The court established that the nature of challenge under Article 226 and the absence of jurisdiction could trigger the invocation of the High Court's jurisdiction. The court also clarified that the finalized claim of KMC can be the subject-matter of a Corporate Resolution Process under the IBC.

JUDGMENT

Sabyasachi Bhattacharyya, J. - The Kolkata Municipal Corporation (KMC), a statutory authority under the Kolkata Municipal Corporation Act, 1980 (hereinafter referred to as "1980 Act"), has filed the present writ petition challenging an Order dated December 17, 2019 passed by the National Company Law Tribunal (NCLT), acting as Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the IBC") for handing over physical possession of the office premises at 127A, Sarat Bose Road, Kolkata - 700 026.

2. The KMC, in exercise of its authority under Sections 217-220 of the 1980 Act, had distrained the said property in recovery of municipal tax dues from an assessee.

3. Subsequently, the debt of the assessee came within the purview of a Corporate Insolvency Resolution Process (CIRP), thus prompting respondent no.4, the Resolution Professional, representing the owner of the asset, to approach the NCLT for handing over of such physical possession of the property-in-question from the KMC. Such action gave rise to the present writ petition.

4. Learned senior counsel appearing for the petitioner, by relying on the 1980 Act, submits that the KMC is a statutory authority and, as such, took possession of the asset in exercise of its statutory powers. Such independent statutory exercise, it is argued, cannot be interdicted by the NCLT within the scope of the IBC.

5. It is argued, by placing reliance on Embassy Property Developments Pvt. Ltd. vs. State of Karnataka and others,2019 SCCOnLineSC 1542, that the powers of the NCLT, as Adjudicating Authority under Section 60 of the IBC, are circumscribed by the authority of the interim resolution professional, as contemplated in Section 18(f) of the IBC. In terms of Clause f(vi) of Section 18(1) of the IBC, it is contended by the petitioner, the control and custody of any asset to be taken by the interim resolution professional has to be subject to the determination of ownership by a court or authority. Since, in the present case, the writ petitioner is a statutory authority, the determination of ownership, by virtue of taking possession and subsequent attachment and sale of the property, falls within the exclusive domain of the writ petitioner. The exercise of power by the interim resolution professional has to be subject to such authority, it is argued.

6. Learned senior counsel further argues that, as held in Embassy Property (supra), the writ jurisdiction of this court under Article 226 of the Constitution can be invoked despite the availability of an alternative remedy, since the nature of the challenge pertains to lack of jurisdiction of the NCLT and not merely wrongful exercise of any available jurisdiction.

7. Learned counsel for respondent no.3 argues that, upon commencement of the Corporate Insolvency Resolution Process (CIRP), the National Company Law Tribunal (NCLT) passed an order dated January 17, 2019, lifting the attachment and directing the petitioner to hand over the registered office of the corporate debtor to the liquidation by an order dated January 31, 2020 (by which time the CIRP failed and liquidation commenced).

8. The impugned order dated January 17, 2019 it is argued, was passed by the NCLT within its jurisdiction. The IBC specifies that financial or operational creditors can file petitions before the NCLT. If the matter is admitted for CIRP, all attempts are made for a successful resolution, where the resolution applicant submits a plan for taking over the corporate debtor. If a plan is not submitted or does not get approval, the corporate debtor goes into liquidation. All debts of the corporate debtor are collated and paid, using the assets. Under Section 60(5)(c) of the IBC, any question of law or fact arising out of or in relation to the insolvency resolution or liquidation proceedings is to be decided by the NCLT.

9. Counsel argues that all issues pertaining to properties of the corporate debtor and rights or obligations