JUDGMENT :

The petitioners, who have mortgaged their properties to secure the dues of M/s.Raihan Health Care Private Limited, have approached this Court seeking to quash Ext.P14 order of the National Company Law Tribunal, Kochi and to declare that properties of the petitioners included in Ext.P1 application stated to have been mortgaged to 1st and 2nd respondents as guarantors, are not liable to be included in the Liquidation Estate of the Company M/s.Raihan Health Care Private Limited.

2. The Company M/s.Raihan Health Care Private Limited obtained credit facilities from the 1st respondent-Union Bank of India and the 2nd respondent-Meenachil East Urban Co-operative Bank Limited. The petitioners mortgaged their properties to the Banks as guarantors.

3. The 1st respondent-Union Bank of India resorted to Insolvency and Bankruptcy Code, 2016 and initiated insolvency proceedings against the Company, approaching the National Company Law Tribunal. The Tribunal appointed the 3rd respondent as Liquidator. The Liquidator informed the Tribunal that landed property of 100.16 Ares mortgaged to the Bank is leasehold land of the Promoters/Directors of the Corporate Debtor. The lease was for a period of 99 years and was intended for construction of a Hospital. The lease deed empowered the Company to mortgage the leasehold land for obtaining advances from financial institutions.

4. Accordingly, the Company mortgaged the land to the Bank. Another 16.55 Ares of land inside the Hospital premises owned by the Promoters/Directors was used for Hospital utility services on implied lease. The said property was mortgaged to the Meenachil Urban Co-operative Bank. On an application filed by the Liquidator seeking to direct both the Banks to handover physical possession of the mortgaged leasehold lands of the corporate debtor for the purpose of including in the Liquidation Estate, both the Banks expressed their willingness to release the property. Thereupon, the Tribunal directed the Banks to handover physical possession of the mortgaged leasehold land of the corporate debtor, to the Liquidator in order to use as Liquidation Estate.

5. The petitioners thereupon approached this Court filing W.P.(C) No.3864/2021 and connected cases. This Court found that the Bank has security interests in the properties involved under two heads. The properties are held by the corporate debtor under a lease agreement which permits the corporate debtor to mortgage their leasehold rights for raising funds. Furthermore, the petitioners are sureties to the loan transactions of the corporate debtor and their title documents in respect of the properties are deposited with the Bank. This Court held that Liquidator can include the leasehold rights in the liquidation estate in view of Section 36(3) of the IBC. This Court doubted whether ownership rights of a property which are still with the petitioners, which stands mortgaged to the Bank can be included in the Liquidation Estate. After considering the facts of the case, this Court disposed of W.P.(C) No.3864/2021 and connected cases setting aside the order of the NCLT impugned therein to the extent it allows the Liquidator to add the mortgaged land of the petitioners into the Liquidation Estate. The NCLT was directed to pass orders afresh on the issue of inclusion of the said land in the Liquidation Estate in the light of the observations made in the judgment, after giving an opportunity of hearing to the petitioners.

6. The NCLT thereafter considered the issue and observed as follows:

21. We have heard the learned counsel appearing on either side and have thoroughly perused the records. As directed by the Hon'ble High Court, the liquidator impleaded the Personal Guarantors of the Corporate Debtor and they filed their counter affidavit and argued elaborately. Their main contention is that the liquidator cannot proceed against their properties, even though they have given to the Corporate Debtor on lease for constructions of the Doctors' qu