Nagri Farm Tea Co. Limited vs Ram Ratan Modi

NATIONAL COMPANY LAW APPELLATE TRIBUNAL,

PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No.2189 of 2024 (Arising out of Order dated 18.10.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Division Bench (Court-II), Kolkata in IA (IB) No.237/(KB)/2022 in CP(IB) No.184/(KB)/2018)

IN THE MATTER OF: Merico Agro Industries Pvt. Ltd. & Anr. ...Appellants

Versus

Ram Ratan Modi (RP of Duncans Industries Ltd.) ...Respondents

Present: For Appellants : Mr. Jishnu Saha, Sr. Advocate with Mr. Ushanath Banerjee, Mr. Avishek Guha, Mr. Ishaan Saha, Mr. Soumya Dutta, Advocates.

For Respondents : Mr. Joy Saha, Sr. Advocate with Mr. Amit Kasera, Ms. Urmila, Advocates for RP. Mr. Amar Dave, Sr. Advocate with Mr. Ashok Jain, Advocate for SRA.

With Company Appeal (AT) (Insolvency) No.2291 of 2024 & I.A. No. 8623, 8624, 8625 of 2024 (Arising out of Order dated 18.10.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Division Bench (Court-II), Kolkata in IA (IB) No.237/(KB)/2022 in CP(IB) No.184/(KB)/2018)

IN THE MATTER OF: Nagri Farm Tea Co. Ltd. ...Appellants

Versus

Ram Ratan Modi, (RP of Duncans Industries Ltd.) & Anr. ...Respondents

Present: For Appellants : Mr. S.N. Mukherjee & Mr. Ratnanko Benerji, Sr. Advocates with Mr. Kanishk Kejriwal, Ms. AshikaDega, Mr. Rahul Ahuja, Mr. Aayush Lakhotia, Ms. Sanchali Bhowmik and Mr. Sampurna Mukherjee, Advocates.

For Respondents : Mr. Joy Saha, Sr. Advocate with Mr. Amit Kasera, Ms. Kriti Gera and Ms. Urmila, Advocates for R-1.

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 1 Mr. Amar Dave, Sr. Advocate with Mr. Ashok Krumar Jain, Advocates for R-2.

JUDGMENT

ASHOK BHUSHAN, J.

These two Appeal(s) have been filed against the same order dated

18.10.2024 passed by National Company Law Tribunal, Division Bench

(Court-II), Kolkata approving the Resolution Plan in the Corporate

Insolvency Resolution Process ("CIRP") of the Corporate Debtor - Duncans

Industries Ltd.

2. Brief background facts giving rise to these two Appeal(s) are as follows:

i. The Corporate Debtor ("CD")- Duncans Industries Ltd. had been

running Tea Gardens in the State of West Bengal. Tea Gardens

were leased out to the CD and other Tea Companies by State of

West Bengal under West Bengal Acquisition Act, 1953.

ii. On an application filed by Financial Creditors, CIRP commenced

against the CD on 05.03.2020. The Resolution Professional

("RP") filed several IAs for taking possession of different Tea

Gardens. The applications filed by RP for taking possession of

different Tea Gardens were dismissed by Adjudicating Authority

by different orders commencing from 28.05.2021 to 18.07.2022.

Five Appeals being Company Appeal (AT) (Ins.) Nos.672 of 2021,

592 of 2022, 628 of 2022, 754 of 2022 and 907 of 2022 were

filed by the RP before this Tribunal, challenging order of the

Adjudicating Authority, rejecting the applications, by which

possession was sought of the various Tea Gardens.

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 2 iii. In the CIRP of the CD, Resolution Plans were invited and

Resolution Plan submitted by one Uniglobal Papers Pvt. Ltd.

was approved by the Committee of Creditors ("CoC").

iv. Five Appeals, which were filed in this Tribunal, were decided by

judgment of this Tribunal dated 02.08.2024. This Tribunal held

that the leases with regard to three Tea Gardens namely -

Kilcott, Garganda and Bagracott-I, were current on the day

when CIRP commenced and leases with regard to other Tea

Gardens having expired by efflux of time, only three Tea

Gardens with regard to whom leases are continuing are the

assets of the CD and the RP could take possession only of those

Tea Gardens, which are the assets of the CD. This Tribunal

vide order dated 02.08.2024 disposed of the Appeal. In

paragraphs 120 and 121, following was directed:

"Question No.9

120. In view of the foregoing discussions and conclusions, we held that leasehold rights of the Corporate Debtor subsist in three Tea Gardens, namely - Garganda, Kilcott and Bagracote, where the lease has been renewed and valid as follows:

Sl. Tea Estate Valid upto No.

