Jagdish Kumar Parulkar Liquidator vs M/S Indore Steel & Alloys Private ...

Company Appeal (AT)(Insolvency) No. 802 of 2022

[Arising out of the order dated 05.05.2022 passed by the Adjudicating Authority, National Company Law Tribunal, Indore Bench in IA /96(MP) 2021 and IA/04(MP)2022 in TP 127/2019 earlier registered as CP(IB) 34/2019]

IN THE MATTER OF:

Jagdish Kumar Parulkar, Liquidator for Kapil Steels Ltd. B-56, Wallfort City, Bhatagaon, Ring Road No.-1, Raipur, Chhattisgarh ...Appellant

Versus

M/s Indore Steel & Alloys Private Limited Through Directors Mr. Rajpati Ojha R/o 11, Sheshadri Colony Indore-452006 Mr. Anand Ojha R/o 11, Sheshadri Colony, Indore-452006 ...Respondent No.1

Subhash Kumar Jaiswal R/o 13/1, Pardeshi Pura, Indore, Madhya Pradesh-452002 ...Respondent No.2

Manish Malviya R/o 13/1, Pardeshi Pura, Indore, Madhya Pradesh-452002 ...Respondent No.3

M/s Rupendra Jaiswal Kumar 200, Sundar Nagar, Near Veena Nagar, Near Shrihari Public School, Indore, Madhya Pradesh - 452002 ...Respondent No.4

Company Appeal (AT)(Insolvency) No. 802 of 2022

1 Deleted as per NCLAT order dated 27.07.2022 ...Respondent No.5

Madhya Pradesh Industrial Development Corporation Limited Through Executive Director Rajendra Singh Bhanwar Regional Office, 1st Floor, Atulya IT Park, Near Crystal Park, Khandwa Road, Indore, Madhya Pradesh ...Respondent No.6

Present:

For Appellant: Mr. Aishvary Vikram, Ms. Mrinali Prasad, Advocates.

For Respondents: Mr. Vijayesh Atre and Ms. Bhakti Vyas, Advocates for R-1.

Mr. Karthik Sundar, Mr. Abhishek Singh, Mr. Abhishek Chaudhary, Mr. Aalak Kumar, Advocates.

JUDGMENT

[Per: Barun Mitra, Member (Technical)]

The present appeal filed under Section 61 of the Insolvency and

Bankruptcy Code, 2016 ('IBC' in short) by the Appellant arises out of the order

dated 05.05.2022 (hereinafter referred as 'Impugned Order') passed by the

Adjudicating Authority (National Company Law Tribunal, Indore Bench), in IA

/96(MP) 2021 and IA/04(MP)2022 in TP 127/2019 earlier registered as CP(IB)

34/2019. By the impugned order, the Adjudicating Authority disposed of both

Company Appeal (AT)(Insolvency) No. 802 of 2022

2 the applications and holding the application filed by the Liquidator of the

Corporate Debtor (the present Appellant) as void also directed not to disturb

the possession or interfere with the leasehold right of M/s Indore Steel & Alloys

Pvt. Ltd. (present Respondent No.1) and Tin shed on the leasehold land.

Aggrieved by this impugned order, the present appeal has been preferred by

the Appellant.

2. The brief factual matrix of the case which is necessary to be noticed for

deciding this appeal are as follows: -

 M/s Patni Carbides Private Limited ("PCPL" in short) had acquired

certain piece of industrial land admeasuring 10,219 sq. mtrs. at

lndustrial Plot No.36-C/1, lndustrial Area, Sector 3, Pithampur, Dist.

Dhar on lease (hereinafter referred to as the "subject land") from

Madhya Pradesh Industrial Development Corporation Ltd./Respondent

No.6 ("MPIDCL" in short). The Lease Deed was executed on 07.02.1987

for a period of 99 years.

 For obtaining the subject leasehold land, PCPL had secured a loan from

Madhya Pradesh Financial Corporation ("MPFC" in short) and as a

security mortgaged the subject land. PCPL constructed a Tin shed on

the subject land.

