TaxTMI 
TaxTMI 
2026 (7) TMI 171
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....C' in short). The first appeal vide Company Appeal (AT) (Ins) No. 1606 of 2025 arises out of the Impugned Order dated 09.10.2025 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi) in IA-3793/2023 & I.A.(IBC)(PLAN)-51-2024 whereby it has allowed two applications filed by the Resolution Professional ('RP' in short) for approval of plan of the Corporate Debtor under CIRP and handing over of the Nalagarh property to the RP. The second appeal vide Company Appeal (AT) (Ins) No. 1607 of 2025 arises out of another impugned order dated 09.10.2025 whereby the same Adjudicating Authority in IA-3156/2023 & I.A.(IBC)(PLAN)-51-2024 has allowed both the applications filed by the RP for approval of plan of the same Corporate Debtor and handing over of the Baddi property to the RP. Aggrieved by both these impugned orders of 09.10.2025, these two appeals have been preferred by the Appellant. 2. Coming to the factual matrix of the present case, Section 9 proceedings were initiated against RCI Industries and Technologies Limited ('RCI' in short) on 15.01.2019. RCI was subsequently admitted into Corporate Insolvency Resolution Process ('CIRP' in short) on 25.11.2022. Pri....
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..... It is also relevant to notice that during CIRP, the Resolution Plan submitted by JTL Industries Limited-Successful Resolution Applicant ('SRA' in short) was placed before the Committee of Creditors which was approved on 17.08.2024 with 98.05% voting share. Thereafter RP-Respondent No. 1 filed I.A. No. 51 of 2025 on 06.09.2024 seeking approval of Adjudicating Authority of the resolution plan. Apprehending that the Nalagarh and Baddi Property were being treated as assets of the Corporate Debtor under the Resolution Plan, the Appellant filed I.A. No. 758 of 2025 objecting to the Resolution Plan. The SRA categorically submitted before the Adjudicating Authority that it was not seeking possession of either the Nalagarh or the Baddi Property which stood further affirmed by an affidavit dated 17.04.2025 whereby the SRA expressly relinquished and waived all rights, title and interest in the said properties in view of which the Appellant did not press I.A. No. 758 of 2025 and the same was disposed of accordingly. It is also relevant to notice that the Nalagarh and Baddi property had been leased out by the Appellant to Rikayaa Enterprises Limited and Rikayaa Greentech Private Limited throu....
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....th properties lay with the Appellant before the commencement of CIRP. However, owing to non-completion of certain ministerial and statutory formalities by the Corporate Debtor, the Appellant was constrained to institute Civil Suit Nos. 755/2021 and 756/2021 before the Senior Civil Judge, New Delhi which culminated in a Settlement Agreement dated 13.12.2021 and Consent Decree dated 24.12.2021 whereby a Court Receiver was appointed to complete the transfer formalities in respect of the two properties. Even the High Court of Himachal Pradesh in its judgment dated 10.03.2023 had also directed HPSIDC to transfer the Baddi Property in favour of the Appellant without insisting upon disputed charges thereby clearly affirming the Appellant's lawful rights over the said property. Submission was pressed that as both properties had ceased to be assets of the Corporate Debtor and the Appellant having continuously performed its obligations under the respective Agreements to Sell, they were entitled to protection under Section 53A of the Transfer of Property Act, 1882. Merely on account of non-execution of registered conveyance deeds, its possessory rights could not be disturbed in summary procee....
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....orate Debtor have made averments supporting the Appellant that both these properties had already been sold to the Appellant by the Corporate Debtor following which possession had been delivered to the Appellant before commencement of CIRP. Submitting that these properties were not assets of the Corporate Debtor, it was also added that the impugned order suffered from a contradiction by simultaneously approving the Resolution Plan and discharging the RP while also directing possession to be handed over to the discharged RP. The Respondents-Rikayaa Enterprises Limited and Rikayaa Greentech Private Limited have also submitted that they had entered into a registered Leave and License Agreement with the Appellant on 19.04.2022 respectively in respect of the Nalagarh Property and on 11.02.2022 in respect of the Baddi Property for a period of 15 years. It was submitted that both these lessee-entities had entered into the respective lease arrangements prior to commencement of CIRP after having been informed that the Appellant was in lawful possession of the properties pursuant to transactions executed with the Corporate Debtor. It was also submitted that both impugned orders were legally u....
