Bhagawant Narayan Naik Vs Ritesh R. Mahajan (NCLAT Chennai)
NCLAT Chennai held that rejection of application justified since disputed property claimed by the appellant will remain part of Corporate Debtor assets during Corporate Insolvency Resolution Process [CIRP] proceedings.
Facts- The Appellant is a third party to the Corporate Insolvency Resolution Process (CIRP) proceedings which was conducted in relation to the Corporate Debtor M/s. Sovereign Industries Limited. The Appellant contends and claims that he is the owner of the land in dispute and has been in continuous possession of the same. As far as the Respondents are concerned, Respondent No. 1 is the Resolution Professional and Respondent No. 2 is the Corporate Debtor (CD). A proceeding under Section 7 was initiated against the Corporate Debtor and as a consequence thereto, the Corporate Debtor was admitted to the CIRP proceedings by an order of 28.03.2023 and Respondent No. 1 was appointed as a Resolution Professional.
Conclusion- Held that a specific case has been made that the property in question is being used for the industrial purposes of the Corporate Debtor, which is a fact not denied by the appellants and it was falling within the premises of the Corporator Debtor which is already in custody of the Resolution Professional. Based on the aforesaid analysis, the Learned Adjudicating Authority while drawing its analogy based on pleadings and evidences had rightly come to the conclusion, that said property belongs to Mr. Basavraj Ningappa Arakeri, who acquired the same on 2013 and has transferred the said property to Mr. Chidanand Sangappa Patil only on 23.01.2023, who in turn has transferred the ownership of the property to the Appellant on 24.02.2023 and that after having the knowledge of the fact that the proceedings under Section 7 has already been instituted in October 2022. The orders under Section 7 were reserved on 06.02.2023 and the Corporate Debtor itself vide its Diary No. 5214 dated 02.12.2022, had stated that it signifies its willingness to admit the application and the directions for initiation of the CIRP proceedings in view of financial stress. In these circumstances, sale of the said property immediately after reserving of the judgment on 06.02.2023, itself is an avert act, and actions of the Appellant with regard to the aforesaid transaction which is subject matter of the Civil Suit, which has been instituted at his behest together with chronological sequence of transactions in the scheduled land during the pendency of CIRP proceedings shows that the sale was not bonafide and apart from this, since the appellant himself has already questioned the rights of the respondent in a regular Civil Suit, and his rights over the property are yet to be determined by the competent Civil Court, which he himself has invoked at this stage the pendency of the Civil Suit cannot be taken as a reason for interference in the CIRP proceedings. Further, the resolution plan as filed through IA No. 02/2024 in its Clause 5, describes the assets of the Corporate Debtor, which also refers to the ensuing litigation being Suit O.S. No. 16/2024. The apprehension expressed on the basis of the written submissions is without basis, as the Resolution Plan since it does not in any manner transfer or affect the title of the subject property and there is no immediate change of ownership or the Applicant’s right. In view of the discussions as above, it does not call for any interference at this stage and that too, while exercising the inherent powers under Rule 11 of the NCLT Rules, 2016.
