ELICA HOSPITALITY LLP vs RAJASTHAN STATE INDUSTRIAL DEVELOPMENT AND INVESTMENT CORPORATION LTD
Company Appeal (AT) Ins No. 779 of 2022
Facts:
1.RIICO allotted institutional land admeasuring 5,740 square meters situated on plot no. CC-11, Industrial Area Neemrana, Alwar to Neesa Leisure Ltd. vide allotment letter dated 11.07.2007 and executed a lease deed on 21.06.2008. The RIICO also issued no objection certificate (NOC) to the Neesa Leisure Ltd. (Corporate Debtor) on 19.07.2008 for creation of equitable mortgage over the land to avail financial assistance.
2.RIICO vide its letter dated 01.12.2015, cancelled the lease deed. The Corporate Debtor challenged the said order by way of an appeal provided under Rule 24(2) of the RIICO Disposal of Land Rules, 1979 before the Managing Director of RIICO which was dismissed on 19.05.2017 and second appeal was also dismissed on 16.03.2018.
3.Account of the Corporate Debtor in the meantime was declared as Non-performing Asset (NPA) and proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) were initiated. Symbolic possession was taken on 09.03.2017. Axis Bank executed an assignment agreement in favour of Asset Care & Reconstruction Enterprises Ltd. (ACRE) on 27.03.2017 who sent a letter on 08.06.2018 to the unit head of RIICO for restoration of allotment, cancelled on 01.12.2015. The said letter was rejected on 27.06.2018 and ACRE challenged that order dated 27.06.2018 by way of an appeal before the Managing Director, RIICO which was dismissed on 03.06.2019. Second appeal was also dismissed.
4.ACRE filed an application under Section 7 of the Code which was admitted on 26.04.2019. During the CIRP various plan was submitted and in 14th CoC meeting, held on 19.10.2020, the CoC approved the final and revised plan of Express Resorts and Hotels Limited and RP filed application for approval of plan before the AA. In the meanwhile RP has allegedly received a notice dated 11.08.2021 on 17.08.2021 issued by the RIICO to handover the premises of hotel within 30 days which was challenged by way of Writ Petition (C) No. 9955 of 2021 before the High Court of Rajasthan, Jaipur which was disposed off with the liberty to approach AA and also filed I.A. No. 646 of 2021 under Section 60(5) of the Code which was also dismissed.
5.Appellant is challenging the order of AA rejecting the IA.
Issue: whether demised premises is the property of Corporate debtor?
Arguments:
For appellants:
1.Counsel for Appellant has submitted that it had entered into a Management Contract Agreement/Lease Agreement dated 01.04.2017 with the Corporate Debtor as per which the possession of the hotel handed over to it for its operation for a period of seven years commencing from 01.04.2017 to 31.03.2024 and it is alleged that RIICO had taken over the possession of the property in question on 20.09.2021. As a matter of fact, the Appellant has prayed for repossession.
For respondents:
1.RIICO has taken a stand that the Appellant has no locus standi to file application because RIICO has never entered into an agreement with the Appellant and that the action taken by RIICO was against the Corporate Debtor for the breach of terms and conditions of the lease deed and if the Appellant was aggrieved of loss caused then it may register its claim with the RP but cannot claim its damages from a third party i.e. from RIICO for the breach of contract by the Corporate Debtor and that under the lease deed, Corporate Debtor was given right of possession of the demise premises who had never approached RIICO for taking permission for creating third party rights.
Decision: Demised premises is not the property of the corporate debtor.
Rationale: Tribunal noted that Corporate Debtor had no right or interest in the demised premises much less for the purpose of creating a third-party interest by entering into an agreement of management with the Appellant on 01.04.2017. As a matter of fact, the Appellant is to sink or swim with the Corporate Debtor. Since, the Corporate Debtor, in its appeal, has not been found entitled to the protection of Section 14(1)(d) of the Code, therefore, there is no merit in the present appeal as well.
order:
