The court established that a lease assignment was disputed, the lease had expired, and the resolution professional could not inspect the property without evidence of possession by the corporate debtor.

[Per: Barun Mitra, Member (Technical)]

• The present appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 (‘IBC’ in short) by the Appellant arises out of the Order dated 05.10.2023 (hereinafter referred to as ‘Impugned Order’) passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court-II) in I.A. No. 2990 of 2023 in CP (IB) 527/MB/2022. By the Impugned Order, the Adjudicating Authority dismissed the I.A. No. 2990 of 2023 filed by the Appellant seeking the setting aside of the notice dated 29.03.2023 served upon them by the Respondent - Resolution Professional wanting to inspect and access certain premises belonging to the Appellant. Aggrieved by this impugned order, the present appeal has been preferred by the Appellant.

2. Giving the factual matrix of the present matter, Ms Jayna Kothari, the Learned Senior Counsel for the Appellant submitted that the Appellant is the registered owner of ‘Regent Point’ building at Bangalore (hereinafter referred to as ‘subject property’). A lease deed had been entered into by the Appellant with M/s Food World Super Markets Pvt Ltd (hereinafter referred to as ‘FWSL’) on 19.07.2018 leasing out the subject property. The period of lease was deemed to have commenced on 01.06.2018 for a duration of 3 years and 5 months. The lease deed of the subject property had been allegedly assigned by FWSL to Future Retail Ltd (hereinafter referred to as ‘FRL’) by a Deed of Assignment dated 06.08.2018. After FRL was subsequently admitted into CIRP vide orders of the Adjudicating Authority on 20.07.2022 following which the Resolution Professional (‘RP’ in short) appointed for the conduct of CIRP sent a notice to the Appellant on 29.03.2023 seeking inspection and access to the subject property and the assets lying therein. Since the original lease deed had expired and there was no subsisting lease agreement with the Corporate Debtor, the Appellant filed an IA 2990/2023 before the Adjudicating Authority to set aside the notice of the RP. However, the Adjudicating Authority refused to direct withdrawal of the notice of the RP and dismissed the IA 2990/2023. Aggrieved with the impugned order, the present appeal has been preferred.

3. The Learned Senior Counsel for the Appellant making further submissions vehemently contended that the lease was never assigned to FRL. It was contended that in terms of Clause 14.7 of the Lease Deed, any act of transfer or assignment of the lease deed could have been done by the FWSL only after providing prior written intimation to the Lessor. However, the Appellant was never kept informed of any such Deed of Assignment purportedly entered into between FWSL and FRL. Claiming that no assignment of the lease deed to the Corporate Debtor had occurred, it was asserted that Corporate Debtor therefore had no rights or interest in the said Lease Deed and the subject property. Furthermore, as the Lease Deed in respect of the subject property with FWSL had already expired prior to the commencement of CIRP, the RP had no authority to issue any notice for inspection of any inventory or assets in the subject property. It was further claimed that the subject property was not the asset of the Corporate Debtor and that it was in the vacant possession of the Appellant in their capacity as the owners. FWSL had already vacated the store and cleared all inventory. In such circumstances, when the property had been vacated nearly four years back and the store being completely non-operational and the lease having lapsed prior to commencement of CIRP of FRL, the notice of inspection issued by the RP was not maintainable under Sections 14, 18 or 25 of the IBC and ought not to have been allowed by the Adjudicating Authority.

4. Rebutting the arguments advanced by the Appellant, the Learned Counsel for the Respondent submitted that the rights of FWSL under the Lease Deed had been validly assigned to the Corporate Debtor in terms of Clause 14.7 of the Deed