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....d who could not have transferred the title of the property in favor of any third party. It was submitted that under Sections 18 and 25 of the IBC, the RP can take custody of assets over which the Corporate Debtor has ownership rights and hence the Adjudicating Authority had rightly admitted I.A. Nos. 3156 and 3793 of 2023 seeking possession of the Baddi and Nalagarh Property. It was further submitted that when the RP discovered suspicious and undervalued transaction executed by the suspended management of the Corporate Debtor in collusion with the Appellant in respect of the two properties, I.A Nos. 5153 of 2023 under Section 66 of the IBC were filed by him. 8. Making submissions on behalf of the Financial Creditors, Ms Nishi Chaudhary, Ld. Counsel submitted that the Corporate Debtor-RCI had executed an Agreement to Sell with the Appellant in respect of Baddi plot for consideration amount of Rs. 3.53 Cr. though this property had been originally purchased by Corporate Debtor for Rs. 4.70 Cr. thereby showing that the sale was at a loss. Even the consideration amount for Baddi property was not remitted through banking channels but made by way of payments adjustment which was an unu....
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....ty Act, 1882. The suspended management had only tried to create a facade of legality by initiating the Civil Suit proceedings before the Civil Judge and obtaining a Consent Decree to shield the fraudulent transfer from judicial scrutiny. It was contended that in terms of the statutory provisions of the IBC, the powers of Adjudicating Authority are sufficiently wide to cover examination of transactions which are fraudulent, preferential, undervalued or avoidable transactions. In the present facts of the case, therefore, the RP had rightly invoked jurisdiction of the Adjudicating Authority. Mere obtaining of Consent Decree does not denude or deprive the Adjudicating Authority of its powers to adjudicate on such matters. It was also contended that the subsequent leasing of the property to an entity which was related to the suspended management of the Corporate Debtor clearly showed that the same group of entities and their family members wanted to continue having control over the properties which had been purchased by way of sham transactions and onward lease made with a view to prejudice the legitimate rights of the Financial Creditors. Strong apprehension was expressed that unless t....
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....t of Hon'ble Supreme Court in Piramal Capital and Housing Finance Ltd. Vs 63 Moon Technologies Ltd. & Ors., (2025) 10 SCC 452 in which it was held that in Section 66 application, the Adjudicating Authority can only direct the Director of the Corporate Debtor to make monetary contribution to the assets of the Corporate Debtor as it may deem fit but does not empower the Adjudicating Authority to divest the possession of property from physical possession of the owner. Despite full knowledge of these facts leading to transfer of both the properties to the Appellant, the RP filed I.A. No. 3156 and 3793 of 2023 seeking possession of the Baddi and Nalagarh Properties on the erroneous premise that the properties belonged to the Corporate Debtor at a time when the properties already stood transferred in favour of the Appellant even prior to filing of CIRP petition. It was further contended that the RP concealed material facts relating to the Settlement Agreement, Consent Decree, appointment of the Court Receiver and orders passed by competent judicial forums from the Adjudicating Authority. The Adjudicating Authority had committed an error in ordering the handing over of these two propertie....
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....13. For a proper appreciation of the issue at hand, we may look at the prayers and reliefs which have been sought by the RP in I.A. Nos. 3156 and 3793 of 2023 which are as extracted hereunder: IA 3156 of 2023 "1. Pass an ad interim ex-parte order restraining the Respondents from further selling, encumbering, creating third party interest in the Baddi Property. 2. Direct the Respondents 1 and 2 to handover the possession of the Industrial Plot No. 108 admeasuring 9542.50 Sq. Mtr., Industrial Area, Baddi, Solan, Himachal Pradesh ("Baddi Property") to the Resolution Professional of the Corporate Debtor. 3. Direct the Respondents 3 to 6 to facilitate the handover of the Industrial Plot No. 108 admeasuring 9542.50 Sq. Mtr., Industrial Area, Baddi, Solan, Himachal Pradesh ("Baddi Property") to the Resolution Professional of the Corporate Debtor. 4. Direct that the Applicant is entitled to receive benefits of the lease from the Respondent 1 and the same is payable from February 11, 2021 till the date of handing over the Property to the Applicant." IA 3793 of 2023 "1. Pass an ad interim ex-parte order restraining the Respondent....
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....) The transferee has, in part-performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part-performance of the contract; (c) The transferee has done some act in furtherance of the contract and has performed or is willing to perform his part of the contract." 15. The judgment of Hon'ble Apex Court in Ghanshyam judgment is also being reproduced for easy reference: "16. Legally an agreement to sell may not be regarded as a transaction of sale or a document transferring the proprietary rights in an immovable property but the prospective purchaser having performed his part of the contract and lawfully in possession acquires possessory title which is liable to be protected in view of Section 53-A of the Transfer of Property Act, 1882. The said possessory rights of the prospective purchaser cannot be invaded by the transferor or any person claiming under him." 16. It was further canvassed that this Tribunal in Sicom Ltd. & Anr. Vs. Kitply Industries Ltd & Ors. in CA(AT)(Ins) No. 849 of 2021 had observed that the Hon'ble Supreme Court in Shrimant Shamrao Suryavanshi ....
