it open to the parties to file seek an appropriate remedy before a competent civil, court/ authority/ forum to establish their respective right, title, and i) interest in the Leased Premises once the statutory moratorium ceases to be effective as per the provisions of Section 14(4) of the Code. 17. Even otherwise, so far as the question of handing over possession to the Applicant is concerned, Section 14(1)(d) of the Code prohibits recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor, more so when it is being used for sustaining the corporate debtor as going concern. The Hon'ble NCLAT had an occasion to deal with a similar issue in Company Appeal {AT) (Insolvency)No. 323 af2018 in MI s Navbharat Castings LLP vs. MI s Moserbear India Ltd. & Anr". In this matter, the Hon'ble NCLAT was dealing....
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....ed by the Applicant has already been verified and partially admitted by the Respondent, no direction in respect of the said claim needs to be given to the Respondent any more. 20. On the basis of the above discussion, we are of the view that the applicant has failed to concretely establish its the ownership qua the leased premises and also the arrangement of lease between the Applicant and the Corporate Debtor. Therefore, in the given circumstances, the possession of the premises in question cannot be ordered to be handed over. Even otherwise, possession of premises which is being used to keep the Corporate Debtor as a going concern cannot be disturbed in light of the moratorium u/s 14(1)1(d) of the Code. However, looking at the facts and circumstances of this case, as discussed above, we feel it necessary to issue a note of caution to the RP to be circumspect enough while dealing with the property in question and must satisfy himself to the hilt with regard to the title of the leased premises as to whether the same legally and legitimately vests in the Applicant. 9. At the outset the finding the appellant is not an owner/landlord of the leased premises is wholly agains....
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....r the agenda and accord their approval for the said interim finance in order to enable the Corporate Debtor to continue functioning as a going concern and to preserve its value during the CIRP However, the agenda for interim finance was rejected by the CoC. A copy of the Minutes of the 27th Committee of Creditors Meeting held on 30th April 2025 along with the voting results is hereto annexed and marked as Exhibit "C" 11. The learned counsel for the appellant also pointed out to Minutes of 27th Meeting for the Committee of Creditors of Corporate Debtor held on 30.04.2025 wherein similar issue was raised before Committee of Creditors and following was noted: - • The representative from Edelweiss ARC subsequently asserted that continuing store operations at this juncture, considering the low volumes of sales, is unsustainable and that injecting funds through interim finance would not be a viable solution. The Chairperson informed the CoC that vacating the premises would require approximately three months, during which logistics and warehousing costs would need to be addressed to store the inventory elsewhere. COC took note of the same. • Furthermore, a rep....
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....two years has already passed. It cannot be disputed that the rentals during the CIRP period is required to be mandatorily treated and paid as CIRP cost. iv. Admittedly, no business is being transacted in the premises in question nor the Corporate Debtor is being run as a going concern. Therefore, the RP cannot be allowed to retain the possession merely on the ground that it will further bring down the value of the Corporate Debtor. v. Even though the building in question was raised by the Corporate Debtor but as per the terms and conditions of the Lease Deed executed between the Applicant and the Corporate Debtor, upon termination of lease the Corporate Debtor was required to give back the property on "As Is Where Is" basis which would imply that apparently the Corporate Debtor is not entitled to claim any compensation on account of the fact that the building on the leased land was raised by it. vi. The Applicant cannot be put to a double jeopardy, as on one hand no rent is being admittedly paid to him since February, 2022 which includes pre and post CIRP periods nor the possession is being handed over to him which is resulting in a continuing loss to him....
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....ction 9 of the Arbitration Act, 1996, clearly establishing that it was not motivated by insolvency, and significantly, even the RP/Respondent has at no stage challenged the said termination on the ground of it being insolvency-driven, and has thus waived any such objection. It was argued this position leaves no subsisting proprietary, possessory, or enforceable right in favour of the Corporate Debtor as on the insolvency commencement date, rendering Section 14(1)(d) of the IBC wholly inapplicable to the Subject Premises. 15. It was argued the consistent judicial position, including of the same Bench of the Ld. Adjudicating Authority, supports restoration of possession on identical facts, viz Kothapally Krishna Reddy (supra) involving pre-CIRP lease termination, wherein the RP was directed to vacate and hand over possession, recognising the premises as not constituting an asset of the Corporate Debtor; however, the Impugned Order departs from this settled position solely on a self-created issue of ownership which was never raised, agitated, or put in issue by any party. 16. It is argued the plea that rentals would be treated as CIRP costs is wholly illusory; despite repeated a....
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.... judgment passed by the Hon'ble Supreme Court in the matter of A A Estates Private Limited v Kher Nagar Sukhsadan Co-operative Housing Society, SLP (C) No. 10758 of 2025 to contend since the development right were terminated before the initiation of CIRP, the actual physical possession of the Corporate Debtor may also be ejected during the CIRP. However, the Hon'ble Supreme Court has distinguished recovery during moratorium in para 15.10 of the judgement. Relying upon Rajendra K Bhutta, the Hon'ble Supreme Court held Section 14(1)(d) of the Code is applicable when the Corporate Debtor is in actual physical occupation of the property under a subsisting joint development license and the termination sought to recover such occupied property during the moratorium. Further, in para 16.9 of the Judgement, the Hon'ble Supreme Court has brought juridical possession under the protection of Section 14(1)(d) of the Code. Thus, the actual physical possession of the Property cannot be taken away during the subsistence of the moratorium. 19. Further, the Hon'ble Supreme Court of India in R.V. Bhupal Prasad v State of Andhra Pradesh and Ors, (1995) 5 SCC 698 has relied upon ....
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.... is the case of the Resolution Professional that WBSEDCL in their Affidavit disclosed an employee of the Appellant namely Santosh Agarwal stopped the WBSEDCL from reconnecting the electricity that kept the Central Store in the dark, which led to a steep decline in its sales. In view of disclosures made by WBSEDCL, the Resolution Professional had filed an I.A. No. 685 of 2026 against the Appellant under Section 74 of the Code to prosecute the Appellant and its employees. Section 74(2) of the Code provides where any creditor violates the provision of Section 14, knowingly and willfully authorises and permits such contravention by the creditor shall be visited with the penal consequences prescribed therein. The moratorium was in the knowledge of the Appellant, and thus it was alleged the appellant's conduct of withholding and obstructing effective electricity supply amounts to a frustration of the moratorium. 22. We have also gone through the judgement rendered by the Hon'ble High Court of Delhi in Acipiter Investments Aircraft Limited vs Union of India & Anr., 2024 SCC OnLine Del 3125, and we are of the considered view it does not apply to the present case as it has been r....