1. Garganda 08.09.2026

2. Kilcot 23.08.2025

3. Bagarcote Div.I 22.05.2028

121. The orders rejecting the IAs of RP insofar as the aforesaid three Tea Gardens are concerned are unsustainable and deserve to be set aside. In view of the above, all the Appeal(s) are disposed of in following manner:

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 3 I. Company Appeal (AT) (Insolvency) No. 672 of 2021 is partly allowed. The order dated 28.05.2021 passed in IA No.1256/KB/2020 is partly allowed, insofar as Garganda Tea Garden is concerned. The order of the Adjudicating Authority with respect to other Tea Gardens, i.e., Hantapara, Tulsipara and Dumchipara is affirmed.

II. Company Appeal (AT) (Insolvency) No.593 of 2022 is partly allowed. Order dated 21.04.2022 in IA No.1111/KB/2021 set aside, insofar it relates to Tea Garden Kilcott. Rest of the order is affirmed.

III. Company Appeal (AT) (Insolvency) No.754 of 2022 is partly allowed. Order dated 09.05.2022 passed in IA No.665/KB/2021, insofar as it relates to Bagracote Div.I is set aside. Rest of the order is affirmed.

IV. Company Appeal (AT) (Insolvency) No.628 of 2022 and Company Appeal (AT) (Insolvency) No.907 of 2022 are dismissed.

V. It is held that Tea Gardens of Garganda, Kilcott and Bagracote are assets of the Corporate Debtor, to which the RP was entitled to be handed over the possession. However, in sequence of the events and facts that these three Tea Gardens having been run by Merico and Sammelan and in the Tea Gardens, thousands of workers are working, we are of the view that ends of justice will be served in holding that RP shall be deemed to be in possession of the aforesaid Tea Gardens and operation of these three Tea Gardens shall henceforth be under the supervision and control of the RP till the CIRP continues.

v. Challenging the orders of this Tribunal dated 02.08.2024,

several Civil Appeals were filed in the Hon'ble Supreme Court.

Three Appeals filed by the Appellant (Merico Agro Industries Pvt.

Ltd.), challenging order dated 02.08.2024. The Hon'ble Supreme

Court vide its order passed on 22.11.2024 dismissed all the

Appeals filed by the Appellant challenging order dated

02.08.2024. The Appellant in Company Appeal (AT) (Ins.)

No.2189 of 2024, claim to be in possession of Tea Gardens -

Kilcott, Garganda and Bagracott-I. The Principal Secretary and

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 4 LRC Land and Land Reforms, Refugee Relief and Rehabilitation

and Anr. also filed an Appeal, challenging order dated

02.08.2024, by which this Tribunal has held that leases of three

Tea Gardens are continuing. The Appeals filed by the State of

West Bengal were also dismissed on 27.01.2025 by the Hon'ble

Supreme Court.

vi. After order of this Tribunal dated 02.08.2024, application IA

No.IA (IB) No.237/(KB)/2022 filed by the RP for approval of

Resolution Plan submitted by Successful Resolution Applicant

("SRA") was heard. The Adjudicating Authority vide order dated

18.10.2024 approved the Resolution Plan submitted by

Uniglobal Papers Pvt. Ltd., which was approved by 99.20% vote

shares of the CoC.

vii. Company Appeal (AT) (Ins.) No.2189 of 2024 has been filed by

Merico Agro Industries Pvt. Ltd. & Sammelan Tea and Baverages

Pvt. Ltd. challenging order dated 18.10.2024. In the Appeal,

following prayers have been made by the Appellants:

"a) Set aside the impugned order dated 18 October, 2024 passed by the learned National Company Law Tribunal Kolkata Bench in IA (IB) No. 237/ (KB) /2022 in CP(IB) No. 184/( KB)/2018;

b) Leave be granted to the appellant to serve a copy of the instant appeal on the respondent;

c) Stay of operation of the order dated 18 October, 2024 passed by the Learned National Company Law Tribunal, Kolkata Bench in IA (IB) No. 237/ (KB) /2022 In CP(IB) No. 184/( KB)/2018;

d) Ad-interim order in terms of prayers above;

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 5

e) Costs of and incidental to this petition be caused in the cause;

f) Such further and/or other order/orders be passed as to this Hon'ble Tribunal may seem fit and proper."

viii. Company Appeal (AT) (Ins.) No.2291 of 2024 has been filed by

Nagri Farm Tea Co. Ltd. praying for following reliefs:

"a. The Impugned Order dated October 18, 2024, passed by National Company Law Tribunal, Kolkata Bench in CP (IB) No. 184/KB/2018, insofar as paragraph 18 relates to the Marybong Tea Estate deserved to be set aside;

b. Such other and/or further orders be passed as this Hon'ble Tribunal may deem fit and proper."

3. We need to proceed to notice the submissions raised by the learned

Counsel for the parties in these two Appeal(s) separately.

Company Appeal (AT) (Insolvency) No.2189 of 2024

4. We have heard Shri Jishnu Saha, learned Senior Counsel appearing

for the Appellant; Shri Joy Saha, learned Senior Counsel appearing for the

RP; and Shri Amar Dave, learned Counsel appearing for SRA.

5. Shri Jishnu Saha, learned Senior Counsel for the Appellants submits

that Appellants were given possession of various Tea Gardens, including the

Tea Garden - Kilcott, Garganda and Bagracott-I, who were running the said

Tea Gardens and were in possession. Against the order of this Tribunal

dated 02.08.2024, three Appeals (as noted above) were filed by the Appellant

before the Hon'ble Supreme Court, claiming rights with regard to Kilcott,

Garganda and Bagracott-I. The Adjudicating Authority while approving the

Resolution Plan has granted relief to the SRA and has directed "For the Tea

Gardens, where the Lease period has expired, it is open for SRA to make

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 6 application to the Lessor or if renewal application has already been made,

pursue the same." It is submitted that the said direction in the Resolution

Plan is prejudicial to the interest of the Appellant, who had been in

possession of various Tea Gardens. The Adjudicating Authority while

approving the Resolution Plan was not required to issue any direction with

regard to renewal of the leases, which had already expired and the said

direction is beyond the jurisdiction of the Adjudicating Authority. It is

submitted that by liberty granted by the Adjudicating Authority in paragraph

9.2.1 of the Resolution Plan, the SRA can claim right with respect to those

Tea Gardens, which are not assets of the CD as held by this Tribunal in

judgment dated 02.08.2024. There was no question of Adjudicating

Authority granting such relief to the SRA to pursue application for renewal of

leases, which stood determined by efflux of time, much prior to the

commencement of CIRP. Learned Counsel for the Appellants submit that

Appellants have no grievance on the approval of the Resolution Plan except

the above direction, which needs to be set aside.

6. Learned Senior Counsel for the RP opposing the submission of the

Appellant contends that Appellant has no locus to challenge the approval of

Resolution Plan. The Appellant was not a stakeholder in the CIRP of the CD

and the SRA, whose Resolution Plan has been approved is fully entitled to

pursue renewal applications, which have been filed for renewal of the leases

and the directions issued by Adjudicating Authority in the impugned order,

do not call for any interference. It is further submitted that the Appellant

has filed Appeals before the Hon'ble Supreme Court challenging order dated

02.08.2024 passed by this Tribunal, which Appeals have been dismissed by

the Hon'ble Supreme Court on 22.11.2024 and the Hon'ble Supreme Court

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 7 while dismissing the Appeals has held that Appellant has no locus-standi to

file Appeal against the order of this Tribunal. Learned Counsel for the RP

has also referred to the order of the Hon'ble Supreme Court dated

22.11.2024, where Hon'ble Supreme Court has noticed the submission of

the learned Counsel for the West Bengal that there is no lease granted in

favour of Merico Agro Industries Pvt. Ltd. and Sammelan Tea and Beverages

Pvt. Ltd.