 PCPL defaulted in repaying the loan to MPFC. On account of default in

loan repayment by PCPL, the subject land was auctioned by MPFC

which resulted into sale of the subject land to M/s Kapil Steels Ltd.- Company Appeal (AT)(Insolvency) No. 802 of 2022

3 Corporate Debtor by way of a sale deed dated 23.02.2010 for a

consideration amount of Rs. 60,01,001/- only.

 The consideration amount was not paid by the Corporate Debtor but

paid by a third consenting party, M/s ACME Fero Alloys Pvt. Ltd. The

Corporate Debtor admittedly also did not get the lease deed executed in

its favour from MPIDCL.

 Certain disputes also arose between Corporate Debtor and MPFC

regarding payment of dues to MPIDCL in respect of the subject land

which led to filing of a Writ petition in 2012 by Corporate Debtor before

the Indore Bench of the Hon'ble High Court of Madhya Pradesh. The

Writ petition was subsequently dismissed as withdrawn on 10.08.2020.

The Writ petition and withdrawal application were both filed by

suspended management of the Corporate Debtor.

 A Section 7 petition under IBC was filed against Corporate Debtor on

10.12.2018. The Corporate Debtor was admitted into Corporate

Insolvency Resolution Process ('CIRP' in short) on 28.07.2020 and

subsequently brought under liquidation on 01.10.2021.

 The Corporate Debtor sold the Tin shed on the subject land on

01.02.2020 to M/s Powerage Towers Limited ("PTL" in short) by way of

a sale deed for a consideration amount of Rs.7,81,000/.

 Subsequently, a registered sale deed in respect of the Tin shed on the

subject land was executed by PTL with Indore Steel & Alloys Private

Company Appeal (AT)(Insolvency) No. 802 of 2022

4 Limited ("ISAPL" in short), present Respondent No.1 on 13.11.2020 on

payment of consideration of Rs.11,72,220/-.

 Further the MPIDCL after receiving the transfer charges and other

outstanding dues from ISAPL also transferred the leasehold rights in the

subject land for the remaining leasehold period to ISAPL/Respondent

No.1.

 IA No. 96/2021 was filed by Respondent No.1 against the present

Appellant/Liquidator of Corporate Debtor that they may not be

disturbed of possession and leasehold rights over the subject land along

with the Tin shed. Another application was filed vide IA No.04/2022 by

the Appellant before the Adjudicating Authority under Sections 43, 45,

49 and 66 of IBC seeking the reversal of the leasehold rights of the said

land along with Tin shed from Respondent No.1 to the Corporate Debtor.

 Having heard both the I.A.s stated above, the Adjudicating Authority in

the impugned order dated 05.05.2022 issued directions to the Appellant

not to disturb the possession or interfere with the title/lease hold rights

of Respondent No.1. Aggrieved with the impugned order, the present

appeal has been preferred by the Appellant.

3. Making his submissions, the Learned Counsel for the Appellant stated

that PCPL had acquired the subject land on lease from MPIDCL on which it

had constructed a Tin shed. Having taken a loan from MPFC and having failed

to repay the loan, the subject land had been sold in auction by MPFC to the Company Appeal (AT)(Insolvency) No. 802 of 2022

5 Corporate Debtor on payment of consideration amount of Rs.60,01,001/- only

and a sale deed was executed to this effect on 23.02.2010. It was claimed that

the Corporate Debtor had thus become owner of the subject leasehold land

including all structures standing on it. While admitting that the said sale deed

provided for registration of the subject land with the competent authority

within six months and that the Corporate Debtor had not complied to this

requirement, it was however pointed out that subject land continued to remain

in possession of the Corporate Debtor until February 2020 when the

suspended management of the Corporate Debtor sold the Tin shed to PTL for

Rs.7,81,000 only. It was submitted that the land and Tin shed which had been

bought by the Corporate Debtor for Rs.60,01,001/- in 2010 was sold to one of

its group entity - PTL, for only Rs.7,81,000/- thus being an undervalued

transaction.

