Arun Baroka, Member (Technical)
1. The present appeal has been filed against the order dated 4th July, 2023 passed by the ‘National Company Law Tribunal, Kolkata Bench –II (hereinafter referred as to ‘the Adjudicating Authority) in IA (IB) No. 1007/KB/2023 filed by M/s. Victory Iron Works Pvt. Ltd. (Respondent No.1 herein).
2 Briefly the case brought out by the Appellant is that Respondent No.1 filed an application being IA (IB) No. 1007 of 2023 in CP(IB) No.372/KB/2019 seeking the following reliefs:
“a. Allow the instant application.
b. Direct Respondent No.1 to not interfere in the peaceful physical possession of area consisting of 10000 sq. ft. of land situated at Khatian No. 1523.1524 in Mouza Ramrajatala Thana Jogacha, District Howrah, West Bengal along with right of ingress of Containers of exportable goods and movement of all vehicles from the main entry gate.
c. Direct the Respondent No.2 to not put a padlock on the entry gate to the said property.
d. Pass an order directing for status quo to be maintained as regards the right of usage of the said property during the pendency of the instant application. e. Direct the Respondent No.1 to get the demarcation of the area of 10000 sq. ft. to be utilised by the Applicant along with area of ingress and egress.
f. Pass any such orders as may be deemed fit, proper and necessary in the instant case.”
3 However, the Appellant has claimed that without even affording an opportunity of hearing to the Appellant herein, being the contesting Respondent before the Adjudicating Authority in the aforesaid Application to file its reply, the Adjudicating Authority without conducting any enquiry proceeded to hear the Application and passed the impugned order, while inter alia returning the following finding:
“…
14.In view of the orders passed recognising the applicants right to possess and continue business operation in the 10000 sq ft. of demarcated property, it is our considered opinion that it would only be fair to allow the applicant access to the said property as he was enjoining pursuant to the earlier orders passed by this Tribunal on 12.02.2020 and by the Hon’ble NCLAT on 04.03.2020. No interference with his right to ingress and egress over the piece of land, or any modification thereof is called for.”
4 The background of the case as per the appeal is as follows:
4.1 Shree Gobinddeo Glass Works Ltd. was the erstwhile owner of a parcel of land admeasuring 10.19 acres situated at Mouza Ramrajatala, P.S Jagacha, Howrah (Said land). The said land was mortgaged to UCO Bank for availing financial facilities. However, on account of non-payment of certain sums which remained outstanding, UCO bank invoked the provisions of Section 13(4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and the said land was auctioned for realization of the amount due from Shree Gobinddeo Works Ltd.
4.2 For the purpose of acquiring the said land, the Energy properties Private Limited i.e. Respondent No.2 herein approached Avani Towers Pvt. Ltd./Corporate Debtor to invest a sum aggregating to Rs. 2.70 crores into the Respondent No.2 for the purposes of acquiring the said land. The Corporate Debtor agreed to invest in the Respondent No.2 in the manner and subject to the terms and conditions contemplated in a MOU executed between the Corporate Debtor, the Respondent No.2 and the then shareholders of the Respondent No.2 on 24.01.2008.
4.3 It was understood and agreed between the aforesaid parties, that the Corporate Debtor would disburse an amount of Rs.2.70 Crores to UCO bank for and on behalf of Respondent no.2 to facilitate the purchase of the said land by Respondent No.2. Further an additional amount of Rs. 9.30 Crores was required to be paid by the Corporate Debtor to Respondent No.2 for the purpose of liquidation of all liabilities of the Respondent No.2 and for obtaining vacant possession of the said land in favour of the Corporate Debtor. Moreover, an amount of Rs. 3.50 Crores was advanced by the Corporate Debtor to Respondent No.2 over and above the amount of 12 crores already remitted by the Corporate Debtor. For the purpose of protecting the interest of the Corporate Debtor, including repayment of the amount disbursed by the Corporate Debtor to the tune of around Rs. 12 Crores, it was agreed that 40% shares of the Respondent No.2 would be transferred in favour of the Corporate Debtor which were to be transferred back in favour of the then shareholders of the Respondent No.2 upon completion of the development of the said land.
