TaxTMI 
TaxTMI 
2026 (6) TMI 69
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.... being IA(IBC)/2486(CH)/2024 seeking vacation of premises from the Appellant has been allowed and direction has been issued to the Appellant to vacate the salon in 2nd floor, 12-13 shops in 3^rd floor, the five rooms on the 8th floor of the hotel. Aggrieved by the said order, this Appeal has been filed. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are: (i) The Corporate Debtor ("CD") is running a five-star hotel namely - Hotel Majestic Park Plaza, situated at Ludhiana. The CD had obtained financial facilities from Tourism Finance Corporation of India. (ii) Tourism Finance Corporation of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the "IBC") being CP(IB)No.180/Chd/Pb/2022 against the CD claiming a default of Rs. 14,35,57,30,109/-. The Adjudicating Authority admitted Section 7 application on 03.07.2024 and Navneet Gupta (Respondent No.1) was appointed as Interim Resolution Professional ("IRP"), who was subsequently confirmed as RP. (iii) Financial facilities were assigned to UV Asset Reconstruction Company Ltd., who became Member of the Committee of Credi....
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....CD and after initiation of the CIRP, it is the duty of the RP to file an application to take possession of the premises. (vi) The Adjudicating Authority heard the parties and by the impugned allowed the application. With respect to the claim of the Appellant, the Adjudicating Authority held that the Appellant cannot be allowed to continue their possession in lieu of dues, if any, after initiation of CIRP. The Adjudicating Authority also returned a finding that with respect to Profit Share Agreement dated 17.06.2019 and 13.03.2020, no amount in that regard has been credited in the books of the account of the CD or the bank statements. In Paragraph 11 and 12 of the judgment, the Adjudicating Authority made following observations: "11. As regards the Occupancy of Second Floor Salon and 3rdFloor 13 Shops on the strength of alleged profit-sharing agreements dated 17.06.2019 and 13.03.2020, we note that no profit hitherto through that arrangement has been received by the Corporate Debtor. No amount in that regard stands credited into the Books of Account of the CD or the bank statements. In that context, we have also taken a note that the Tru Prime Private Limited are e....
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.... It is also submitted that though such invoices are straightaway recorded in the books of accounts, but there is no record of such receipts and consumption of the above quantum of ghee in the record of the CD. It was also pointed out that all these invoices issued on different dates are entered into books of accounts through general entries and are in seriatim which is inconsistent with normal business practice and supports their contention of fabrication. 12. It is also contended that the Tru Prime Private Limited(R3) is a related party to the Corporate Debtor as Mr. Kewal Krishan Sharma [one of the suspended director of CD] has been a common Director of both the Companies between 30.09.2012 and 27.05.2018 and also a shareholder of Tru Prime Private Limited and as well as close aid of R1-Jasbir Singh Khangura. It is also pointed that Mrs. Amandeep Khangura (Director of Tru Prime Private Limited) has been also a co-director with R1 in another Company named Caring XL Consultants Pvt. Ltd. (a Company with same registered address as of the Corporate Debtor) in which R1 was also a Shareholder. Further the Chief financial officer of the Corporate Debtor is also a Director in ....
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....of the IBC with respect to transaction in question. The Appellant is fully entitled to occupy the premises and it is licensee under the commercial agreement. The Appellant has cited various judgments in support of his submissions, which has not been considered by the Adjudicating Authority in the impugned order. 6. Shri Krishnendu Datta, learned Senior Counsel appearing for the RP (Respondent No.1) refuting the submissions of learned Counsel for the Appellant submits that Appellant has no right or authority to occupy the premises of the hotel. The Profit Sharing Agreement dated 17.06.2019 and 13.03.2020, which are claimed by the Appellant are sham transactions. The documents claimed by the Appellant are not part of the record of what has been received by the RP, nor the documents are reflected in any of the records of the CD. The documents for the first time surfaced in reply filed by the Appellant to the application for eviction, prior to which neither the said documents were produced before the RP nor even Suspended Directors informed of any such Profit Sharing Agreements. The Appellant was supplying milk and ghee to the hotel. The Profit Sharing Agreements are unr....
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..... The RP has sought eviction of the Suspended Directors, their families, friends, relatives and associates from the premises of the hotel. Initially, the Appellant was not impleaded as party to the application, however, in pursuance of the order of the Adjudicating Authority dated 05.05.2025, the Appellant was impleaded as Respondent No.3 in the application. The Appellant also filed a short reply and an additional reply in support of its case, where reliance has been placed on Profit Sharing Agreements dated 17.06.2019 and 13.03.2020 for occupation of 2nd and 3rd floor. With respect of occupation of 8th floor, it was pleaded by the Appellant that occupation of five rooms are on account of the Appellant having supplied the goods namely - milk and milk products to the CD at its hotel premises and the payments against the goods were made by the Bank transfer as well as by way of set-off for providing services. In the Appeal, which has been filed, no arguments have been advanced by the Appellant with regard to continuance of the occupation on 8th floor. In the application for interim relief, the prayers made are only for restraining dispo....