7. Learned Counsel for the SRA has also refuted the submissions of

learned Counsel for the Appellants and submits that the Appellants have no

locus to file the Appeal. It is submitted that Merico and Sammelan even after

order dated 02.08.2024 are illegally continuing in possession of Tea

Gardens, which has been held to be assets of the CD. In the order passed by

the Adjudicating Authority, while dismissing the application filed by the RP,

liberty was granted to the RP to apply for renewal, which order having been

affirmed, there is no reason to interfere with the order.

Company Appeal (AT) (Insolvency) No.2291 of 2024

8. We have heard Shri S.N. Mukherjee, learned Senior Counsel appearing

for the Appellant; Shri Joy Saha, learned Senior Counsel appearing for the

RP; and Shri Amar Dave, learned Counsel appearing for the SRA.

9. Learned senior Counsel for the Appellant submits that the Appellant is

in possession of Marybong Tea Estate from 01.01.2004. It is submitted that

a MoU was entered between the Appellant and the Management of the CD,

under which the Appellant was given right to run the CD. The Appellant has

made payments amounting to more than Rs.6 crores. It is submitted that

further MoU was entered on 05.07.2013. It is submitted that the Tea

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 8 Garden Marybong has not been held to be the assets of the CD by judgment

dated 02.08.2024 and the Appellant, who is continuing in possession is

entitled to carry on his rights. It is submitted that Adjudicating Authority

committed error in issuing direction in paragraph 18 of the impugned order,

permitting the SRA to make an application for renewal of the leases and to

get possession, if granted. Learned Counsel further took exception to the

reliefs and concessions granted at paragraph 9.2.1. It is submitted that

there is no occasion to grant right to SRA to apply for renewal of leases, for

whose terms have already expired and the above blessing given to SRA is

prejudicial to the rights and interest of the Appellant. Learned Counsel for

the Appellant has also referred to the reliefs and concessions under

paragraph 9.8, which was not granted. The learned Counsel for the

Appellant has also referred to the Report of the Tea Board and submits that

Tea Board has also noticed that the Appellant is running the Tea Garden

Marybong and has incurred expenses.

10. The submissions of the Appellant have been opposed by both the

learned Counsel for the RP and the SRA. Same submissions have been

advanced by the RP and SRA, which we have noticed on their behalf in

Company Appeal (AT) (Ins.) No.2189 of 2024 (above), hence, need no

repetition.

11. As noted above, in the above Appeal(s), the Appellants are only

aggrieved by part of the order. In Company Appeal (AT) (Ins.) No.2189 of

2024, although in the prayers, the Appellant has prayed for setting aside the

order approving the Resolution Plan, whereas its main grievance is reflected

in paragraph 7(xl), which is as follows:

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 9 "7(xl). The appellants are accordingly aggrieved by the order impugned passed by the learned NCLT granting the relief sought by the SRA in clause 9.2.1 of the resolution plan by granting the SRA leave to make fresh applications or pursue any pending application seeking renewal of the remaining tea gardens, the lease of which granted to the corporate debtor or its predecessors in interest, stood determined prior to commencement of CIRP and on grounds dehors commencement of CIRP."

12. Paragraph 18 of the impugned order and paragraph 9.2.1 with respect

to which grievance have been raised by learned Counsel appearing for the

Appellants, need to be noted first. Paragraph 18 of the order directs as

follows:

"18. Therefore, we make it clear that apart from these three Tea Gardens, Two Tea Gardens whose freehold ownership has not been disputed namely Terai Land and Madarihat, the SRA will not be automatically be entitled to claim those as assets of Corporate Debtor. In regard to the rest of the Tea Gardens, for which lease period has expired or the Tea Gardens are in possession with others, SRA is free to take steps for renewal of the Leases and get the possession of the same, if granted. This is as per orders are passed by Hon'ble NCLAT dated 02.08.2024."

and in paragraph 9.2.1, which is under the heading "Reliefs &

Concessions sought" is as follows:

"Sl. Referred Reliefs & Concessions Our Status No. Clause sought for Inference

1) 9.1 Consents and approvals, authorizations etc.

