M/S. Elica Hospitality Llp vs M/S. Rajasthan State Industrial ...

Through Partner Having its Registered Address At: 104, 1st Floor, Goldmine Jewel Complex, Beside D-Mart, Sector - 26, Gandhinagar Gujarat - 382 028 Mob: +91 9991168994 Email: jaitegan.law@gmail.com ...Appellant

Versus

RAJASTHAN STATE INDUSTRIAL DEVELOPMENT AND INVESTMENT CORPORATION LTD.

Through Managing Director Having Its Registered Address At: Udyog Bhawan, Tilak Marg, Jaipur, Rajasthan - 302 005, Email: riico@riico.co.in ...Respondent No. 1

MR. AMIT JAIN

Resolution Professional of M/s Neesa Leisure Limited 08th Floor, Building No. 10, Tower-C, DLF Cyber City, Phase - 2, Gurugram, Haryana - 122 002. Email: rpneesa@kpmg.com ...Respondent No. 2

Present: For Appellant: Mr. Udian Sharma, Ms. Vanshita Gupta, Advocates

Company Appeal (AT) (Ins.) No. 779 of 2022 2

For Respondent: Mr. Sumant Batra, Ms. Apoorva Choudhury, Adv. for R2

JUDGMENT

Per: Justice Rakesh Kumar Jain:

This appeal is directed against the order dated 31.03.2022 passed by

the Adjudicating Authority (National Company Law Tribunal, Ahmedabad,

Court No. II) by which an application bearing I.A. No. 676/AHM/2021 filed by

the Appellant in CP (IB) 127/AHM/2017 under Section 60(5) of the Insolvency

and Bankruptcy Code, 2016 (In short 'Code') seeking certain reliefs against

the Rajasthan State Industrial and Investment Corporation (RIICO) has been

dismissed.

2. Briefly stated, 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.

3. The Neesa Leisure Ltd. (Corporate Debtor) availed various loan facilities

from various Banks and developed a hotel under the name and style of

'Cambay Sapphire' over the land under the lease.

4. 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.

Company Appeal (AT) (Ins.) No. 779 of 2022 3

5. A second appeal filed by the Corporate Debtor against the order dated

19.05.2017 before the Chairman of RIICO was also dismissed on 16.03.2018.

6. The 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 by the

secured creditors 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.

7. The second appeal filed by ACRE against the order dated 03.06.2019

before the Chairman, RIICO which was dismissed on 30.07.2021.

8. ACRE filed an application under Section 7 of the Code before the

Adjudicating Authority against the Corporate Debtor which was admitted on

26.04.2019. R.D. Chaudhary was appointed as IRP. However, in the second

meeting of the Committee of Creditors (CoC) held on 24.10.2019. R.D.

Chaudhary was replaced by Mr. Amit Jain who was appointed as the RP and

was confirmed by the Adjudicating Authority on 17.12.2019. Various

resolution plans were submitted by the prospective resolution applicants

which were discussed and negotiated in the 12th, 13th and 14th CoC meetings

but in the 14th CoC meeting, held on 19.10.2020, the CoC approved the final

Company Appeal (AT) (Ins.) No. 779 of 2022 4

revised resolution plan submitted by Express Resorts and Hotels Limited

(Express) on 24.10.2020 by a majority of 67.85%. The RP has allegedly filed

an application bearing I.A. No. 851 of 2020 before the Adjudicating Authority

under Section 30(6) of the Code for approval of the Resolution Plan submitted

by Express Resorts which is pending adjudication. The 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 and also filed I.A. No. 646 of 2021 under Section 60(5) of the Code.

The writ petition was disposed of by the High Court on 18.09.2021 giving

liberty to the RP to approach the Adjudicating Authority to protect the

property in question.

9. It is pertinent to mention that the application bearing I.A. No.

646/AHM/2021, filed by the RP in which various prayers were made and

Section 14(1)(d) of the Code was invoked. The said application was dismissed

by the same impugned order dated 31.03.2022 against which the RP filed an

appeal bearing CA (AT) (Ins) No. 510 of 2022 which was heard and reserved

earlier than the present appeal.

10. In the present appeal, which has arisen from the dismissal of an

application bearing I.A. No. 676/AHM/2021 filed by the present Appellant.

The 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. It is

Company Appeal (AT) (Ins.) No. 779 of 2022 5

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.

11. On the other hand, 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. The application was dismissed by the impugned order in which

it has been observed that the agreement was entered into by the Corporate

Debtor with the Appellant after more than a year from the date of cancellation

of allotment on 01.12.2015. It has been held that the act of the Appellant,

entering into such an agreement and allegedly investing huge amount without

any due diligence with regard to status of the property cannot be accepted as

defence and that the Appellant might have a grievance against the Corporate

Debtor but cannot seek repossession of the demise premises which has been

taken into possession lawfully after termination of lease long back on

01.12.2015.

12. Although, Counsel for the Appellant has vehemently reiterated that the

stand taken by the Appellant before the Adjudicating Authority but the fact

remains that on 01.12.2015, after the cancellation of the lease deed, the

Company Appeal (AT) (Ins.) No. 779 of 2022 6

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.

13. Hence, in view of the aforesaid discussion, we do not find any reason to

interfere in the well-considered order passed by the Adjudicating Authority,

therefore, the present appeal is dismissed. No costs.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Kanthi Narahari] Member (Technical)

New Delhi

08th December, 2022.

Sheetal

Company Appeal (AT) (Ins.) No. 779 of 2022