During Liquidation, NCLT Empowered To Decide Matters Relating to Eviction Of Premises Owned By Corporate Debtor: NCLT Hyderabad

The National Company Law Tribunal (NCLT), Hyderabad Bench, comprising of Shri Rajeev Bhardwaj (Judicial Member) and Shri Sanjay Puri (Technical Member), has held that during the liquidation process, NCLT is the right forum to decide on the matters concerning eviction of the premises owned by the Corporate Debtor. Background Facts In 2013, a Lease Deed was executed between Mr. Mohd Jamal Athemadnia (“Tenant”) and Sagar Infra Rail International Limited (“Corporate Debtor”) in respect of a property owned by the latter. The Tenant ran its business from the Property. The Lease Deed expired in January 2020. The Corporate Debtor was admitted into Corporate Insolvency Resolution Process (“CIRP”) by the NCLT. Subsequently, the NCLT ordered liquidation of the Corporate Debtor and the Property became a part of the liquidation estate. In 2021, the Liquidator issued a Sale Notice for auctioning the Property and the Tenant was one of the bidders. However, the Property was sold to another person in terms of Sale Certificate dated 17.09.2022. Thereafter, the Liquidator filed an application under Section 60(5) of IBC before the NCLT, seeking a direction to the Tenant to pay arrears of rent and vacate the Property. ISSUE Whether the NCLT has jurisdiction to decide the issue of eviction of Corporate Debtor’s Property? NCLT VERDICT The Bench placed reliance on the NCLAT judgment in Adinath Jewellery Exports v Mr. Brijendra Kumar Mishra and Ors., CA(AT)(Ins) No. 748 of 2023, wherein it was held that NCLT is the appropriate forum for addressing matters arising during the liquidation process of a Corporate Debtor. The said case concerned a person claiming to be a ‘tenant’ under Maharashtra Rent Control Act, even when no agreement was signed with the Corporate Debtor and the Leave and License agreement had also expired. The NCLAT held that the NCLT possesses correct jurisdiction in considering an application for vacation of premises of the Corporate Debtor. Thus, during the liquidation process, NCLT is the right forum to decide on the matters concerning eviction of the premises owned by the Corporate Debtor. The Bench has directed the Tenant to pay arrears of rent and vacate the Property. Case Title: Mr. Sri Vamsi Kambhammettu v Mr. Mohd Jamal Athemadnia Case No.: CP (IB) No. 376/07/HDB/2018 Counsel for Applicant: V.V.S.N Raju, Advocate Click Here To Read/Download Order

During Liquidation, NCLT Empowered To Decide Matters Relating to Eviction Of Premises Owned By Corporate Debtor: NCLT Hyderabad

Pallavi Mishra

Tags