4.4 It had also been agreed upon in the aforesaid MOU that Respondent No.2 and the Corporate Debtor would enter into a definite agreement for undertaking the development of the said land within a period of one month of such acquisition.
4.5 Upon development of the said land, out of the total constructed area, 60% of the constructed area were to belong to the Corporate Debtor and the remainder of the 40% of the constructed area were to belong to the Respondent No.2. In furtherance of the object of the MoU, a shareholders agreement was entered into between Respondent No.2, the then shareholders of the Respondent No.2, the Corporate Debtor and Mr. Ratanlal Gaggar on 24.01.2008 (shareholders Agreement). By way of the shareholders agreement the parties, whilst reiterating the terms of the MoU, also agreed that Jhunjhunwala Family would transfer 20,000 equity shares representing 40% of the total paid up share capital of Respondent No.2 in favour of the Corporate Debtor. As a result, the Jhunjhunwala family would hold the balance shares of Respondent No.2 and it was also agreed that the remaining 20% shares of Respondent No.2 would be transferred to one Mr. Ratanlal Gaggar who would act as a trustee and hold the shares extending equal beneficial interest in favour of the Corporate Debtor and the members of the Jhunjhunwala family.
4.6 On 29.01.2008, UCO Bank issue a sale Certificate in respect of the said land in favour of Respondent No.2, after receiving the amount of Rs. 2.70 Crores from the Corporate Debtor. The original title deeds and the Deed of Conveyance executed in favour of Respondent No.2 were to be delivered by UCO Bank to Mr.Ratanlal Gaggar, who was required to hold the same in escrow. As agreed in the MoU, Respondent No.2 and the Corporate Debtor entered into a Development Agreement on 16.05.2008 whereunder the Corporate Debtor was appointed as Developer of the said land and granted development and possessory rights in respect thereof.
4.7 A Memorandum Recording Possession (Memo of Possession-I) was entered into between the Jhunjhunwala Family and the Corporate Debtor on 02.03.2010 and subsequently another Memorandum Recording Possession (Memo of Possession -II) which expressly recorded handing over of possession of the remaining portion of the Said Land which had not been handed over at the time of execution of the Memo of Possession-I. Further said Memo of Possession noted that the Corporate Debtor would be entitled to proceed with the development activity subject to the terms and conditions contained in the Development Agreement.
4.8 However, although the exclusive possession of the Said Land was handed over to the Corporate Debtor, the Respondent No.2 neglected and failed to fulfil its obligation/condition precedents, as entailed under the terms of the Development Agreement including failure to provide clear and marketable title of the said land, IRD clearance from the competent authority under the urban land (ceiling and Regulation Act), 1976 in respect of the said land which were absolutely critical and imperative for the Corporate Debtor for the purposes of commencing any development works on the said land.
4.9 Since the land was lying vacant and idle it was decided that a portion admeasuring 10,000 sq ft. of the said land (licensed Area) would be licensed to Victory Iron Works Ltd., i.e. Respondent No.1 for a term of 11 months commencing from 19.08.2011 for a license fee of Rs. 5,000/- per month. This was finalized by way of a Leave and License Agreement dated 19.08.2011 executed between the Corporate Debtor (as Licensor) and the Respondent No.1 (the Licensee) with Respondent No.2 standing in as the confirming party. The Leave and License Agreement expired by efflux of time on 18.07.2012 and was never renewed. It is relevant to note that Respondent N o.1 has failed to pay the license fee to the licensor (The Corporate Debtor). Therefore, Respondent No.1 in the teeth of the leave and license Agreement continues to occupy the licensed Area, till date in a manner which is in breach of any contrary to the license granted by the Corporate Debtor.