4. It has been vehemently contended by the Learned Counsel for Appellant

that the sale transaction with one of its group entities, PTL, was carried out

by the suspended management of the Corporate Debtor with malicious intent

of giving preference to its related concern since a Section 7 IBC petition had

been filed against the Corporate Debtor on 10.12.2018 which was

subsequently admitted by the Adjudicating Authority on 28.07.2020.

5. It is further submitted by Learned Counsel for the Appellant that PTL

thereafter entered into a further sale transaction of the Tin shed with the

Company Appeal (AT)(Insolvency) No. 802 of 2022

6 Respondent No.1 for a consideration amount of Rs.40,00,000/-. It has been

contended that the very fact that Respondent No.1 had agreed to buy a

dilapidated Tin shed at a value of Rs.40,00,000/- which PTL had purchased

from the Corporate Debtor for only Rs.7,81,000/- shows that the Respondent

No.1 knew well in advance that the sale of the subject land will follow the sale

of Tin shed and that the Adjudicating Authority failed to look into this aspect

while passing the Impugned Order. Claiming that this was a pointer to the fact

that the suspended management abetted and assisted the illegal transfer of

the subject land, it was argued that this transaction attracted Sections 43, 45,

49 and 66 of the IBC.

6. Challenging the impugned order, it has been further submitted that the

Adjudicating Authority in the Impugned Order had wrongly placed reliance on

Clause 6 of the Sale Deed though MPIDCL had never invoked this clause and

had never cancelled the lease deed in respect of the subject land on grounds

of non-registration of sale deed within six months. It is also the contention of

the Appellant that the Adjudicating Authority had erroneously placed reliance

on Rule 19 of Madhya Pradesh State Industrial Land and Building

Management Rules, 2019 ("MP Rules 2019" in short) since this rule does not

envisage automatic cancellation of lease.

7. The Learned Counsel for the Respondent No. 1 refuting the submissions

of the Appellant contended that ISAPL had lawfully acquired leasehold rights

Company Appeal (AT)(Insolvency) No. 802 of 2022

7 over the said land in accordance with the MP Rules, 2019 and that it had paid

full consideration amount for the same to MPIDCL besides having separately

paid the consideration amount for the Tin shed to PTL. It has also been

contended that reference made by the Appellant to a chain of documents is

unfounded as the transfer of leasehold rights was done directly between

MPIDCL and ISAPL, for which purpose, lease deed with MPIDCL was executed

by ISAPL under the provisions of the MP Rules, 2019. It was further added

that under Rules 19 (B) and 19 (C) (iii) of MP Rules, 2019 since the Corporate

Debtor had not taken any action within the stipulated time period to execute

the lease deed for transfer of rights and hence the rights acquired by the

Corporate Debtor over the said land had automatically lapsed. Thus, the

subject land was in the possession of MPIDCL being the owner of the subject

land and hence the subsequent acquiring of leasehold rights by Respondent

No. 1 from MPIDCL was a bona fide transaction. Hence the transaction does

not fall within the rigours of Sections 43, 45, 49 and 66 of IPC.

8. The Learned Counsel for the Respondent No.6 submitted that

consequent upon the default in repayment of loan by PCPL to MPFC in respect

of the subject land under mortgage, the MPFC had assigned the lease-hold of

the subject land in favour of the Corporate Debtor by a sale deed dated

23.02.2010 for the remaining lease period. However, Clause 6 of the said sale

deed made the aforesaid assignment of lease-hold right a conditional one and

made it obligatory for the Corporate Debtor to seek approval of MPIDCL within

Company Appeal (AT)(Insolvency) No. 802 of 2022

8 six months of transfer. This not having been done, the right of the Corporate

Debtor over the land stood extinguished.

