T-Rmc Private Limited vs Mr Niraj Agarwal Resolution ...

National Company Law Tribunal, Kolkata Bench, Kolkata

(hereinafter referred to as 'Adjudicating Authority'). For better

appreciation it is appropriate to reproduce the impugned order:-

"1. This Interlocutory Application being IA (IB) No. 107/KB/2021 has

been filed by Mr.Niraj Agrawal, Resolution Professional/Applicant under

section 45 readwithsection49 of the Insolvency and Bankruptcy Code,

2016 along with Rule 11 of the National Company Law Tribunal Rules,

2016 for the following reliefs:-

a. That this Adjudicating Authority be pleased to allow the present

application;

b. An order be passed declaring the so called agreement dated

26.07.2019 between the Corporate Debtor and T-RMC Private Limited as 3

void and reverse the effect of such transaction in accordance with the

provisions of the Code;

c. An order be passed directing Respondent No. 1 (T- RMC Private Limited)

to immediately vacate the said land (parcel of land

admeasuring2.209acresin RS Dag No. 3203, 3205, 3206, and 3208 lying

and situated at Narayanpur, Mouza and P.O. R-Gopalpur, P.S. Rajarhat,

District-24- 3 Parganas (North), West Bengal out of which 1.90 acres is

occupied by Respondent No.1) transferred as part of the transaction and

the same be vested in the Corporate Debtor;

d. An order directing the respondents not to obstruct the sole and

exclusive physical possession of the said land by the RP, the Applicant

herein; Direction upon the local district administration being the of icer-

in-charge of concerned police station Rajarhat a SRCM Road, Rajarhat

and Bidhannager Police Commissionerate, to give proper assistance to

the Applicant in taking possession of the said land so as to discharge his

duties under the Code in furtherance of the CIRP of the Corporate Debtor;

An order be passed directing and/restricting to remove any material or

assets which is kept at the said land of the Corporate Debtor;

e. An order directing the respondents to pay Rs. 292.40 lakhs in respect

of benefits received by T-RMC Private Limited from the Corporate Debtor

during the period from 27.07.2014 to Insolvency Commencement

Dateon18.03.2020, to the Resolution Professional;

f. An order under section 49 of the Code restoring the position as it existed

before any so called rent agreement was entered into as if the transaction

has not been entered into;

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g. Such other order providing relief under section 49 of the Code

protecting the interests of the creditors of the Corporate Debtor including

Vijaya Bank (now Bank of Baroda) who are victims of such transaction;

2. This Interlocutory Application being IA (IB) No. 1302/KB/2020 has

been filed by Mr.Niraj Agrawal, Resolution Professional/Applicant under

section 18(1)(f)(ii) read with section 25(2) and 60(5)of the Insolvency and

Bankruptcy Code, 2016 and under Regulation 30 of the Insolvency and

Bankruptcy Board of India ( Insolvency Resolution Process for Corporate

Persons) Regulation, 2016 for the following reliefs;

a. An order be passed directing the respondent to obey the order

dated18thMarch, 2020 passed by this Adjudicating Authority in C.P.(IB)

No.438/KB/2020 towards its implementation;

b. An order directing the respondent not to obstruct the sole and exclusive

physical possession of the said property by the RP, the applicant herein;

c. Direction upon the local district administration being the officer-in-

charge concerned police station Rajarhat at SRCM Road, Rajarhat

Bidhannagar Police Commissionerate, to give proper assistance to the

applicant in taking possession of the said property so as to discharge his

duties under the Code in furtherance of the CIRP of the Corporate Debtor;

d. An order be passed directing and/restricting to remove any material

or assets which is kept at the said property of the Corporate Debtor; 3.

Both these applications are being disposed of by way of this common

order.

4. The underlying company petition in CP (IB) No.438/KB/2018 was filed

by Vijaya Bank against Castal Extrusion Private Limited, the Corporate 5

Debtor, undersection 7 of the Insolvency and Bankruptcy Code 2016 ("the

Code" or "IBC") which was admitted vide order dated 18.03.2020 in CP

(IB) No. 438/KB/2018.

