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2024 Supreme(Online)(NCLAT) 264
NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI COMPANY APPEAL (AT)(Ins) No. 166 of 2024 (Arising out of judgement and order dated 04.01.2024 passed by the National Company Law Tribunal, Court II, Mumbai Bench in Interlocutory Application No.1160/2021 filed in CP(IB) No. 1980/MB/2018) In the matter of: Mr. Pavan Vikram Sajhwani, AB01/B, Abo1/C, AB01/D & AB01/E, Basement Neelam Centre, ‘A’ Wing, Hind Cycle Road, Worli, Mumbai 400025 Also at:
Flat No.44, Khanna Construction House, Abdul Gaffar Khan road, Worli, Mumbai 400018 Appellant Vs Mr. Santanu T Ray, Liquidator of Oneworld Industries Pvt Ltd AAA Insolvency Professionals LLP, A-301, ‘A’’ Wing, BSEL Tech Park, Sector 30A, Opp Vashi Railway Station, Vashi, Navi Mumbai 400705 Respondent For Appellant: Mr Deeptakirti Verma, Ms Neha Sharma, Advocates For Respondent: Mr. Rohit Gupta, Ms Rubina Khan, Mr Prashansha Agarwal, Ms Abha Patel, Ms Neha Agarwal, Mr Siddharth Chapalgaonkar, Advocates.
NCLT's jurisdiction to pass eviction orders and the overriding effect of IBC provisions on other laws.
Headnote:
Jurisdiction - Eviction - Interpretation of IBC provisions
Fact of the Case:
The appeal is against an order directing the appellant to hand over possession of licensed premises to the liquidator. The appellant argued that the NCLT lacked jurisdiction and failed to consider the status quo order and pending writ petition.
Finding of the Court:
The court found that the NCLT had jurisdiction to pass the eviction order despite the injunction from the civil court and the pendency of a writ petition. The court also noted that the appellant bypassed the provisions of the IBC and failed to provide a valid explanation.
Issues: Jurisdiction of NCLT, applicability of IBC provisions, and validity of the status quo order and pending writ petition.
Ratio Decidendi: The NCLT has jurisdiction to pass eviction orders despite injunctions from civil courts, and the provisions of the IBC override other laws. The pendency of a writ petition does not affect the NCLT's jurisdiction.
Final Decision: The appeal was dismissed as the court found it devoid of merit.
JUDGEMENT
JUSTICE YOGESH KHANNA, MEMBER (JUDICIAL) This appeal is against an impugned order dated 04.01.2024 passed by the National Company Law Tribunal, Court II, Mumbai Bench in an Interlocutory Application No.1160 of 2021 filed in CP No.1980/MB/2018 wherein the Learned NCLT had directed appellant to handover vacant and peaceful possession of the premises licensed to the Appellant by the Corporate Debtor within 15 days.
2. The impugned order has been challenged on the ground that the issue of eviction vests with the Learned Court of Small Causes under Section 41 of the Presidency Small Causes Courts Act, 1882 and though the Learned NCLT has placed reliance upon a judgement dated 24.04.2023 passed by this Tribunal in Company Appeal (AT)(Insolvency) No. 748/2022 titled Adinath Jewellery Exports V. Mr. Brijendra Kumar Mishra & Anr but the facts of the said case were materially different from the present case and hence the said judgement is inapplicable to the facts stated herein. Further it is argued the Learned NCLT had failed to heed and apply the note of the caution expressed by the Hon’ble Supreme Court in the case of Gujarat Urja Vikas Nigam Limited V. Amit Gupta (2021 7 SCC 209 and reiterated in the judgement of Tata Consultancy Services Ltd V. Vihal Gisulal Jain (Civil Appeal No.3045 of 2020 that the Learned NCLT and this Tribunal ought not to ordinarily usurp the legitimate jurisdiction of other Courts, tribunals and in exercise of residuary functions under Section 60(5) of the IBC.
3. It is argued the Learned NCLT had even failed to note that despite five attempts being made to carry out auction sale of the said premises, the Respondent was unable to conclude the same and the Appellant himself had conveyed he intends to make a bid as and when the property is put to auction during the liquidation process. Further the Appellant is paying a substantial amount as a licensee and if is evicted, the liquidation estate would not get benefit from the vacant premises and would suffer a loss of substantial amount.
4. Lastly it was argued the Learned NCLT had failed to consider there was a subsisting status quo order issued by the Learned Court of Small Causes in inter-parties proceedings between the Appellant and the Respondent and a Writ Petition bearing No.11069/2022 filed by the Ld. Liquidator against the order of the Learned Court of Small Causes is still pending.
5. In support of his submissions the Learned counsel for the Appellant has referred to an order dated 06.10.2021 passed in LD Suit No.97/2021 in the Court of Small Causes at Mumbai wherein it had restrained the Liquidator from dispossessing the plaintiff or obstructing his vacant and peaceful possession of the suit premises either by himself or through any other person, without following due process of law till disposal of the suit. It is argued that the appellant went in Writ Petition but did not get any favourable order and deliberately not disclosed the pendency of Writ to the NCLT.
6. Heard.
7. Before proceeding further, we would like to refer to some relevant paras of the impugned order:-
- “10. As regards the question of jurisdiction, the Respondent has objected to the jurisdiction of this Tribunal to evict him from the licensed premises. According to the learned Counsel for the Respondent, the Hon'ble Small Causes Court is vested with the exclusive jurisdiction u/s 41 of the Presidency Small Causes Courts Act, 1882. Therefore, this Hon'ble Tribunal has no jurisdiction to entertain the eviction application by the Liquidator We have carefully examined the aforesaid submission made on behalf of the Respondent. The issue of Adjudicating Authority passing eviction orders in respect of the immovable properties forming part of the liquidation estate of the Corporate Debtor despite injunction orders passed by a civil court is no more res integra. The Hon'ble NCLAT in the matter of Adinath Jewellery Exports v/s. Brijendra Kumar Mishra &
