Ashok Kumar Sarawagi (Rp Of Kohinoor ... vs Yogesh Gupta (Liquidator Of Kohinoor ...

IN THE MATTER OF: Ashok Kumar Sarawagi (RP of Kohinoor Steel Pvt. Ltd.) ...Appellant Versus Yogesh Gupta (Liquidator of Kohinoor Power Pvt. Ltd.) ...Respondent

Present: For Appellant : Mr. M.C. Suri, Ms. Payal Godimar, Ms. Anjali Jain and Ms. Swati Sood, Advocates.

For Respondent : Mr. Abhay Anand Jena and Ms. Shraddha Sumar, Advocates.

ORDER

(Hybrid Mode)

26.07.2024 : Heard Counsel for the Parties.

2. This Appeal has been filed against an order dated 22.05.2024 passed

by the Learned Adjudicating Authority (National Company Law Tribunal,

Division Bench, Court - II, Kolkata) in IA (IB) No. 517/ (KB) /2021 in CP(IB)

No. 602/KB/2018, by which I.A. 517/2021 filed by the Resolution

Professional of M/s. Kohinoor Steel Private Limited (KSPL) has been rejected.

3. The KSPL is owner of the assets which has been leased out to another

Company M/s. Kohinoor Power Private Limited (KPPL). The KPPL is in

Liquidation since 04.10.2019. On 07.10.2020, RP of KSPL served an

Application being I.A. 1113/2020 filed by the Liquidator of KPPL for

acceptance of claim of Rs. 3.50 Crores thereafter KPPL issued a Notice dated 18.05.2011 for terminating the Lease which was granted on 18.05.2011.

Thereafter the Application was file seeking a direction for following reliefs:

"a. This Tribunal being the Adjudicatory Authority be pleased to pass appropriate order of declaration that the lease dated 16th May, 2011 stands terminated vide email dated 5th April, 2021 and hence the premises being a land admeasuring 4012.33 Decimal situated at Mouza Dhunaburu, Bansa, P.S Chowka, Police Station Chowka, Thana No 196 and 195 District Saraikhela- Kharsawan, Jharkhand does not form part of the liquidation estate of Kohinoor Power Private Limited;

b. Appropriate direction upon the liquidator of Kohinoor Power Private Limited Sri Yogesh Gupta to hand over vacant and peaceful possession of the land to Kohinoor Steel Private Limited acting through its Resolution Professional;

c. Injunction restraining the liquidator of Kohinoor Power Private Limited from dealing with/ encumbering/ creating any third party rights or interest over and in relation to the premises being a land admeasuring 4012.33 Decimal situated at Mouza Dhunaburu, Bansa, P.S Chowka Police Station Chowka, Thana No 196 and 195 District Saraikhela- Kharsawan, Jharkhand which is owned by the applicant herein;

d. Ad-interim orders in terms of prayers above; e. Such further or other order or orders be passed and/or direction or directions be made as to which this Hon'ble Tribunal may deem fit and proper;"

4. The Adjudicating Authority heard the Parties and after noticing the

terms and conditions of the Lease Deed took the view that Notice of

termination is not in accordance with the Lease Deed hence termination is

not valid.

5. Challenging the Order, Learned Counsel for the Appellant submits that

Notice was issued in Clauses 11.1 & 12.1 which permits the termination by

the Lessor on non-performance or non-observance of covenants or conditions

Comp. App. (AT) (Ins.) No. 1385 of 2024 2 of 4 contained under the Lease. He submits that rent was not paid from the very

beginning hence the Lessor had every right to terminate the deed.

6. Adjudicating Authority heard the Parties took the view that the Notice

which is relied by the Appellant is not in accordance with the Clauses of Lease

Deed. In paragraphs 21 & 22, the Adjudicating Authority made following

observations:

"21. We have noticed that the Clauses 7.7 which requires a time to be given to the Lessee to remedy the default, and Clause 12.1 which does not require a notice before Termination, rather talks of notice to terminate, are contradictory.

22. Be that as it may, leaving aside the contradictions, it is only just and proper that a notice is given before communicating termination of Lease, for such termination entails civil consequences (and non- pecuniary damages) therefore, elementary principles of natural justice and fair play have to be applied. As such the act of termination of Lease requires to be preceded by a notice."

7. We have looked into the Clauses 7.7 & 12.1 which have been quoted by

the Adjudicating Authority in paragraph 13 of the Impugned Order.

8. Learned Counsel for the Appellant submits that Para 12.1 fully protect

the Notice which was given by the Appellant.

9. When we look into the Notice, Para 12.1 it clearly says that by Notice to

the Lessee terminating the Lease provided the Lessee fails to remedy the

default. When the Clause itself contemplate remedy the default the

opportunity to remedy has to be given to the Lessee by the Lessor.

10. In the present case, Notice does not give any Notice to remedy the

default by the Lessee. Hence the Notice cannot be said to be in accordance

with Clauses of the Lease Deed.

Comp. App. (AT) (Ins.) No. 1385 of 2024 3 of 4

11. We thus while upholding the Order of the Adjudicating Authority grant

liberty to the Appellant to issue fresh Notice to the Lessee in accordance with

law.

With above liberty, we dismiss the Appeal.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) himanshu/nn

Comp. App. (AT) (Ins.) No. 1385 of 2024 4 of 4