5. Initially, the Applicant/RP (Reg. No. IBBI/IPA-001/IP-P00130/2017-

18/10272) was appointed as the Interim Resolution Professional. He

was later confirmed as the Resolution Professional of the Corporate

Debtor at the first meeting of the Committee of Creditors (CoC) on

18.08.2020, adjourned and concluded on 19.08.2020.

6. The IRP made public announcements on 20.03.2020 in Business

Standard(English)and Ekdin (Bengali) newspapers regarding initiation of

CIRP and called for proof of claims from the financial and operational

creditors, workers and employees of the Company in the specified forms

till 01.04.2020.

7. The RP has filed these two interlocutory applications being I.A. (IB)

107//KB/2021andI.A. (IB) 1302//KB/2020 IN C.P. (IB) No.

438/KB/2018 seeking eviction of T-RMC Private Limited from the

land/premises of the Corporate Debtor inter alia on the ground that the

Corporate Debtor had entered into purported tenancy agreements in

favour of T-RMC at a grossly undervalued monthly rent of Rs.55,000/- to

defraud the secured creditors and to create third party interest after

issuance of Notice under SARFAESI by the Secured Creditor.

8. In support of the said two interlocutory applications, the RP has argued

that -

(a) Castal Extrusion Pvt. Ltd. ("CEPL"), the Corporate Debtor ("CD"), had

provided Corporate Guarantee on 06.05.2013 securing repayment of the 6

loan availed by Tantia Construction Limited ("TCL") from Vijaya Bank

(now Bank of Baroda). Due to failure by TCL to meet its liability, the

Financial Creditor ("FC") invoked the Corporate Guarantee. In March

2018, the FC had filed an application u/s7of IBC,2016 against CEPL.

The said application was admitted on 18.03.2020 directing insolvency

commencement in respect of CEPL and Applicant was appointed as

Interim Resolution Professional ("IRP"), later confirmed as the Resolution

Professional ("RP") in the first Committee of Creditor ("CoC") meeting

dated 18.08.2020 and concluded on 19.08.2020).

(b) The principal asset of CEPL is an industrial freehold land

admeasuring 2.209 acre comprised in Plot Nos. R.S. 3205, 3206, 3208

and 3203/4633 situated at Mouza-Gopalpur, J.L. No. 2, P.S. Rajarhat, in

the district of 24 Parganas (North) 5 within Rajarhat-Gopalpur Municipal

Corporation (the "subject land"), which was furnished as security for

repayment of the financial debt of TCL being the Corporate Guarantor of

TCL.

(c) Records of the Corporate Debtor revealed that much after filing the

said application u/s 7 of IBC, 2016 before this NCLT for initiation of the

Insolvency Proceedings, CEPL had entered into a purported unstamped

& unregistered Rent Agreementon26.07.2019 with one T-RMC Pvt. Ltd.

(T-RMC), whereby a leaseholdinterestover1.90 acres out of 2.209 acres

was created in favour of T-RMC for a period of 5yearsat a monthly rent

of Rs.55,000/- (Rupees Fifty five thousand only). It further appears from

the records that the said Agreement was preceded by another 7

unstamped and unregistered Rent Agreement dated 27.07.2014 on

identical terms, which expired on 26.07.2019.

(d) The T-RMC claimed to be in possession of the said area of the subject

premises since 27.07.2014. It is pertinent to note that both the above

agreements were envisaged to be determinable prior to expiry of the

terms thereof.

(e) It is evident from the claim filed by Vijaya Bank in Form C that the

principal borrower TCL's account with Vijaya Bank was declared as "Non

Performing Asset"("NPA") in the first quarter of 2014, and subsequently,

a notice under Section13(2)of the Securitisation and Reconstruction of

Financial Assets and Enforcement of Security Interest Act, 2002

(hereinafter "SARFAESI Act") was issued by the bank on 10.03.2014 for

enforcement of the security interest held over the subject land.

(f) The purported tenancy was created in favour of T-RMC on 27.07.2014,

i.e. after receipt of notice under Section 13 (2) of SARFAESI Act, and 4

days prior to receipt of notice dated 01.08.2014 under Section 13 (4) of

SARFAESI Act, and as such, in patent derogation & contravention of the

bar under Section13(13) of the SARFAESI Act. No NOC was sought from

the FC prior to creation of the lease over the subject land, and the said

purported Rent Agreements falsely mentioned that the said land was free

from all encumbrances in any manner whatsoever.

(g) By way of the present applications, RP sought to assail the purported

tenancy entered into by and between the CD and T-RMC under, inter alia,

the provisions of Section 45 and 49 of the Insolvency and Bankruptcy

Code, 2016 ("IBC" and/or the "Code"). The RP submitted opined that the 8

purported lease was created(i) to defraud the creditors so as to keep the

subject land beyond the reach of the creditor of the CD and (ii) at a gross

undervalued, and therefore constitutes a transaction defrauding the

creditors within the meaning of Section49of IBC and an "undervalued

transaction" within the meaning of Section 45 (2) of the IBC. To audit and

confirm such apprehended PUFE transaction as per the Code, the RP had

appointed Chartered Accountant to conduct Transaction Audit of the

books of accounts of the CD on 09.10.2020. The said Transaction Auditor

submitted its Report on 23.12.2020 confirming undervalued transaction.

(h) As per the Audit Report, the fair rent of the said land was determined

at Rs. 4.85lakhs per month against Rs.55,000/- per month as stipulated

& charged under the Rent Agreement. It has been pointed out that the

period beginning from18.03.2018to 17.03.2020 falls within look back

period u/s. 46(1)(ii) of the Code for the purpose of Section 45 of the Code,

resulting in the undervalued transaction of Rs.1.032crore for the period

under reference.

(i) The present proceeding for declaring the said agreement between CD

and Respondent void, and reverse the effect of such transaction under

the Code, owing to the same being an undervalued transaction

perpetuated with malafide intention to defraud the secured creditors, by

keeping the asset beyond their reach.

(j) The impugned transaction vide 2014 Agreement was covered within

the purview of Section 46 (1) (ii) of IBC.

(k) The RP has further contended that It has been brought on record by

the RP that at the relevant time of execution of the 2014 Agreement, the 9

CD and T-RMC were related parties within the meaning of Section 5

(24)(d) of IBC. This is since Harshvardhan Tantia, one of the promoters of

both the CD and T-RMC, was a director of T-RMC and held more than 2%

shares in the CD at the time of the execution of the purported 2014

Agreement. In this regard, the RP has drawn our attention to the following

relating to Shareholding pattern:

 Shareholding of T-RMC in FY 2014-15 at page 43 of the Application

states that Harshvardhan Tantia held 50% shares of and in T-RMC at

the relevant date.

 Shareholding of CD in FY 2014-15 at page 107, Application:

Harshvardhan Tantia personally held 6.22% shares of and in the CD at

the relevant date at the time of execution of the 2014 Agreement.

 Details of appointment and resignation of Harshvardhan Tantia from T-

RMC (Form No. DIR-11) at pages 105-106: Harshvardhan Tantia was the

director of T-RMC since 17.07.2014 to 14.03.2016.

(l) The said tenancy arrangement was subsisting, and being acted upon,

as on 18.03.2018, i.e. two years preceding the date of insolvency

commencement.

(m) Accordingly, the arrangement pursuant to the 2014 Agreement was

continuing within 2 years preceding the Insolvency Commencement Date,

18.03.2020, and as such, falls within the purview of Sections 46 (1) (ii)

of IBC.

(n) The valuation report submitted by the RP shows that the fair monthly

rent should have been Rs.4.85 lakh instead of Rs.55,000/- and as such

there was a shortfall of Rs.4.30 lakh per month.

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9. The RP has further submitted as under referring to various provisions

of the CODE and Judgments:

(a) The impugned transaction of the subject land of the CD has been

divested to T-RMC by way of the purported Agreement was a transaction

to defraud the secured creditor having a security interest over the subject

land.

(b) The said transaction was undertaken in the following backdrop:

 The principal borrower TCL, defaulted to repay the loan to Vijaya Bank

as a result of which the loan account was declared as NPA on

10.03.2014.

 The CD was the Corporate Guarantor of TCL and had furnished the

subject land as security for repayment of TCL's loan to Vijaya Bank.

 At the relevant time, CD was under the common control and

management of the Tantia Family, the promoters of TCL, the principal

borrower.

 Upon declaration of TCL's account as NPA, the creditor issued notice

under Section 13(2) of SARFAESI Act on 10.03.2014.

 Soon after issuance of the notice under Section 13(2) of the SARFAESI

Act, T-RMC (initially named Tantia RMC Pvt. Ltd.) was incorporated

on17.07.2014, wherein Harshvardhan Tantia was its director having

50% shareholding therein.

 Immediately upon incorporation of T-RMC, the purported Agreement

was entered into by and between CD and T-RMC on 26.07.2014, where

by possession of 1.90 acres out of the total 2.209 acres of the subject 11

land was divested to T-RMC. The said Agreement misrepresents that the

subject land was "free from all encumbrances in any manner

whatsoever.

(c) It would be evident from the above course of event that the impugned

arrangement was created with a motive to encumber the subject land

post-receipt of a Section 13(2) notice with the sole mala fide intention of

defrauding its creditors by keeping the said asset out of the clutches of

Vijaya Bank.

(d) The purported transaction was in patent derogation and contravention

of Section13(13) of SARFAESI Act, rendering such transaction a nullity

and void abinitio as held by the Hon'ble Apex Court in the matter of

Bajrang Shyamsunder Agarwalv.Central Bank of India, (2019) 9 SCC 94

@ prs. 12, 19-20, 24, 32.

(e) It is also pertinent to note that claim of tenancy to safeguard

possession in the face of proceeding under SARFAESI Act, without any

registered instrument creating such tenancy, is considered impermissible

and such purported tenant without any registered instrument creating

tenancy is considered to be a "tenant at sufferance" akin to a trespasser

who has no right to possession of the property.(Bajrang Shyamsunder

Agarwal v. Central Bank of India (supra.), @pr.20[quoting Harshad

Govardhan Sondagar v. International Asset ReconstructionCo. Ltd.,

(2014) 6 SCC 1 @ pr. 36.]; confirmed in Hemraj Ratnakar Salianv.HDFC

Bank Ltd. And Ors., 2021 SCC OnLine SC 611 @ prs. 12-13).

(f) The look back period stipulated under Section 46(2) of IBC does not

apply for impugning a transaction under Section 49 of IBC as held by the 12

Hon'ble Apex Court in Aditya Kumar Tibrewal v. Om Prakash Pandey,

2022SCCOnLineNCLAT 142 @ pr. 12 (iv)-(vii), p. 12-14.

(g) The purported undervalued lease created in favour of T-RMC

constitutes a transaction for "transfer of one or more assets of the

corporate debtor attracts the provision of Section 45 (2) of IBC.

(h) The impugned lease arrangement was created at a gross undervalue

considering the value of the land and the expected rate of return.

(i) The fair value of annual rent, arrived at on the basis of rate of return

on the current bank rate on G-Sec of 6.86% is found to be Rs. 4.85

Lakhs/Month, thereby leaving a shortfall of Rs. 4.30 Lakhs/ Month on

account of the undervalued transaction.

(j) The impugned transaction cannot be deemed to have been entered into

the ordinary course of the business of the CD as the CD is not a property

company earning revenue from the business of leasing/renting out its

premises. As such, any contention to the effect that an arrangement of

lease/tenancy in relation to its principal asset is a transaction in ordinary

course of the business of CD is a non-starter.

(k) A transaction designed to vest unwarranted benefit to a related third

party under common control of the promoters of CD can in no

circumstance fall within the exception to Section 45 (2) of IBC. Only a

bona fide transaction intended to enhance the value/ worth of the CD

without any taint of favour to any party could come within the purview

of the exception as held in by the Hon'ble Supreme Court of India in Anuj

Jain v. Axis Bank Ltd. & Ors., (2020) 8 SCC401@prs.28.2-28.6. 13

(l) The applications filed correctly within the purview of IBC and CIRP

Regulations for the following reasons:

 The IBC does not stipulate any timeline for filling an Application under

Sections 43 to 51 and/or Section 66 of the Code.

 The wordings of Regulation 35A of CIRP Regulations are not mandatory

but directory in nature. Accordingly, timeline stipulated under Regulation

35A of the CIRP Regulations are directory in nature and does not render

any application filed beyond the prescribed time frame to be invalid, non-

est and/or un-actionable. (Refer Aditya Kumar Tibrewal v. Om Prakash

Pandey, 2022SCC OnLine NCLAT 142 at paragraph 11 (xiii), page 11.

10. In counter to the submissions of the RP, the principal defence of the

Respondent T-RMC has been three-fold: (i) that the allegations have been

filed in contravention to the timelines stipulated under Regulation 35A of

the IBBI (Insolvency Resolution Process for Corporate Persons)

Regulations, 2016 ("CIRP Regulations"), (ii) the Transaction Audit Report

is erroneous in nature and should not be relied upon, owing to its

inconclusiveness, and (iii) the application is not maintainable

asthesaid26.07.2019 agreement is not a standalone agreement, merely

a renewal of the old Agreement from July 2014.

11. Upon perusing the documents filed by the RP, judgments referred and

considering submissions by the parties, it is ordered that the T-RMC

Private Limited and other entities, if there be any, is directed to remove

its establishment along with all its employees, staffs, officers, workmen

engaged by them including all its machineries from the subject land/

premises of CEPL within 30 days from the date of approval of the 14

Resolution Plan and handover vacant peaceful possession of the

land/premises to the Resolution Applicant.

12. It is further directed that the Resolution Applicant shall not be in any

manner liable to take any responsibility and/or liability in respect of the

said T-RMC including its suppliers / contractors / vendors / employees

/ workers / staffs or any other entities whatsoever.

13. It is further directed that in the event the said T-RMC fails and/or

neglects to remove its entire set-up along with all officers, employees,

staffs and workmen engaged by them including all its machineries from

the subject land/premises of CEPL as stated above within the stipulated

period, the concerned District Administration, Police Authorities, Local

Authorities and all other Statutory Authorities to provide full co-operation

and assistance as may be required and sought for by the Resolution

Applicant.

14. Though the Valuation Report shows that the fair rent for the subject

land/premises of the Corporate Debtor should be Rs.4.85 lakh but for the

ends of justice, it is ordered that the said T-RMC shall make a further

payment to the Corporate Debtor at the rate of Rs.2,00,000/- per month

to be calculated from the date of creation of such tenancy in its favour till

the date of handing over peaceful vacant possession of the land to the

Resolution Applicant within the period stipulated above. In the event of

failure to make such payment within the stipulated period, the Corporate

Debtor and/or the Resolution Applicant shall be at liberty to claim and

realise mesne profit from T-RMC at such rate as may be reasonably

decided by the Corporate Debtor and/or the Resolution Applicant. The 15

Corporate Debtor and/or the Resolution Applicant shall be at liberty to

take appropriate step against T-RMC for their eviction and realisation of

the said dues in the event their failure to comply this order. The said I.A.

(IB) 107/KB/2021andI.A.(IB) 1302/KB/2020 are thus allowed with the

directions as above.

I.A.(IB)/429/KB/2022

15. This application has been moved by one Mahesh Kumar Khaitan,

applicant who sought a complete copy of all the Resolution Plans that had

been submitted by the prospective resolution applicants with the

Resolution Professional in the CIRP of the Corporate Debtor. It is

submitted that the Resolution Professional, however, had categorically

refused to provide a copy of the Resolution Plans on the ground that the

Resolution Plans have been placed before the CoC in its meetings and

since suspended board did not attend such meetings and that a

Resolution Plan has been approved by the CoC, which is pending for

approval before this Adjudicating Authority. Therefore, the applicant had

moved this application.

16. We have considered the submissions made by the applicant in the

application and heard the Ld. Counsel appearing for the applicant, we do

not find any substance in the application.

17. The Resolution Plan has already been approved by the CoC and the

application for approval has also been heard by this Adjudicating

Authority for its approval.

18. By way of separate orders, the said Resolution Plan has been

approved by this Adjudicating Authority. Therefore, I.A. 16

(IB)429/KB/2022 even otherwise has become infructuous and is

dismissed as such.

19. Certified copy of this Order be issued on demand to the concerned

parties, upon due compliance."

2. The appellant has pleaded that it was a tenant over an area

of 1.90 acres of land on the strength of lease agreement for five

years @ monthly rental of Rs.55000/-. The appellant has claimed

that it was engaged in business of manufacturing and supply of

ready mix concrete and employ more than 75 workers in the plant.

Initially on 27.7.2014 the appellant entered into a rental lease

agreement with Corporate Debtor. The appellant continued as

tenant and even before expiry of five years of the lease agreement,

subsequent lease agreement was executed on 26.07.2019 for

further period of five years. However, subsequently on the basis of

application filed under Section 7 of the IB Code by one Vijaya Bank

in CP(IB) No.438/KB/2018 the Corporate Insolvency Resolution

Process (CIR) was initiated with effect from 18th March, 2020

against Corporate Debtor who was land owner of the appellant. It

is the case of the appellant that even after commencement of CIRP

the appellant was regularly paying rent. However, on 8th October,

2020 a notice was issued by the Resolution Professional of Castal

Extrusion Pvt LTd (Corporate Debtor) calling upon the appellant to 17

vacate and deliver the peaceful possession of the premises upon

expiry of 15 days. It has also been claimed that even after issuance

of Notice on 8.10.2020 the Respondent/RP accepted the rent till

November, 2020. However, subsequently the acceptance of rent

was refused. It has been reiterated that the appellant is a tenant

in respect of the said land since the month of July, 2014. Besides

being tenant the appellant pursuant to publication of issuance of

Expression of Interest i.e. EOI, on 6th October, 2020 filed its EOI

as Potential Resolution Applicant alongwith others. Besides

tenant and potential resolution applicant, the appellant in view of

vacation notice issued by the RP also filed suit against the

Corporate Debtor vide TS No.511/2020 before the 1st Civil Judge,

Junior Division at Barasat and moved an application under Order

XXXIX Rules 1 and 2 read with Section 151 of the CPC praying for

interim temporary injunction. The Learned Civil Judge by its order

dated 27.11.2020 was pleased to restrain the Corporate Debtor

from disturbing peaceful possession of the appellant in respect of

subject land. The appellant in its pleading has stated that

sometime in November, 2020 the Respondent/RP filed an

application being IA(IB) No.1302/KB/2020 in CP(IB)438/2018

under Section 18(1) (f)(ii) read with Section 25 (2) and Section 60(5) 18

of IBC under Regulation 30 of IBBI (Insolvency Resolution Process

for Corporate Persons) Regulations, 2016 praying therein for

removal of the appellant of all materials or assets from 1.90 acres

of land in question which was replied by the appellant. It is further

case of the appellant that sometime in January, 2020 the

Respondent/RP filed another application being IA(IB)

No.107/KB/2021 in CP(IB) No.438/KB/2018 under Section 45

read with Section 49 of IBC alongwith Rule 11 of NCLT Rules, 2016

praying therein for order declaring that the agreement dated

26.07.2019 untenable and to reverse the transaction and direct

the appellant to vacate 1.90 acres of land and the land be vested

in the Corporate Debtor. Finally the impugned order was passed

which has been assailed in the present appeal. Alongwith the

present appeal the appellant has also brought on record copy of

lease rent agreement dated 27.7.2014 as well as lease rent

agreement dated 26.07.2019 vide Annexure A-2 and A-3

respectively.

3. Mr. Abhijeet Sinha, learned counsel for the appellant at the

very outset has argued that the impugned order passed by learned

Adjudicating Authority on a petition relating to under valued

transaction and another on eviction matter are not enable in the 19

eye of law. He submits that so far as under valued transaction is

concerned there is nothing on record to suggest as to how the rent

was treated as under valued. He by way of referring to Transaction

Audit Report which starts from Page 450 Volume 2 of

Memorandum of Appeal, submits that without any cogent reason

the auditor has disclosed as if in the premises in question

applicable monthly rental was Rs.4,85,000/-. No reason has been

assigned for coming to the conclusion of the higher rent. In sum

and substance it has been argued that once the appellant had

entered into lease rent agreement with Corporate Debtor/landlord

and agreed to pay monthly rental as Rs.55000/- the appellant

continued as tenant of the Corporate Debtor and such tenancy was

not required to be interfered with by the Adjudicating Authority.

He emphasised that for getting the appellant evicted from the

premises in question the proper course for the RP was to approach

the Court of Competent Jurisdiction instead of approaching the

Adjudicating Authority. Accordingly to Mr. Sinha the order

impugned is not sustainable in the eye of law is liable to be set

aside.