4.10 On 15.10.2019, the Adjudicating Authority initiated CIRP of the Corporate Debtor on an application under Section 7 of the Code filed by Sesa International Ltd. being CP(IB) No. 372/KB/2019. It was by way of the aforesaid order dated 15.10.2019 that the Adjudicating Authority appointed the appellant herein viz Mr. Jitendra Lohia as the IRP. The Appellant has subsequently been confirmed as the Resolution Professional by the members of the CoC on 14.11.2019 and the Adjudicating Authority on 15.11.2019. After taking charge of the affairs of the Corporate Debtor in due discharge of the duties under Section 18 of the Code, the Appellant visited the land with the object of taking control and custody. However, it was then that the Resolution Professional noticed that Respondent No.1 was in authorized possession of the land, even beyond the area as contemplated in the purported leave and license agreement.
4.11 In view of such unlawful acts of Respondent No.1 as elucidated heretofore, the Appellant herein was constrained to approach the Adjudicating Authority by way of an application under Section 25 of the Code R/w Regulation 30 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016 being CA(IB) No. 1807/KB/2019 in CP(IB) 372/KB/2018 and the same was allowed by the Adjudicating Authority vide order dated 12.02.2020 holding that the Respondent No.2 and the Respondent No.1 herein cannot disturb / obstruct the Corporate Debtor’s possession in the said land. The aforesaid order dated 12.02.2020 was challenged by the Respondent No.2 and 1 before this Tribunal being CA(AT) (Ins) No. 377 of 2020 and CA(AT) (Ins) No. 508 of 2020 and the same were dismissed vide common judgment and order dated 08.04.2021. Thereafter, the Respondent no.2 and 1 preferred two separate Civil Appeals against the aforesaid judgment and the order dated 08.04.2021 which were dismissed vide common order dated 14.03.2023 by the Hon’ble Supreme Court in Civil Appeal No. 1743 of 2021, with the following findings:
“37. Therefore, it is not very difficult to conclude, that a bundle of rights and interests were created in favour of the Corporate Debtor, by a series of documents such as (i) the MoU dated 24.01.2008;
(ii) the shareholders agreement dated 24.01.2008;
(iii) the flow of the consideration from the Corporate Debtor to the UCO Bank and to Energy Properties; (iv) the Development Agreement dated 16.06.2008; (v) the Memorandum Recording Possession dated 02.03.2010 executed by the original shareholders of Energy Properties; (vi) the Memorandum Recording Possession dated 24.06.2010 executed by Energy Properties in favour of the Corporate Debtor; and (vii) the Leave and License Agreement primarily executed by the Corporate Debtor in favour of Victory, which was merely confirmed by Energy Properties as a confirming party. Some of these bundle of rights and interests, partake the character and shade of ownership rights. Therefore, these rights and interests in the immovable property are definitely liable to be included by the Resolution Professional in the Information Memorandum and the Resolution Professional is duty bound under Section 25(2)(a) to take custody and control of the same.
…
…
48. As we have seen earlier, two applications were filed before NCLT. One was by the Resolution Professional and the other was by Victory. A careful look at the application filed by Victory in C.A. (IB) No.146 of 2020 would show that there was no whisper about Victory occupying any land in excess of what they were permitted to occupy under the Leave and License Agreement. Under the Leave and License Agreement, Victory was allowed to occupy only 10000 sq. ft. of land, upon payment of a monthly license fee of Rs.5,000/-. If at all, a vague averment was made in paragraph VII (c) of their application to the effect that inasmuch as the Corporate Debtor was unable to commence any development activity in the subject land, the owner and the developer, with their full consent, had decided to allow the applicant to run its business in the usual course from the subject land, because the subject land could not have been left vacant for any substantial period of time.
49. The fact that there were security guards posted in the property is borne out by records. This is why NCLT as well as NCLAT have done a delicate act of balancing, by protecting the interests of Victory to the extent of the land permitted to be occupied. In fact, Victory does not even have the status of a lessee, but is only a licensee. A license does not create any interest in the immovable property.
50. Therefore, NCLT as well as NCLAT were right in holding that the possession of the Corporate Debtor, of the property needs to be protected. This is why a direction under Regulation 30 had been issued to the local district administration.”
4.12 Thereafter, the Appellant herein in his capacity as Resolution Professional took control of 10.19 acres of the said land. The Hon’ble Supreme Court has in the aforesaid order dated 14.03.2023 categorically held that the Leave and License Agreement granted Respondent No.1 right of permissive use in respect of the License Area i.e. a portion of the land admeasuring 10,000 sq. ft. approx. out of the entire 10.19 acres of the land for a period of 11 months on the terms as agreed upon in the said agreement.
4.13 It is pertinent to mention here that there are two entry points for entering the said land. One is situated adjacent to the Licensed Area admeasuring around 10,000 square feet which is currently in use by the Respondent No.1, and another is situated at the far end of the portion of the land which is in use by the Respondent No.1. After taking possession of the said land measuring 10.19 acres, the Appellant in order to free the said land from all encumbrances to make it marketable with the aim of inviting better Resolution Plan(s), provided Respondent no.1 complete unhindered access to the Licensed Area which is currently in use by the Respondent No.1
4.14 Despite offering unrestricted egress and ingress to big vehicles including containers carries and trucks, Respondent No.1 filed an application being IA (IB) No. 1007 of 2023 in CP(IB) No. 372/KB/2019 seeking the following reliefs described in supra.
5 Appellant claims that by way of the aforesaid order, the Adjudicating Authority by way of a non-speaking order, directed the Appellant to provide access to the Licensed Area to Respondent No.1 in a stark contradiction to the order of the Hon’ble Supreme Court dated 14.03.2023, which expressly notices that Respondent No.1 is merely a licensee whilst directing the Appellant to take custody and control of the said land. Even otherwise, it is submitted that the Agreements read as a whole do no brook occupation of the said land by the Respondent No.1 in the manner as has been done by it.
Submissions of the Appellant
6 The Appellant herein has development rights on a piece of land admeasuring 10.19 acres situated at Ramrajatala, Howrah by way of several agreements entered in between Respondent No.2 (Energy Properties Private Limited) and the Corporate Debtor. The right, title and interest of the Corporate Debtor in relation to the aforesaid land has been confirmed by the Hon’ble Supreme Court by its order dated 14.03.2023 wherein it has been held that a bundle of rights and interest were created in favour of the Corporate Debtor by series of documents, and some of these bundles of rights and interests partake the character and shade of ownership rights. Therefore, these rights and interests in the immovable property are definitely liable to be included by the Resolution Professional (hereinafter referred to as RP) in the information memorandum and the RP is duty bound under Section 25(2) to take custody and control of the same.
7 It was also submitted that by way of a Leave and License Agreement dated 19.08.2011, a portion of the land admeasuring 10,000 sq. feet was licensed in favour of the Respondent no.1 for a period of eleven months. Although the said leave and license agreement expired by way of efflux of time, Respondent No.1 contends that it has continued to enjoy the said premises. It is the case of Respondent No.1, that Respondent No.1 was enjoying and occupied the entire area of 10.19 acres of land.
8 It is also submitted that the Respondents in collusion with each other were obstructing the Appellant to take control and custody of the aforesaid land that culminated into a series of litigation and the issue was finally settled vide judgment and order dated 14.03.2023 passed by the Hon’ble Apex Court. By the said order, the Hon’ble Supreme Court reaffirmed the orders passed by this Appellate Tribunal and the Adjudicating Authority.
