Prabhat Jain Vs MP Industrial Development Corporation Limited. (NCLAT Delhi)
NCLAT Delhi held that liquidator cannot create sub-lease over properties not owned by the corporate debtor without prior permission of concerned authority. Accordingly, action to sub-lease without specific permission is incorrect and illegal.
Facts- The present Appeal has been filed by Mr. Prabhat Jain, Liquidator of M/s Narmada Cereal Pvt. Ltd. (the Corporate Debtor under liquidation) under 61(1) of the Insolvency & Bankruptcy Code, 2016 against the Impugned Order dated 28.04.2023 passed by National Company Law Tribunal, New Delhi Bench, whereby the Adjudicating Authority rejected the plea of the Appellant to allow the Appellant to sub-lease the factory of the Corporate Debtor to M/s Maa Yashoda Food Grains. Aggrieved by the same, the Appellant has filed the present appeal.
Conclusion- Hon’ble Supreme Court of India has categorically held that the statutory powers of a public body to regulate public lands cannot be overridden by provisions of the Code. Therefore, we find that the Appellant did not has right to create subleases over a third party’s land.
Held that action of the Appellant to sub-lease to M/s Maa Yashoda Food Grains, without specific permission of the Respondent No. 1 was incorrect and illegal as correctly held by the Adjudicating Authority in the Impugned Order.