9. It was further pointed out that the Government of Madhya Pradesh had

notified the MP Rules, 2019 which provided under Rule 19(B) that transfer of

lease-hold rights would be effective only when MPIDCL executes a lease deed

in favour of the new allottee after receiving the entire outstanding dues of the

previous allottee. However, as the Corporate Debtor had failed to pay the

pending dues, the permission to transfer the subject land automatically

lapsed. On the other hand, the Respondent No.1 having executed a separate

sale deed with PTL for the Tin shed and having paid the entire demand raised

by MPIDCL vide their letter dated 11.11.2020 with respect to leasehold rights

of subject land, the MPIDCL had transferred the lease hold rights to the

Respondent No.1 for the remaining leasehold period by issuing a modified

lease deed in favour of Respondent No.1.

10. We have duly considered the detailed arguments and submissions

advanced by the Learned Counsel for the parties and perused the records

carefully.

11. The short point for consideration is whether the transfer of subject land

by MPIDCL to Respondent No.1 has been executed in accordance with law

and, if so, whether there is any merit in the claim of the Appellant that the

Company Appeal (AT)(Insolvency) No. 802 of 2022

9 transaction was not done in good faith but was a fraudulent and a preferential

transaction.

12. We find that the Adjudicating Authority has returned the finding that in

terms of the sale deed executed by MPFC in favour of the Corporate Debtor,

the latter was required to get the lease executed in its favor within a period of

six months from the date of execution of the sale deed failing which MPIDCL

would have the right to cancel the lease and allot the subject land to other

applicants. Cognizance has also been taken by the Adjudicating Authority of

MP Rules, 2019 providing for automatic cancellation of the lease if the

purchaser after purchase of the land fails to get the lease executed in its favor.

Holding further that the transaction carried out by the Corporate Debtor with

MPIDCL having become void on account of non-payment of dues and non-

registration of lease deed, it has also been observed that Respondent No.

1/ISAPL secured the leasehold ownership and possession over the subject

land directly from MPIDCL having executed a registered sale deed after

payment of full consideration and clearing all pending dues through banking

channels. The Adjudicating Authority has held that ISAPL has thus legally and

validly acquired leasehold ownership rights and possession over the subject

land directly from the MPIDCL and not from the corporate debtor. Holding that

ISAPL is the perpetual lessee of the subject land, the impugned order also

notes that this transaction between ISAPL and MPIDCL does not fall within

the purview of Sections 43, 49, and 66 of the IBC.

Company Appeal (AT)(Insolvency) No. 802 of 2022

10

13. For a holistic appreciation of the matter before us, it may be useful to

glance through the relevant provisions of the MP Rules, 2019 and the relevant

clauses of the sale deed in respect of the subject land as entered between the

MPIDCL, Corporate Debtor and the Consenting Party besides provisions

contained in the Registration Act, 1908 and Transfer of Property Act, 1882

which deal with registration of immovable property as reproduced hereunder:

Madhya Pradesh State Industrial Land and Building Management Rules, 2019 (MP Rules, 2019)

"19 C (iii) -The allotting authority will issue a 60 days demand letter

for payment of due amounts within 15 days from the receipt of the

prescribed complete application form for allotment of land. After

depositing the dues, the transferee shall obtain the original lease

deed from the transferor and submit the same along with the revised

lease deed before the allotting authority for execution. The allotting

officer will execute the revised lease deed within 7 days and hand it

over to the authorized person of the unit for registration of the lease

deed. The unit will be able to keep the original lease deed and original

copy of the modified lease deed with itself after registration and will

submit the certified copy to the concerned regional office, MPIDC. If

the transferee does not take action within the said time period, the

transfer permission will be automatically cancelled."

Company Appeal (AT)(Insolvency) No. 802 of 2022

11 Clause 6 of Sale deed

"6. The vendee hereby undertakes that he/she/they shall get the lease

of the land (leasehold) transferred in his/her/their name with the

respective DIC/MPAKVN within six months from the date of

Agreement/Execution and registration of the sale deed, failing which

the competent authority viz. DIC/AKVN reserves the right to cancel the

erstwhile lease and allot the said land to those applicant, who has

requirement of the same without any information to the vendee."