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....rate Debtor. In this background, we find force in the argument of the Appellant that the ratio of the judgment of this Tribunal in Gir Vanvaso Resort Vs Pancard Clubs Ltd. in CA(AT)(Ins) No. 1482 of 2025 is not applicable since in Gir Vanvaso Resort judgment, the subject MOU by which property was claimed was not in the nature of an Agreement to Sell and moreover the subject MOU had surfaced after filing of the possession application by RP before the Adjudicating Authority. 19. This brings us to the contention of the Financial Creditor that Civil Suit for specific performance was an eyewash since the decree was not based on trial but was a decree premised on settlement by mediation. We find this to be a specious argument since a decree in a Civil Suit whether based on trial or based on mediation carries the same import and has the same ramifications. We are also guided by the judgment of Hon'ble Supreme Court in Manjunath Tirakappa Malagi & another Vs. Gurusiddappa Malagi (2025) SCC OnLine SC 835 which held that once the Court passes a compromise decree after such a satisfaction, the decree cannot be challenged in an appeal as no appeal lies against a compromise decree. The only ....
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....erties rather than trying to invoke the jurisdiction of the Adjudicating Authority within the framework of insolvency proceedings. 21. Thus, to answer the question framed by us at Para 10 above, we are of the considered view that when a Civil Court of competent jurisdiction had already passed a decree recognizing the possessory rights of the Appellant, the RP cannot be seen to invoke Section 18 of the IBC to bypass a Civil Court decree and take charge of the said properties. Even though a Court Receiver had been appointed for completion of ministerial formalities as the physical possession of the property was still with the Appellant, the possessory rights of the Appellant could not be disturbed in summary proceedings under the IBC merely on account of non-execution of registered conveyance deeds. 22. At this stage, we now take notice of the fact that during the pendency of I.A. Nos. 3156 and 3793 of 2023, the RP had filed yet another I.A vide No. 5153 of 2023 under Section 66 of the IBC seeking cancellation of the Sale Agreement in respect of both the Baddi and Nalagarh properties. The prayers of the RP in I.A No. 5153 of 2023 is as extracted below: (A). Declare the....
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.... 60. However, in cases of "Fraudulent or Wrongful trading" in respect of the business of the CD as contemplated in Section 66, the properties and the persons involved may or may not be ascertainable and therefore the Adjudicating Authority is not empowered to pass orders to avoid or set aside such transactions, but is empowered to pass orders to the effect that any persons, who were knowingly parties to the carrying on of business in such manner, shall be liable to make such contributions to the assets of the CD, as it may deem fit. The Adjudicating Authority in such applications may also direct that the Director of the CD shall be liable to make such contribution to the assets of the CD as it may deem fit, as contemplated in Section 66(2). In case of Fraudulent trading or Wrongful trading, it would be a matter of inquiry to be made by the Adjudicating Authority as to whether the business of CD was carried on with intent to defraud creditors of the CD or was carried on for any fraudulent purpose." (Emphasis supplied) It was therefore contended by the Appellant that Section 66 of IBC is confined to directing monetary contribution to the assets of the Corporate Debtor but d....
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....the Successful Resolution Applicant under the Resolution Plan, and the Resolution Professional/Monitoring Committee/Financial Creditors will pursue the claims in respect of the said properties. Any amount or benefit received will be avail by the Financial Creditors in accordance with the waterfall mechanism prescribed under Section 53 of the IBC, 2016." 27. The Adjudicating Authority in the above order has clearly directed that the RP/Monitoring Committee/Financial Creditor can pursue the claim in respect of two properties and that any amount or benefit so received would be availed by the Financial Creditor in accordance with waterfall mechanism prescribed under Section 53 of the IBC. Hence, the impugned order is unambiguously clear that the Financial Creditor can always reap benefit of Section 66 order with respect to the two properties. 28. It is an admitted fact that I.A No. 5153 of 2023 has been filed by the RP under Section 66 before the Adjudicating Authority which is currently pending. We find that neither the Appellant nor the Financial Creditor have any objection that the Section 66 application be pursued in accordance with law. Since the matter is pending before the....