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....ing of reply to the application for vacation of Appellant and others from the hotel premises. The Agreements are admittedly unregistered Agreements and have not been adequately stamped. We, however, for arguments sake proceed to look into the Profit Sharing Agreements to find out as to whether the said Agreements can give any right to the Appellant to continue to occupy 2nd and 3rd floors of the hotel. The Profit Sharing Agreement dated 17.06.2019 is filed at Annexure A-4, under which the First Party is the CD, owner of the hotel Park Plaza. The Agreement states that Second Party has approached the CD to operate the Salon located at floor 2. The term of the Agreement was for eight years from the date of the Agreement. Clause-4, which deals with 'Profit Share', is as follows: "4. Profit Share. The Second Party shall share 25% of all profits with the First Party. Profits shall be calculated, in a reasonable manner, by both Parties and the basis of standard accounting procedures." 11. The Security Deposit stated "NIL". With respect to 'Profit & Loss', Clause-17 provides as follows: "17. Profit & Loss. I. The Second Party will furnish six monthly Pro....
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....for vacating the premises in possession of Suspended Directors of Corporate Debtor The Resolution Professional informed the committee that acting on the advice/suggestion of Committee during the 1st and 2nd meeting, the Resolution Professional, through his legal counsel has issued legal notice on 04.10.2024 to the Director (powers suspended) of the Corporate Debtor, Mr. Jasbir Singh Khangura and others for vacating the premises of Corporate Debtor which is in his possession. The Resolution Professional screen shared the said legal notice issued on 04.10.2024 whereby 5 days' notice period was given to Mr. Jasbir Singh Khangura for vacating the premises of Corporate Debtor. The said notice was discussed and deliberated in the meeting in detail. The CoC member asked the RP, to appraise committee about the areas which is still not being handed over to the RP, the Resolution Professional informed the committee that as per his knowledge a saloon at the 2nd floor, thirteen shops at the 3rd floor, which is the main lobby area, coffee shop and front office is there apart from other amenities, and room Nos. 1802 to 1806 at the 8th floor and all rooms at the 9th floor of Maj....
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....the RP to take all necessary actions to get hotel premises vacated. 17. The above Clauses of Profit Sharing Agreements, cannot give any occupancy right to the Appellant to continue in the premises of hotel after commencement of the CIRP, specially when RP has asked the occupants to vacate and handover the possession and has already filed an application for their eviction. The Profit Sharing Agreements relied by the Appellant dated 17.06.2019 and 13.03.2020 are neither a lease nor license to continue the Appellant to occupy the premises. What the Appellant claimed is that they entered into Profit Sharing Agreements with the CD and it was to share 25% of the profit out of the business. The record indicate that RP has never permitted the Appellant to continue after commencement of the CIRP and has asked for eviction of the premises and filed an application before the Adjudicating Authority for eviction. The RP also brough into the notice of the CoC about the illegal occupation and the Coc has authorized the RP to take appropriate action as per the IBC. Any right in the premises can be claimed only by virtue of any lease or....
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....r the Clauses of the Lease Deed, in fact the termination has not happened as has been pleaded by RP in its affidavit as extracted above. When the Lease Deed under which the Appellant has constructed the building and is entitled to receive the construction cost from the Lessor, termination and re-enter has not been done directly, by any sidewind, by the Clauses of Resolution Plan, extinguishing the rights of the Lessee, is impermissible and contrary to the law." 20. The facts of the above case indicate that there was a lease in favour of one of the Appellant, which was although not terminated, but SRA in the Resolution Plan has extinguished the rights under Clauses 13.3 to 13.6. In the above background, this Tribunal held that without terminating the lease, the rights of the lessee cannot be extinguished. 21. The above judgment does not help the Appellant in the present case. The Appellant does not claim any lease hold rights in the premises, which is being occupied by the Appellant, nor there is any license in favour of the Appellant. The Profit Sharing Agreements, which are relied by the Appellant are unregistered Agreements and they are only for the purpose of profit sharin....
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....uch application may not be maintainable under section 46 of I&B Code. Apart from that, real question is having published the notice calling for the EoI/Plan AS IS WHERE IS AND AS IS WHAT IS basis, whether the RP/CoC were in position to waive that condition while accepting the plan of M/s. K.L. Jute, I found that RP/CoC exactly did the same thing when they approved the plan submitted by M/s. K.L. Jute. I examined the plan of K.L. Jute products private Limited. M/s. K.L. Jute has made it clear in the resolution plan that the plan is subject to extinguishment of all claims (except criminal proceeding) against the corporate debtor upon approval of their plan by this authority. They gave list of such conditions precedent in the plan itself and stated that the plan is submitted subject to compliance of those conditions. Those conditions, were relating to exemption of all taxes/dues by the government/local authorities, disposal of all proceedings pending against the corporate debtor relating to such dues. How having submitted the plan after considering the invitation of plan on the basis of AS IS WHERE IS AND AS IS WHAT IS basis, it was not proper on the part of K.L. Jute to put all above....