The Registration Act, 1908

"17. Documents of which registration is compulsory--(1) The

following documents shall be registered, if the property to which they

relate is situate in a district in which, and if they have been executed

on or after the date on which, Act No. XVI of 1864, or the Indian

Registration Act, 1866, or the Indian Registration Act, 1871, or the

Indian Registration Act, 1877, or this Act came or comes into force,

namely:--

(d) leases of immovable property from year to year, or for

any term exceeding one year, or reserving a yearly rent;"

Company Appeal (AT)(Insolvency) No. 802 of 2022

12 The Transfer of Property Act, 1882

"107. Leases how made. -- A lease of immoveable property from year

to year, or for any term exceeding one year, or reserving a yearly rent,

can be made only by a registered instrument.

All other leases of immoveable property may be made either by a

registered instrument or by oral agreement accompanied by delivery of

possession.

Where a lease of immoveable property is made by a registered

instrument, such instrument or, where there are more instruments than

one, each such instrument shall be executed by both the lessor and the

lessee:

Provided that the State Government may, from time to time, by

notification in the Official Gazette, direct that leases of immoveable

property, other than leases from year to year, or for any term exceeding

one year, or reserving a yearly rent, or any class of such leases, may be

made by unregistered instrument or by oral agreement without delivery

of possession."

14. It is the case of the Appellant that Rule 19(C)(iii) of MP Rules, 2019 only

deals with the automatic cancellation of transfer permission and not the lease

deed. It has been argued that if the successful purchaser fails to clear the

dues, only the permission to transfer gets automatically cancelled but not the

Company Appeal (AT)(Insolvency) No. 802 of 2022

13 lease deed. It was also added that there was a separate procedure laid down

for cancellation and this had not been followed by MPIDCL at any point of

time. We are of the considered view that this submission of the Appellant is

misconceived and deserves to be rejected. A plain reading of Clause 6 of the

Sale Deed supra clearly reveals that the Corporate Debtor was not only

required to have leasehold transferred in their name within the prescribed

time-period, but also ensure the registration of the sale deed. We notice from

the facts of the present case that the corporate debtor in spite of being aware

that it was under obligation to get the lease deed of 23.02.2010 executed in its

favour, failing which MPIDCL was free to further allot the subject land, never

got the lease deed executed by MPIDCL despite lapse of 10 years. Hence, in

terms of para 6 of the sale deed, the leasehold right of the corporate debtor

over the subject land had clearly lapsed. We do not find any mala-fide or

perversity on the part of Respondent No.6 in their understanding or

appreciation of MP Rules and application of Clause 6 of the sale deed executed

with the Corporate Debtor. In the given circumstances, MPIDCL being a wholly

owned subsidiary of the State Government of Madhya Pradesh and bound by

the MP Rules, 2019, there is no error in the findings of the Adjudicating

Authority that MPIDCL was fully authorized, being the owner of the subject

land, to execute the lease deed in favour of Respondent No.1.

15. Furthermore, a bare reading of the above-cited provisions of the

Registration Act, 1908 and the Transfer of Property Act, 1882 shows that any

Company Appeal (AT)(Insolvency) No. 802 of 2022

14 lease of immoveable property for a period exceeding one year can only be made

by way of a registered instrument mandatorily. The requirement of execution

of lease is not a procedural but a statutory requirement and undisputedly

applicable in the present transaction between MPIDCL and the Corporate

Debtor. Non-compliance thereto would render the transaction unenforceable

and in the light of the above, we find that the Adjudicating Authority has

committed no error in holding the transaction carried out by the Corporate

Debtor with MPIDCL with respect to the subject land having become void on

grounds of both non-payment of dues and non-registration of lease deed.

