TaxTMI 
TaxTMI 
2026 (9) TMI 1847
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....)(Ins) No.1462/2026, is against the common order dated 11.06.2026 passed by the Learned NCLT, Chandigarh vide which the appellant who is a tenant of the Corporate Debtor in a settled commercial possession of the Karabara Property since 13.05.2011 has been directed to be evicted within two weeks. 2. The Company Appeal (AT)(Ins) No.1475/2026 is also against the common order dated 11.06.2026 passed by the Ld. NCLT Chandigarh by which the appellant, a tenant of the Corporate Debtor in settled commercial possession of the Hussainpura property since 01.09.2018 has been directed to be evicted within two weeks. 3. It is argued in a meeting of Committee of Creditors, the Respondent was advised to file suit for eviction of premises under the Rent Restriction Act, 1949 before the Rent Controller but instead of doing so, the Resolution Professional filed an application under Section 60(5) read with Section 18 and 25 of the Code, seeking the eviction of the Appellant under the garb of taking control of the assets of the Corporate Debtor, by concealing relevant material facts and by distorting the same which amongst others, includes undisputed specific admission, existence and operation of....
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.... the rules of ejectment with respect to such tenants. The provisions of the SARFAESI Act cannot be used to override the provisions of the Rent Control Act. If the contentions of the learned counsel for the respondent Banks are to be accepted, it would render the entire scheme of all Rent Control Acts operating in the country as useless and nugatory. Tenants would be left wholly to the mercy of their landlords and in the fear that the landlord may use the tenanted premises as a security interest while taking a loan from a bank and subsequently default on it. Conversely, a landlord would simply have to give up the tenanted premises as a security interest to the creditor banks while he is still getting rent for the same. In case of default of the loan, the maximum brunt will be borne by the unsuspecting tenant, who would be evicted from the possession of the tenanted property by the Bank under the provisions of the SARFAESI Act. Under no circumstances can this be permitted, more so in view of the statutory protections to the tenants under the Rent Control Act and also in respect of contractual tenants along with the possession of their properties which shall be obtained with due proce....
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....ts and upon direction to liquidate the Corporate Debtor, the liquidator was impleaded in the said application and continued with it; hence it cannot be said the application became infructuous or could not be continued by the liquidator, though, technically filed under different sections but it were the contents of the application which were important. 8. Further, even if it were assumed that Sections 18 and 25 of the IBC are inapplicable at the liquidation stage, such a contention is immaterial, as Section 35 embodies pari materia powers vested in the Liquidator, identical in substance and intent. Section 35(1)(b), (d), (e), (k) and (l) collectively confer comprehensive authority upon the Liquidator to take custody and control of the assets of the Corporate Debtor, to protect and preserve such assets, and to undertake all acts necessary for their effective realization. 9. Sections 35(1)(b) and (d) do not merely confer enabling powers but impose mandatory statutory duties upon the Liquidator to secure and safeguard the assets of the Corporate Debtor. In this backdrop, the present Application, seeking recovery and protection of such assets, falls squarely within the statutory m....
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....d NCLAT to ensure that they do not usurp the legitimate jurisdiction of other courts, tribunals and fora when the dispute is one which does not arise solely from or relate to the insolvency of the Corporate Debtor. The nexus with the insolvency of the Corporate Debtor must exist. 11. The impugned order duly notes the subject properties were admittedly the asset(s) of the Corporate Debtor and both these properties viz Karabara Property and the Hussainpura property were reflected in the Balance Sheet and Books of Accounts of Corporate Debtor i.e. Venus Garments (India) Ltd. Hence both these properties constitute the assets of the Corporate Debtor and form part of the liquidation estate within the meaning of Section 36(3)(a) of the Code and the liquidation estate vested in the liquidator upon passing of the liquidation order dated 22.07.2025 included both the subject properties. The reasoning of the Ld. NCLT given to this effect is as under: - 18. The liquidation estate, which vested in the Liquidator upon the passing of the Liquidator Order dated 22.07.2025, includes both the subject properties, i.e. the Karabara Property and the Hussainpura Property. Section 36(1) of the....
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....ns.) No. 1417 of 2022, the Hon'ble NCLAT has held that eviction proceedings by the RP/Liquidator before the NCLT are maintainable. The Hon'ble NCLAT specifically held that Embassy Property (supra) has no application to cases where the Corporate Debtor is the owner/landlord, the ratio of Embassy Property is expressly confined to situations where the Corporate Debtor is a lessee seeking to assert rights against a governmental authority. At paragraph 20 of the Judgment Hon'ble NCLAT underscored the intent and purpose of the IBC, which is to ensure that the assets of the Corporate Debtor are realised in a time-bound manner for the benefit of the creditors, and any obstacle to that realisation, including wrongful occupation of the Corporate Debtor's property, is a matter arising in relation to the insolvency that this Tribunal has jurisdiction and duty to address. Paras 14, 17 and 20 of Jhanvi Rajpal (supra) are reproduced below: "14. For effectuating the duties entrusted on the IRP under Section 18 recourse to adjudicating Authority by filing an Application under Section 60(5) is fully permissible. In the present case, we are considering the case where there is no dispute ....
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....ssets is pending in any court or authority. The judgment in the case of "Embassy Property" (supra) does not come to the aid of the Appellant in the present case. Xxxxx 20. Accepting the contention of the Learned Counsel for the Appellant that RP is obliged to file a suit for eviction of the Appellant under MP Accommodation Control Act, 1961 even though lease in favour of the Appellant has expired shall be unduly prolonging the insolvency process which is a time bound process. When the Corporate Debtor has the ownership rights over the premises which premises can be taken in control by IRP/RP, we are of the view that for eviction of the Appellant especially in event when lease in favour of the Appellant has come to an end, filing a suit is not contemplated in the statutory scheme contained in IBC. 12. Further the lease(s) created for a fixed term of 30 years, were mandatorily required to be registered and as both these lease deeds were never registered, hence per Section 49 of the Registration Act could not be received as an evidence qua the content of the document. The impugned order rather notes the directors of both M/s Duke Fashions (India) Ltd and M/s UV & W Prod....
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.... (supra) is misplaced. The Supreme Court's reasoning in such case was specifically premised on the non-obstante clause in the SARFAESI Act and the distinct scheme of that legislation, which confers rights on secured creditors, not resolution professionals or liquidators. The ratio of Vishal Kalsaria, passed before enactment of Section 238 of IBC, has no application to the IBC framework, as has been specifically distinguished in catena of judgments. 18. Moreso, Vishal N. Kalsaria is inapplicable on three independent grounds: (a) it was decided on 20.01.2016 before Section 238 IBC was enacted and was specially in context of SARFAESI Act. (b) it was premised on protection of a blameless, unrelated, rent-paying third-party tenant, and not applicable to the Respondents, who are related parties of Corporate Debtor under Section 5(24) of IBC and (c) the Hon'ble Supreme Court itself conditioned protection on "paying and receiving rent", whereas respondents have admittedly not paid any rent to Corporate Debtor in seven years and alleged some adjustments without proper documents. 19. Thus the application is maintainable as an exercise of the NCLT's jurisdiction under Section 60(5)(c) o....