SINCERE SECURITIES PRIVATE LIMITED Vs. CHANDRAKANT KHEMKA

JUDGEMENT

(1.) This appeal, under Sec. 62 of the Insolvency and Bankruptcy Code, 2016[for short, "IBC"], calls in question the order dtd. 12/11/2024 passed by the National Company Law Appellate Tribunal, Principal Bench, New Delhi[for short, "NCLAT"], allowing Company Appeal (AT) (Insolvency) No. 1064 of 2023 filed by Chandrakant Khemka, respondent No. 1, and setting aside the order dtd. 7/8/2023 of the National Company Law Tribunal, Kolkata Bench[for short, "NCLT"], in CP(IB) No. 1377/KB/2020. Thereby, the NCLT had directed delivery of possession of the property in question to the appellants herein.

(2.) Facts, relevant to this adjudication, need recounting at some length. On 13/2/2019, a Memorandum of Understanding was executed by and between Nandini Impex Private Limited, which became a corporate debtor under the IBC thereafter, represented by its Director, Chandrakant Khemka, on the one hand, and Noble Dealcom Private Limited along with Jodhpur Properties and Finance Private Limited, appellant Nos. 2 and 3 herein, on the other hand, whereby Nandini Impex Private Limited availed financial assistance to the tune of Rs.3.00crores from them and secured the same through deposit of the title deeds relating to the rear portion of the ground floor of White House, 1/18-20, Rani Jhansi Road, New Delhi. Another Memorandum of Understanding was executed by Nandini Impex Private Limited on 15/2/2019 with Sincere Securities Private Limited, appellant No.1 herein, for availing a loan of Rs.3.00 crores from it and the same was secured through deposit of the title deeds of the front portion of the ground floor of White House. As Nandini Impex Private Limited failed to repay the loans, separate conveyance deeds were executed by it on 27/2/2020 transferring the title over the front and rear portions of the ground floor of White House to the appellants respectively. However, two separate Leave and License Agreements were executed simultaneously on the same day, whereby possession of the front and rear portions of the ground floor of White House was retained by Nandini Impex Private Limited on payment of rentals of 6 lakhs Rs.per month for each portion. Owing to the default in payment of the rentals, the appellants terminated the Leave and License Agreements on 8/5/2020. Eviction suits were also instituted by the appellants for regaining possession of the subject ground floor portions along with other reliefs.

(3.) While so, UCO Bank, respondent No. 3 herein, filed a petition under Sec. 7 of the IBC against Nandini Impex Private Limited. The same was admitted on 20/9/2022 by the NCLT, initiating corporate insolvency resolution process[for short, "CIRP"] against Nandini Impex Private Limited, the corporate debtor. Significantly, UCO Bank was the sole member of its Committee of Creditors,for short, "CoC". The appellants, as operational creditors, filed their respective claims before the Interim Resolution Professional appointed for the corporate debtor and the said claims were accepted in toto. At that stage, UCO Bank, constituting the CoC, deputed the Resolution Professional to visit the subject property on the ground floor of White House and decide whether there was any need to retain the same by paying huge rentals. Thereafter, at its meeting held on 6/4/2023, the CoC decided that there was no requirement to hold on to the subject property and requested the Resolution Professional to hand over the possession thereof to the appellants. Chandrakant Khemka, being a suspended director of the corporate debtor, raised objections to this move. Interlocutory Applications came to be filed by the appellants in 2023 seeking a direction from the NCLT to return the subject property to them. By order dtd. 7/8/2023, the NCLT noted the decision of the CoC that the subject property was not required and directed the Resolution Professional to deliver possession of the same to the appellants. Aggrieved thereby, Chandrakant Khemka filed an appeal before the NCLAT. By way of the impugned order dtd. 12/11/2024, the NCLAT allowed his appeal and set aside the order dtd. 7/8/2023 passed by the NCLT, observing that Sec. 14(1)(d) of the IBC barred recovery by an owner of property during the CIRP, when such property was occupied by the corporate debtor. The NCLAT remanded the matter to the NCLT to consider the issue afresh.