16. We also note from Annexure-I placed in reply affidavit of Respondent

No.6 that the Corporate Debtor had only deposited transfer charges of

Rs.10,59,817/-, while the MPIDCL had given them a demand letter on

15.06.2011 for the balance payment of Rs.20,49,216/- for effecting the

transfer of lease hold rights. The Corporate Debtor instead of paying the

outstanding consideration amount had chosen to file a writ petition before the

Hon'ble High Court of Madhya Pradesh disputing the said amount. The

payment of outstanding dues not having been done within the given time, the

limited rights of the corporate debtor over the subject land stood extinguished

by efflux of time. When the terms of the lease deed were violated by the

Corporate Debtor, the MPIDCL had full jurisdiction and authority to consider

and accept any proposal of executing a sale deed with another applicant as

per MP Rules, 2019. We therefore do not find any infirmity in the decision of Company Appeal (AT)(Insolvency) No. 802 of 2022

15 the Adjudicating Authority that the transaction carried out by the Corporate

Debtor with MPIDCL with respect to the subject land became void on account

of non-payment of dues.

17. It is the case of the Appellant that amendment to lease deed records the

chain of documents regarding transfer of rights from PCPL to Corporate Debtor

to PTL to ISAPL and hence the transfer of tin shed and subject land should be

viewed as a composite transaction. While it cannot be denied that the

transaction carried out with the Corporate Debtor does find mention in the

chain of documents leading to the execution of amended lease deed, but that

does not establish that the Corporate Debtor had acquired lease-hold rights

as the chain of transactions had broken since the lease deed was not executed

by the Corporate Debtor within the given time-limit. In the absence of a duly

executed/registered lease deed, the Corporate Debtor was therefore not

entitled to claim any ownership/leasehold right over the subject land. The

corporate debtor at best had only acquired ownership rights over the Tin shed

only which it sold to PTL on 01.02.2020.

18. We also note the submission made by the Learned Counsel for the

Respondent No. 1 that ISAPL had purchased the Tin shed from PTL on

13.11.2020 for which it had separately paid a consideration amount of Rs.

11,72,220/- only and for taking the subject land on lease it had separately

paid Rs. 38,09,748/- to MPIDCL. Thus, having paid the consideration amount

to MPIDCL directly and further having entered into a lease deed with MPIDCL

Company Appeal (AT)(Insolvency) No. 802 of 2022

16 on 02.12.2020, Respondent No 1 had legally and validly acquired leasehold

ownership rights and possession over the subject land directly from MPIDCL

and not from the corporate debtor. We therefore find no reason not to accept

the submission of Respondent No.1 on this score.

19. It has also been contended by the Learned Counsel for the Appellant it

is not MPIDCL which had cancelled the lease or re-auctioned on its own but it

was occasioned by a joint application filed by PTL and ISAPL before MPIDCL.

The role of suspended management in aiding, abetting and prompting the

transfer of subject land and that PTL was used by them as an illegal conduit

to commit fraud on the creditors of the Corporate Debtor has also been raised

by the Appellant. This has been vehemently contested by the Learned counsel

for the Respondent No. 6 on the grounds that action on the part of MPIDCL

being manifestly in consonance with the language of the sale deed, MPIDCL

was fully empowered under MP Rules, 2019 to execute the sale deed with the

Respondent No. 1 on their own and as such there being no requirement of any

such letter from PTL, it was asserted that the contention of the Appellant is

misplaced. We are inclined to agree with the contention of the Respondents

that the transaction between ISAPL and PTL related to purchase of Tin shed

while the transaction between ISAPL and MPIDCL was for lease rights over the

subject land and that both transactions were separate and not connected.

Company Appeal (AT)(Insolvency) No. 802 of 2022

17

20. It has also been contended by the Respondents that the fact that the

corporate debtor did not acquire ownership rights over the said land is

substantiated by the fact that the lease deed entered into between Respondent

No.1/ISAPL and MPIDCL was an amendment of the original lease deed of PCPL

dated 07.02.1987 for the remaining lease period. This clearly shows that

MPIDCL had never executed any lease deed in favour of the corporate debtor

or else it would have had to modify or amend the lease deed signed with them

and not with PCPL while transferring the leasehold rights for the remaining

period to Respondent No.1. We are thus satisfied with the findings of the

Adjudicating Authority that ISAPL had legally and validly acquired leasehold

ownership rights and possession over the subject land directly from the

MPIDCL and not from the corporate debtor.