9 Learned Counsel for the Appellant has submitted that although the CIRP of the Corporate Debtor commenced on 15.10.2019, Respondents by its aforesaid actions have successfully delayed the CIRP of the Corporate Debtor for almost four years already. It is further stated that currently the Corporate Debtor is at the cusp of Resolution process, wherein the CoC are currently evaluating several resolution plans. Essentially, Respondent No.1, by moving the Adjudicating Authority by way of the application under Section 60(5) of the Code being IA (IB) No. 1007 of 2023, sought to urge misplaced and factually inaccurate grounds. Specifically, easementary rights and its alleged infringement were pleaded in the said application along with alleged infraction of its fundamental right. Moreover, it is submitted that Respondent No.1 pressed into service Section 13(e) of the Indian Easement Act, 1882 before the Adjudicating Authority at the time of hearing the aforesaid application and it was after taking into consideration the said provision that the Adjudicating Authority, at an ad interim stage, before the Appellant was even permitted to file its response, pleased to pass the impugned order in effect allowing the substantive relief sought in the Application by Respondent No.1.
10 It is also submitted by learned Counsel for the Appellant that the Respondent No.1 whilst making specious and inaccurate pleas in the aforesaid Application has misled the Adjudicating Authority to the extent of going against the grain of findings of the Hon’ble Supreme Court in the aforesaid judgment and order dated 14.03.2023. It is submitted that the Adjudicating Authority by the impugned order has permitted Respondent No.1 to access the property as he was enjoying pursuant to the earlier order passed by the Adjudicating Authority on 12.02.2020 and this Appellate Tribunal on 04.03.2020. Therefore, once again permitting Respondent No.1 to access the property the way it had been enjoying prior to the aforesaid orders and /or prior to the commencement of the CIRP, would go against the finding of the Hon’ble Supreme Court.
11 It is also submitted that the Affidavit filed by Respondent No.1 before this Tribunal in the present appeal to which photograph of the gate adjacent to the portion of 10,000 sq. ft. land in use by Respondent No.1 has been appended, clearly demonstrates that Respondent No.1 has access to its portion of the said land without any hindrances. The Respondent No.1 has been obstructed and/or hindered from accessing its portion of the land is in the teeth of its own documents. Additionally, the Appellant submits that Respondent No.1 is currently in use of the gate adjacent to the portion of the land currently is used by the Respondent No.1. The photograph of the gate adjacent to the portion of the land used by Respondent No.1 clearly demonstrate that the same is sufficiently wide enough to permit ingress and egress of Respondent No.1, its staff as well as large vehicles and containers. The same is re-confirmed by the emails received from the guards manning the gate to the portion of land currently used by Respondent No.1. It is pertinent to mention that the aforesaid submission of the Appellant had been admitted (not denied) by the Respondent No.1 and therefore Respondent No.1 is capable of accessing the portion of the land currently used by it without any impediment and no prejudice is being caused to Respondent No.1. It is submitted that the question of law which arise for consideration of this Tribunal, are first whether the Adjudicating Authority in exercise of its jurisdiction under the Code, pass an order whilst considering provisions of the Indian Easement Act, 1882. Second, could the Adjudicating Authority have passed an order virtually allowing the application and its first substantive relief.
Submissions of Respondent No.1
12 Ld. Counsel for the Respondent No.1 in his written submissions denies in toto the contents of Appeal. He submits that the appeal under reply has been filed prematurely by the Appellant as the Adjudicating Authority in the impugned order has only given legal recognition to the Respondent No.1’s right to access the property as he was enjoying during the operation of the order dated 12.02.2020 as passed by the Adjudicating Authority and order dated 04.03.2020 passed by this Tribunal. The Impugned order does not issue any new direction and thus, the Appellant at this stage cannot be said to be aggrieved by the impugned order. It is noteworthy that the Appellant did not challenge the order dated 12.02.2020 as passed by the Adjudicating Authority in CA No. 1807/2019, order of this Tribunal dated 04.03.2020 and 08.04.2021 and hence, the said order have attained finality and no challenge can be preferred by the Appellate at this stage, when the directions passed earlier have only been reiterated by the Adjudicating Authority. Thus, restraining the Appellant from acting contrary to the order passed by this Tribunal and Hon’ble Supreme Court cannot be said to be grievance of the Appellant, when such orders were not challenged by the Appellant at the appropriate time, hence, the Appeal of the Appellant is legally untenable and without cause of action.