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....annot be effectively implemented because resolution applicant made it very clear that his plan is subject to fulfilment of conditions i.e. eviction of Daaksh Jute LLP. To evict Daaksh Jute LLP, one has to approach proper forum. One does not know as to what time will require to get such eviction order. In such a situation, CoC ought not have approved the plan. I do not question commercial wisdom of CoC herein but it appears to me that the CoC did not consider the legal implications while approving the plan. They approved the plan ignoring the provisions of Section 30(2)(e) of I&B Code. I hold that resolution plan submitted for my approval is in a contravention of above provision of law. It cannot be approved by this authority. I reject the resolution plan of M/s.K.L. Jute Products Private Limited for the above reasons." 23. Further, the RP has filed an application under Section 45 and 46 for cancellation of the lease, which was dismissed by the Adjudicating Authority, which has been noticed in Paragraph 7 of the judgment, which is as follows: "7. That apart, it is stand of the Appellant that the 1st meeting of 'Committee of Creditor' on 02.03.2018 confirmed the 'Interim ....
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....ected. The above judgment does not come to any rescue to the Appellant. 26. Further, reliance is placed by the Appellant on judgment of this Tribunal dated 09.01.2025 in Company Appeal (AT) (Ins.) No.884 of 2024 - Sumati Suresh Hegde and Ors. vs. Anand Sonbhadra (RP0 and Ors., where an order was passed by the Adjudicating Authority on the application of the RP against the Appellant for direction to handover the control and custody of the property, which was challenged in this Tribunal. This Tribunal in the above judgment has noted that predecessor in the interest of the Appellant was tenant of the premises and in a Suit RAD No.916 of 2005 before a Small Causes Court, a decree was granted in favour of the predecessor in interest. In Paragraphs 6 and 7 of the judgment following has been noticed: "6. It is alleged that their predecessor in interest filed a RAD Suit No. 916 of 2005 before the Small Causes Court, Bandra Branch, Mumbai for declaration that he is a monthly tenant in the property in question. 7. The suit was decreed on 26.11.2009 with the following order:- "Suit is decreed with costs. It is hereby declared that Plaintiff is tenant of ....
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....under Sections 19, 25 and 60 sub-section (5) to seek eviction from the assets, which are owned by the CD. The Appellant having failed to prove any right to occupy the premises, the Adjudicating Authority has rightly allowed the application filed by the RP. 30. In the above reference, we also notice that against the same impugned order directing for eviction of Suspended Director and their relatives, Company Appeal (AT) (Ins.) Nos.686 and 801 of 2026 have been filed by Raman Khangura and Jagpal Singh Khangura and Ors. By judgment delivered today, we have dismissed both the aforesaid Appeal(s). In the above case also the Suspended Directors were claiming to continue in possession on the basis of two MoUs executed between the CD and the Suspended Director - Raman Khangura. In the above case in Paragraphs 18 to 22, we have observed as follows: "18. The occupancy rights in any immovable property can be claimed by means of a lease/license in the property. The Transfer of Property Act provides that the lease which is a lease for a period of more than a year can be only by registered agreement. The MoU being unregistered agreement, no right of occupancy can be claimed by an un-....
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....t is judgment of this Tribunal dated 27.03.2026 in Company Appeal (AT) (Insolvency) No.187 of 2026 "Classic Marble Company Pvt. Ltd. vs. Truvisory Insolvency Professional Pvt. Ltd. & Anr.". In the above case, Corporate Debtor's assets were occupied by Classic Marble who claimed that he is to continue in possession as per permission and there being dues on the corporate debtor, Appellant was entitled to continue till dues are cleared which was the case set up by the Appellant. This Tribunal held that the Resolution Professional could have taken steps to take possession of the assets belonging to the corporate debtor. In paragraphs 15, 16 & 17, following was held:- "15. Counsel for the Respondent has relied on judgment of this Tribunal in "M/s. Jhanvi Rajpal Automotive Pvt. Ltd. vs. R.P. of Rajpal Abhikaran Pvt. Ltd. Company Appeal (AT) (Ins.) No.1417 of 2022" decided on 05.01.2023. In the said judgment, issue of similar nature came for consideration. One of the questions which was framed by this Tribunal in paragraph 8(i) was 'whether the Adjudicating Authority had jurisdiction to entertain IA filed by the RP seeking direction to the Appellant to handover the possession....