21. This is validated by the fact that the Registration and Stamp

Department, Government of Madhya Pradesh in their communique, as placed

at Annexure A-13 in Appeal Paper Book while amending the lease deed

mentions change of name from PCPL to ISAPL and reads as under:

"And whereas the firm M/s lndore Steel & Alloys Pvt. Ltd. has now

requested to the lessor to change the Name & Products of the lessee

firm from M/s Patni Carbides Pvt. Ltd. to M/s s lndore Steel & Alloys

Pvt. Ltd. ln its records."

***** ****** ****** Company Appeal (AT)(Insolvency) No. 802 of 2022

18 Now therefore, the said lease deed, registered on 07.02.1987, has to

be amended and to be read as follows:

1. The Name of the Lessee shall be read as M/s Indore Steel &

Alloys Private Limited (CIN No. U27017MP2020PTC052214) in place

of M/s Patni Carbides Pvt. Ltd. in its record.

2. The lease period shall remain unchanged........."

22. This brings us to the contention of the Appellant that the ex-

management by not getting the name changed in the lease deed in favour of

the Corporate Debtor in 2010 used this fact as a loophole to transfer the

leasehold rights in favour of Respondent No.1 and that this amounts to

conducting fraudulent transaction. We are not convinced with this line of

argument. Liquidators under the IBC are assigned by the Court and are

undisputedly vested with sufficient authority to take into custody or control

all assets, property, effects and actionable claims of the Corporate Debtor and

also collect outstanding receivables including paying off bills and outstanding

debts. This includes the authority to commence investigations into the

Corporate Debtor's financial affairs for determination of preferential and

undervalued transaction as envisaged under Section 35(1)(ℓ) of IBC. The

Liquidator has therefore a fiduciary and legal responsibility to the Corporate

Debtor, the creditors and the Court. Be that as it may, the Liquidator being

an officer of the Court also has to display high level of professional maturity

Company Appeal (AT)(Insolvency) No. 802 of 2022

19 and a modicum of balance, fairness and restraint in the conduct of liquidation

process and is not expected to show overzealousness or overreach in detecting

traces of preferential/fraudulent/undervalued transactions in respect of

interest in the property owned by a person who has acquired such interest

from a public authority in good faith and for value. Since the Respondent No.

1 had secured the lease of the subject land from MPIDCL directly and in a

transparent manner hence it cannot be said to be putting any person in a

beneficial position or being prejudicial to the interests of the corporate debtor.

The negligence on the part of the Corporate Debtor not to have executed the

lease deed cannot be overlooked and cannot be allowed to become a ruse for

fraudulent transaction. Mere possibility of a potential collusion without

material on record is not sufficient to persuade this Bench to record any

finding on preferential or fraudulent transaction. The present transaction

between MPIDCL and the ISAPL/Respondent No. 1 not being illegal nor

suffering from any procedural or material irregularities, we are satisfied with

the findings of the Adjudicating Authority that it is not open to the Appellant

to unsettle or derail the transaction by raising the bogey of Section 43, 49 and

66 of IBC or to disturb the possession or interfere with the leasehold right of

ISAPL.

23. Considering the overall facts and circumstance of the present case, we

do not find any illegality in the impugned order of the Adjudicating Authority

which may warrant any interference in the exercise of our appellate

Company Appeal (AT)(Insolvency) No. 802 of 2022

20 jurisdiction. There is no merit in the appeal. The appeal is dismissed. No order

as to costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) Place: New Delhi Date: 21.03.2023

PKM

Company Appeal (AT)(Insolvency) No. 802 of 2022

21