13. It is also submitted by Learned Counsel for the Respondent no.1 that since no development / construction was carried out by the Corporate Debtor at the aforementioned land, the Respondent No.1 herein with the permission of Corporate Debtor and the Respondent No.2 and under a verbal contractual arrangement occupied entire area of the aforementioned land i.e. 10.19 acres and also paid increased license fee in lieu of the renewed arrangement. Pursuant to appointment of the Appellant as the RP of the Corporate Debtor, the Appellant filed an application under Section 25 of the Code R/w Regulation 30 of IBBI (Insolvency Resolution Process for Corporate persons) Regulation 2016, being IA No. 1807 of 2019. The Respondent herein also approached the Adjudicating Authority with an application being CA (IB) No. 146 of 2020 seeking injunction restraining the Appellant from interfering and disturbing the possession and day to day business activities of the Respondent herein over the aforementioned land.
14. It is submitted by Ld. Counsel for the Respondent No.1 that the Adjudicating Authority vide common order dated 12.02.2020, disposed off both the aforementioned Applications, wherein the Application of the Appellant was allowed while also specifically preserving the right of the Respondent No.1 over 10,000 sq. ft. of land. The operative portion of the order of Adjudicating dated 12.02.2020, is the reproduced herein below for the ready reference of this Tribunal:
“ii) Our order dated 09.01.2020 shall not affect the activities of Victory Iron Works Ltd. in piece of land in their possession on the basis of leave and license agreement dated 11.08.2011 until the original owner of the property decides further course of action as far as leave and license agreement is concerned. Hence, this application i.e. CA(IB) 146/KB/2020 stands disposed off.”
15. It is submitted that the Respondent no.1 challenged the order of Adjudicating Authority dated 12.02.2020 before this Tribunal in Company Appeal No. 508 of 200. The Respondent No.2 had also filed an appeal before this Tribunal being Company Appeal No. 377 of 2020, wherein the Respondent no. 1 herein was arrayed as Respondent No.3. This Tribunal vide order dated 04.03.2020 directed the parties to maintain status quo i.e. the Appellant was restrained from disturbing the possession of the Respondent No.1 herein on the aforementioned land.
16. It is also submitted that para 4 & 5 of the aforementioned order dated 04.03.2020, demonstrates that the Appellant himself has admitted that the respondent No.1 is in the possession of the 10,000 sq. fts of the aforementioned land if not the whole. Further, this Tribunal vide order dated 08.04.2021, dismissed the Appeal of the Respondent no. 1 herein and also upheld the direction of the Adjudicating Authority that the possession and occupation of the Respondent herein over the land of the extent of 10,000 sq ft. covered by the Leave and License Agreement dated 11.08.2011, shall continue to be enjoyed by the Respondent without any interference from the Appellant. The Appellant also did not challenge the aforementioned order of this Tribunal dated 04.03.2020 and 08.04.2021, wherein this Tribunal has continued to protect the right of Respondent herein to enjoy, occupy and carry out its business activities from part of aforementioned land admeasuring 10,000 sq. ft. The Respondent herein being aggrieved by the order of this Tribunal dated 08.04.2021, filed an appeal before the Hon’ble Supreme Court under Section 62 of the Code being Civil Appeal No. 1743 of 2021 and the same was dismissed.