2) Upon approval of this Whatever the Granted.

Resolution Plan by the immunity is Subject to our NCLT, all actions stated in granted is directions in this Resolution Plan shall be strictly under the para 18 deemed to be approved to Section 32A (supra) and make the Resolution Plan of the I&B other paras.

effective. Accordingly, any Code. action or implementation of

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 10 this Resolution Plan shall not be a ground for termination of any consents, approvals, leases & licenses, concessions, authorizations, permits or the like that has been granted to the Corporate Debtor or for which the Corporate Debtor has made an application for renewal or grant.

3) 9.2 Licenses/ Approvals/ Contractual Rights and Benefits

4) 9.2.1 The Resolution Applicant Whatever the Granted in has assumed that upon immunity is, accordance approval of this Resolution it is granted with law to the Plan by the NCLT all strictly extant subsisting consents, under permissible. licenses, approvals, rights, Section 32A For the Tea entitlements, benefits and of the I&B Gardens, privileges whether under Code. where the law, contract, lease or Lease period license, granted in favour of has expired, it the Corporate Debtor or to is open for which the Corporate Debtor SRA to make is entitled or accustomed to application to (whether applied for renewal the Lessor or if by the Corporate Debtor or renewal not) shall, notwithstanding application any provision to the has already contrary in their terms, be been made, deemed to continue without pursue the disruption for the benefit of same." the Corporate Debtor for a period of 96 months and till such time, the Resolution Applicant will apply for fresh licenses.

13. As noted above, the Appellant in Company Appeal (AT) (Ins.) No.2189

of 2024 has also claimed to be in possession with regard to Tea Gardens,

which are not held to be assets of the CD. The Appellant - Nagri Farm Tea

Co. Ltd. claims possession of Marybong from 01.01.2024, which was also

not held to be the assets of the CD. The grievance, which has been

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 11 advanced by the Appellant with regard to order of the Adjudicating

Authority, where the Adjudicating Authority observed:

"For the Tea Gardens, where the Lease period has expired, it is open for SRA to make application to the Lessor or if renewal application has already been made, pursue the same."

14. When we look into paragraph 18, what the Adjudicating Authority has

said "SRA is free to take steps for renewal of the Leases and get the

possession of the same, if granted". Similarly, in paragraph 9.2.1, the

Adjudicating Authority has directed, "it is open for SRA to make application to

the Lessor or if renewal application has already been made, pursue the

same".

15. Shri Joy Saha, learned Senior Counsel for the RP submitted that CD

had applied for renewal for Tea Gardens, where leases have expired, but

State of West Bengal has not taken any decision on the renewal of the leases

and those application are pending for last several years.

16. In view of the approval of the Resolution Plan, the SRA has come into

the shoes of the CD and when CD had applied for renewal of the leases,

where period of the leases had expired, no exception can be taken to the

direction of the Adjudicating Authority permitting the SRA to pursue the

renewal application or to file application where renewal application has not

been made. We, thus, are of the view that the prayers made on behalf of the

Appellant to set aside paragraph 18 and Clause 9.2.1 of the sub-paragraph

20 of the order, cannot be accepted.

17. We, however, are of the opinion that Adjudicating Authority while

approving the Resolution Plan or issuing direction contained in paragraphs

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 12 18 and 9.2.1 has to be treated not to have expressed any opinion with regard

to renewal of the leases, which is in the domain of State of West Bengal.

Only liberty to pursue the application was granted and the question of

granting renewal is in the domain of the State Government. The

Adjudicating Authority has not made any observation with regard to grant or

non-grant of renewal of leases. We, thus, only clarify that directions of the

Adjudicating Authority has to be treated, limited to right to pursue the

renewal application/ make an application for renewal and the Adjudicating

Authority has not have expressed any opinion on the merits of renewal

application, which is in the domain of State Government. Subject to

observations and clarifications as made above, both the Appeal(s) are

dismissed. Pending IAs, if any, are also disposed of. There shall be no order

as to costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical)

NEW DELHI

5th March, 2025

Ashwani

Company Appeal (AT) (Ins.) Nos.2189 & 2291 of 2024 13