The NCLT cannot evict tenants protected under the Rent Control Act through the Insolvency and Bankruptcy Code, as tenancy rights must be respected and due process followed.

JUDGMENT

Per: Justice Rakesh Kumar Jain:

This appeal is directed against the order dated 05.04.2024, passed by the National Company Law Tribunal, Mumbai Bench, C-IV by which an application bearing I.A No. 4632 of 2023 filed in CP (IB) No. 541/MB/2021, under Section 60(5) read with Section 25(2)(a) of the Insolvency and Bankruptcy Code, 2026 (in short ‘Code’) by the Resolution Professional (RP) of M/s Champalalji Finance Pvt. Ltd. (Corporate Debtor) against the present Appellants (Predecessor in interest of Late Shri Suresh Padmanabha Hegde) for a direction to handover the control and custody of the property bearing Villa Mohindra Outhouse, 13h Road, TPS III, CTS No. 543, Khar (W), Mumbai – 400052 (property in question) belonging to the CD, has been allowed.

2. In brief, the CD slipped into Corporate Insolvency Resolution Process (CIRP) vide order dated 17.03.2023 and in the first meeting of the CoC held on 26.04.2023 the Respondent (IRP) was appointed as the RP of the CD.

3. The RP alleged to have visited the property in question owned by the CD and found that it was occupied by the present Appellants who have claimed their tenancy right over the same.

4. The RP filed I.A. No. 4632 of 2023 under Section 60(5) r/w Section 25(2)(a) of the Code for taking control and possession of the property in question owned by the CD by evicting the present Appellants from its occupation.

5. Whereas the case set up by the Appellants before the Tribunal is that the property in question was in occupation of Late Shri Suresh Padmanabha Hegde as a tenant, protected under Maharashtra Rent Control Act, 1999 (in short ‘Act’).

6. It is alleged that their predecessor in interest filed a RAD Suit No. 916 of 2005 before the Small Causes Court, Bandra Branch, Mumbai for declaration that he is a monthly tenant in the property in question. 7. The suit was decreed on 26.11.2009 with the following order:-

“Suit is decreed with costs.

It is hereby declared that Plaintiff is tenant of the defendant in respect of the suit premises viz Villa Mohindra Outhouse, 13^th Road, TPS III, CTS No. 543, Khar (W), Bombay – 400052.

The Defendants are restrained from dispossessing and / or obstructing the use, occupation and possession of plaintiff in respect of the suit premises Villa Mohindra outhouse, 13^th Road, TPS III, CTS No. 543, Khar (W), Bombay 400 052 without following due process of law”

8. The CD claimed to have purchased this property from original owner / landlord of the Appellants and filed a suit for eviction bearing RAE Suit No. 149 of 2011 in which the CD categorically averred that “the plaintiff predecessor in title let out to the defendant the premises” referring to the property in question but the eviction was sought on the ground of bonafide requirement by demolishing the existing structure for raising a new building.This suit was filed on 23.12.2016.

9. While the suit was pending, the application under Section 7 of the code filed by Edelweiss Asset Reconstruction Company Limited against the CD was admitted and CIRP was initiated on 17.03.2023.

10. The RP was appointed on 26.04.2023 and at that time suit no. 149 of 2011 was pending. The RP did not make any effort to pursue suit no. 149 of 2011 though he had stepped into the shoes of the CD by virtue of his appointment as the RP on 26.04.2023 rather he filed an application I.A No. 4632 of 2023 before the Tribunal under Section 60(5) and 25(2)(a) of the Code for taking control and custody of the property in question. It transpired before the Tribunal that Shri Hedge had expired on 11.10.2016 and the Appellants being the legal heirs inherited the tenancy rights. It was submitted before it by the Appellants that the tenancy rights are protected under the provisions of the Act and the application under Section 60(5) filed by the RP is firstly not maintainable and secondly the Adjudica