Indore Bench of NCLT exercises jurisdiction under IBC to resolve asset dispute, orders eviction of Vatsal Acharya from Shree Uttam Food Products' factory.
In a significant ruling, the Indore Bench of the National Company Law Tribunal (NCLT) has directed Mr. Vatsal Acharya to vacate the premises of Shree Uttam Food Products (India) Private Limited, located in Village Bamnia, Tehsil Petlawad, District Jhabua, Madhya Pradesh. The order came following an application by Mr. Kuldeep Tank, the Resolution Professional of the Corporate Debtor, under the provisions of the Insolvency and Bankruptcy Code (IBC) 2016.
The bench, comprising Shri Brajendra Mani Tripathi, Member (Judicial), and Shri Man Mohan Gupta, Member (Technical), ruled that the unregistered lease deed dated December 16, 2023, which purportedly granted leasehold rights to Mr. Acharya, could not confer any valid rights due to its non-registration under the Transfer of Property Act, 1882, and the Registration Act, 1908.
The tribunal emphasized that the lease, being for a term of sixty months, required mandatory registration. The absence of such registration rendered the lease deed incapable of creating or evidencing any leasehold rights for Mr. Acharya. As a result, his possession of the premises was deemed unauthorized.
In addition to addressing the lease's validity, the tribunal asserted its jurisdiction under Section 60(5) of the IBC, which allows it to adjudicate disputes concerning the assets of a Corporate Debtor. The tribunal noted that the IBC has overriding effect over other laws, as per Section 238, thereby giving it the authority to decide on matters affecting the insolvency resolution process.
The order further directed the local police and district administration to assist the Resolution Professional in securing the premises and ensuring the handover of possession. The tribunal underscored the Resolution Professional's duty to take custody and control of the Corporate Debtor's assets, highlighting the unauthorized possession as a hindrance to fulfilling these statutory obligations.
This decision underscores the NCLT's role in protecting the interests of stakeholders during the Corporate Insolvency Resolution Process (CIRP) and reaffirms the tribunal's jurisdiction to override parallel civil proceedings when necessary to preserve the assets and value of the Corporate Debtor.
Bottom line:-
Insolvency and Bankruptcy Code (IBC) - Lease deed of immovable property, when unregistered, cannot confer valid leasehold rights - NCLT has jurisdiction under Section 60(5) of IBC to adjudicate issues related to the Corporate Debtor's assets, overriding parallel civil suits.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 18, 20, 25, 60(5), 238; Transfer of Property Act, 1882 Section 107; Registration Act, 1908 Section 17(1)(d).
Kuldeep Tank v. Vatsal Acharya, (NCLT)(Indore Bench) : Law Finder Doc id # 2945337
