TaxTMI 
TaxTMI 
Recovery of Corporate Debtor Premises and Proof of Tenancy, Lease or Licence Rights under the Insolvency and Bankruptcy Code, 2016
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....le, but the claimant bears the burden of proving it through pleadings and reliable material showing the parties' intention and the incidents of tenancy, including payment and acceptance of rent where applicable. Do business registrations or utility-related records prove occupancy rights? No. Such records may evidence business operations at an address, but do not independently create title, possession rights, tenancy, leasehold interest or licence rights in the premises. What is the appropriate insolvency remedy? The Adjudicating Authority may entertain an application connected with recovery and protection of the corporate debtor's assets. The resolution professional may seek assistance of the local district administration under Regulation 30. The decision reported at 2026 (3) TMI 1646 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI addresses an important boundary between a genuine possessory right in immovable property and mere permissive occupation. It holds that the resolution professional may seek recovery of corporate-debtor premises where the asset belongs to the corporate debtor and the occupant cannot substantiate an asser....
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....vable. The Explanation excludes third-party assets that are merely in the corporate debtor's possession under trust or contractual arrangements. That exclusion does not assist an occupier where the premises themselves are owned by the corporate debtor. Section 25(1) and Section 25(2)(a) of the Insolvency and Bankruptcy Code, 2016 correspondingly require the resolution professional to "preserve and protect the assets of the corporate debtor" and to "take immediate custody and control of all the assets of the corporate debtor". These duties provide the statutory connection between recovery of the corporate debtor's premises and the insolvency process. Jurisdiction and enforcement Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 confers jurisdiction on the National Company Law Tribunal over "any question 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. Where an application seeks recovery of premises owned by the corporate debtor from an allegedly unauthorised occupant, the requisite nexus is established by the resolution professional's statutor....
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....operty. The label used by parties is not decisive. The governing inquiry is the substance of the arrangement, including the expressed terms, commercial purpose, control over the premises, consideration, conduct, and the parties' intention. Oral tenancy: legal possibility does not displace evidentiary burden The tribunal accepted the general proposition that an oral tenancy may be recognised. But this proposition did not resolve the factual dispute. The occupant's own account was that it remained in the premises because commercial dues remained unpaid and that interest on those dues was to be adjusted against use of the premises. It did not plead or establish the date of creation of tenancy, rent, frequency of payment, acceptance of rent, duration, or any other definite term showing a landlord-tenant relationship. The decision therefore distinguishes a genuine oral tenancy from a retrospective assertion of tenancy advanced to justify continued occupation. A claim that commercial receivables were informally adjusted against occupation cannot automatically become a lease or tenancy. Particularly where the alleged creditor has lodged and obtained admission of its monet....
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....d legal effect. On the material available, the tribunal found no pleaded or documentary foundation for any of these rights. Registrations and operational records cannot create rights in premises The occupant relied on business-related registrations, taxes, bills and similar records. The tribunal held that these documents only demonstrated that business was conducted from the location. They did not prove a grant by the owner or create a right to remain in the owner's property. This is an important evidentiary distinction for insolvency proceedings: regulatory records may corroborate occupation, but ownership-derived rights require proof of the transaction or legally recognisable conduct by which those rights arose. The related principle in 2008 (5) TMI 708 - Supreme Court is that an unregistered lease document cannot be used to establish an essential term affecting rights in immovable property under the guise of collateral proof. If even an unregistered written instrument cannot prove substantive tenancy terms beyond its permissible evidentiary use, third-party business records cannot independently establish those terms. Recovery within the insolvency framework Th....