17. It is further submitted that in order to approach the backside gate from the main road and vice versa, the trucks have to enter into narrow path of Howrah Homes road, which is not more than 13 feet wide (which also includes 5 feet of encumbrances on both the sides) and is merely impossible for any small commercial vehicle to enter into or pass through let alone big trucks and containers. Further if any truck or container is able to enter the said road, then the same cannot pass through to reach the backside gate without damaging the houses, structures, vehicles of the residents parked cables running above the said road. Thus the suggestion of the Appellant that the Respondent can be directed to use the backside gate for conducting its business activities is entirely misplaced and misleading. The contention of the Appellant that the Respondent herein be relegated to backside gate for the ingress and egress of the large trucks and containers is untenable and unacceptable due to the geography and layout of the aforementioned land. Hence, the Appellant has been correctly restrained by the Adjudicating Authority from putting a padlock on the front gate of the aforementioned land, which will undeniably interdict the business activity of the Respondent and disturbed the possession and occupation of the Respondent. No.1.
18. Respondent in IA (IB) No. 1007/KB/2023 before the Adjudicating Authority claims that the abovementioned 10,000 sq. ft. land is situated in the middle of the said property which is essentially in a landlocked position and the Respondent 1, in order to access this, has to avail their right of ingress and egress through the main entrance. It is submitted by the Respondent 1 (Victory) that in accordance to Section 13(e) of the Easement Act, 1882, in case where partition is made of a joint property, necessary easement to access the property has to be provided to the concerned person. Herein, the main entrance is the necessary easement for the Respondent 1 to access and enjoy his possessory right over the 10000 sq. ft. and therefore the act of the Appellant, deliberately trying to unearth schemes and strategies to harass and agitate the Respondent 1 is not only unacceptable but also bad in law. Section 13(e) of the Easement Act, 1882 has been reproduced by the Respondents:
“…(e) if an easement over the share of one of them is necessary for enjoying the share of another of them, the latter shall be entitled to such easement, or…”
19. The Respondent has also given details of various appeals filed at various levels of Adjudicating Authority, Appellate Authority and Hon’ble Supreme Court which are not repeated again as the same were already discussed supra.
Observations and findings
20. Basis the appeal and also the written and oral submissions of Appellant and Respondents, it emerges that:
20.1.Hon’ble Supreme Court vide its Judgment dated 14.03.2023 recognizes Respondent No 1 (M/s Victory Iron Works Ltd.) as a licensee only with respect to the demarcated area of 10,000 Sq. feet out of total land of about 10.19 acres. Respondent No. 1 is just a licensee and licensee doesn’t create any interest in the immoveable property. On the other hand Appellant has a bundle of rights and interests. Some of them partake the character and shade of ownership rights.
20.2. Respondent No 1 has been a signatory of Leave and License Agreement dated 19.08.2011 but the words in the impugned orders of 04.07.2023
“…recognizing the applicants' right to possess and continue business operation in the 10000 sq.ft. of demarcated property…”
gives an erroneous impression of possession instead of just being a licensee.
20.3. There are two gates – one main gate and the back gate which is close to the area admeasuring 10,000 sq ft. Respondent No.1 has been provided the access from the back gate, which is closer to this portion of the land. If main gate is used for ingress and egress, the vehicles of Respondent No 1 will keep moving the whole day even in the remaining land, making the use of the remaining land unavailable for any future development. As a result of the impugned order, the remaining portion of the land will not be available freely and prospective buyers will not be attracted for investment for its development and therefore appellant will not be able to move forward as a resolution professional. Such an order becomes detrimental to the interests of the stakeholder of the Appellant.
20.4. Moreover, the easement issue has been raised for the very first time in the I.A (I.B.C)/1007 (KB) 2023. There is no mention of Indian Easement Act, 1882 in any fora in the past, which needs proper examination.
20.5. Apparently the appellant was not given any opportunity to file reply and in the very first hearing interim orders were issued on 04.07.2023.
21. In view of the facts and circumstances of the present case, we pass the following order:
21.1.Appeal is allowed.
21.2.The impugned judgment and order dated 04.07.2023 passed by the Adjudicating Authority in IA (IBC) 1007/KB/2023 in CP(IBC) 372/KB/2019 is quashed and set aside. The matter is remitted back to the Adjudicating Authority to look into all the aspects before passing any order in accordance with law.