4. Mr. K.V. Balakrishnan, learned counsel appearing on behalf

of RP/R1 submits that occupying the premises/land of the 20

Corporate Debtor on the strength of unregistered rent lease

agreement which was for five years is nothing but it was with an

act to defraud the financial creditor and steps were taken in

conspiracy with one of the director of the Corporate Debtor. He

highlights that the first lease agreement was executed on

27.07.2014 i.e. after the account of the Corporate was declared as

Non Performing Asset (NPA) and just four days before the order

passed under Section 13(4) of SARFEASI Act. He further submits

that the lease agreement was for five years but it was not

registered. The lease agreement was signed on behalf of the

Corporate Debtor by one of its directors Mr. Jaydip Ghosh and on

the other hand on behalf of the tenant it was signed by one of its

director Mr. Harshvardhan Tantia. Mr. Harshvardhan Tantia at

the relevant time was also having shareholding in the Corporate

Debtor company. Mr. Jaydip Ghosh, who executed the lease rent

agreement was not authorised by the resolution of the Board of

Directors of the Corporate Debtor. According to Mr. Balakrishnan

the said lease rent was fraudulent agreement for the purpose of

illegal gain and an illegal loss to the financial creditor. He submits

that from the Transaction Report also it is evident that monthly

rent of Rs.55000/- was nothing for the land in question since in 21

the report the market rent has been assessed to the tune of

Rs.4,85,000/- per month. He has taken us to running page 473

which is part of the Transaction Audit Report.

5. Mr. P. Nagesh, Learned senior counsel appearing on behalf of

Respondent No.2, Successful Resolution Applicant has also

supported the impugned order and he has questioned the veracity

of the lease agreement. By way of referring to last but one para at

Page 474 Volume 2 i.e. Part of the Transaction Audit Report he

submits that the said land was mortgaged with the Bank. The

Corporate Debtor without seeking permission or intimation to the

Bank has entered into lease agreement with the appellant.

6. He has also taken us to both the rent agreements and

submits that first lease agreement was entered into after the

account of the Corporate Debtor was declared as NPA. Even

though application under Section 7 of the IBC was pending against

the Corporate Debtor, second lease agreement was executed in

between the appellant and Corporate Debtor on 26.07.2019 for

further period of five years. Both the lease agreement though were

for five years were only notarised not registered. He further

questioned that it is peculiar thing that in the month of July, 2014

when first lease agreement was entered the monthly rent was fixed 22

as Rs.55000/- and that rent continued for five years even before

completion of five years. On 26.07.2019, second lease agreement

was entered for further five years, however, monthly rent was fixed

at the same rent i.e. Rs.55000/-. According to Mr. Nagesh,

learned senior counsel since prima facie both the lease agreements

appear to be prepared fraudulently for unlawful gain to the

appellant as well as corporate debtor and causing unlawful loss to

the financial creditor, the appellant may not derive any right to

further continue with the possession of the land in question and

learned Adjudicating Authority has rightly passed the impugned

order. He also submits that besides dismissing the appeal it is a

fit case for imposition of exemplary cost on the appellant.

7. Ms Greeshma Beebireddy, learned counsel appearing on

behalf of Respondent No.3 submits Resolution Plan has already

been approved and commercial wisdom may not be interfered with.

She in support of her submission has placed reliance on (2021) 10

SCC 4021.

8. Of course in the present appeal written submissions have

also been filed by all the parties, however, considering the fact that

in another appeal which was filed by the Appellant i.e. Company

Appeal (AT)(Ins) No.861/2022 we have already taken note of two 23

rent agreements dated 27.07.2014 and 26.07.2019 which we have

considered prima facie as fraudulent documents and noticing the

same, we have directed for enquiry by the Delhi Police

Commissioner which judgement has been delivered only today i.e.

24th July, 2023, there is no need to go further in detail and this

appeal in terms of judgement passed in Company Appeal (AT)(Ins)

No.839/2022 and 861/2022 stands dismissed. In this appeal also

the appellant has placed on record two lease rent agreements vide

Annexure A-2 and A-3.

9. Let a copy of this order be also communicated to the Delhi

Police Commissioner for its needful with a direction to the learned

Registrar of this Tribunal to render full assistance and providing

necessary documents as and when approached by the Delhi Police

doing enquiry or investigation.

(Justice Rakesh Kumar) Member (Judicial)

(Dr. Alok Srivastava) Member (Technical) bm