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2026 Supreme(Online)(NCLAT) 647
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Ashok Bhushan, J
Raman Khangura – Appellant
Versus
Navneet Gupta – Respondent
Company Appeal (AT) (Insolvency) No.686 of 2026 | Company Appeal (AT) (Insolvency) No.801 of 2026
For the Respondents:Mr. Krishnendu Datta, Sr. Advocate with Mr. Abhishek Anand, Mr. Siddhant Kant, Mr. Saurav Panda, Mr. Moulshree Shukla, Ms. Gayathri Balasubramaniam, Mr. Yash Tandon, Advocates for R1, Mr. Abhijeet Sinha, Sr. Advocate with Ms. Ridhima Mehrotra, Ms. Heena Kochar, Advocates for CoC, Mr. Navneet Gupta, Advocate for RP
The IBC empowers the Resolution Professional to seek eviction from the Corporate Debtor's assets, overriding any right claimed under an unregistered, unstamped agreement or collusive arbitral award, especially from a related party.
Headnote:
(A) Insolvency and Bankruptcy Code, 2016 - Sections 18, 25 and 60(5) - Companies Act, 2013 - Section 188 - Direction for eviction of suspended directors and their family from assets of Corporate Debtor - Resolution Professional's duty to take control and custody of all assets of Corporate Debtor, including those over which Corporate Debtor has ownership rights, even if in possession of third parties - Occupation of Corporate Debtor's premises by suspended directors and their family based on unregistered, unstamped MoU and an arbitral award held to be invalid - Such documents, being related party transactions not disclosed as required under Section 188 of the Companies Act and not part of Corporate Debtor's records, cannot confer any right of possession against the statutory scheme of the IBC - Claims of compensation, if any, can only be made in the CIRP, not by retaining possession. (Paras 17, 18, 25, 26)
(B) Insolvency and Bankruptcy Code, 2016 - Section 18(1)(f) - Resolution Professional's Power to Take Possession - The Resolution Professional is statutorily mandated to take control and custody of all assets of the Corporate Debtor over which it has ownership rights - The Adjudicating Authority under the IBC has jurisdiction to direct eviction of unauthorized occupants from Corporate Debtor's assets to facilitate the CIRP, and filing a separate civil suit for eviction is not contemplated in the statutory scheme of the IBC. (Paras 19, 20, 21)
(C) Arbitration and Conciliation Act, 1996 - Section 34 - An arbitral award collusively obtained and not based on any genuine pre-existing dispute cannot be used to defeat the rights of the corporate debtor or its creditors under the IBC - Such an award does not confer any higher right than the underlying agreement, especially when the agreement itself is invalid. (Paras 26)
Facts of the case:
The Corporate Debtor, a hotel company, was admitted into CIRP. The Resolution Professional, while taking possession of the hotel's assets, found that the 8th and 9th floors were occupied by the suspended directors and their family members, including the Appellants. The Appellants claimed a right to occupy the 9th floor based on an unregistered MoU and an arbitral award. The Resolution Professional filed an application seeking eviction, which was allowed by the Adjudicating Authority. The Appellants challenged this order.
Findings of Court:
The NCLAT upheld the eviction order. It held that the unregistered, unstamped MoU could not confer any right of occupancy over the Corporate Debtor's immovable property. The MoU and the arbitral award were found to be collusive and an afterthought, as they were not part of the Corporate Debtor's records, not disclosed as related party transactions, and the suspended directors themselves had earlier claimed the occupation was a 'perquisite' of their position. The court ruled that any compensation claim must be filed in the CIRP, not by retaining possession.
Issues: 1. Whether the Appellants could be evicted from the Corporate Debtor's premises based on an unregistered MoU and an arbitral award. 2. Whether the Adjudicating Authority had the jurisdiction to order eviction.
Ratio Decidendi: The court reasoned that the MoU, being an unregistered and insufficiently stamped document, cannot create any right, title, or interest in immovable property. The arbitral award, which was based on this MoU and was not part of the Corporate Debtor's records, was also deemed unenforceable. The key principle is that after the initiation of CIRP, the Resolution Professional must take control of all assets of the Corporate Debtor, and no person, especially a related party, can be allowed to retain possession to the detriment of the CIRP process and the interests of other stakeholders.
Result: Both appeals dismissed. Appellants granted two weeks' further time to vacate; failing which, Resolution Professional to seek police assistance for eviction. No order as to costs. (Para 28, 29)
| Table of Content |
|---|
| 1. background facts of the case, including cirp initiation and property possession issues. (Para 1 , 5 , 11 , 12 , 13 , 14 , 15) |
| 2. court's observations on the nature of the occupation and legal rights. (Para 3 , 4 , 10 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24) |
| 3. arguments of the parties regarding the validity of the mou and arbitral award. (Para 6 , 7 , 8 , 9) |
| 4. analysis of the mou and arbitral award as sham and unenforceable documents. (Para 25 , 26 , 27) |
| 5. final order dismissing appeals and granting time to vacate. (Para 28 , 29) |
J U D G M E N T
(29th May, 2026)
Ashok Bhushan, J.
1.These two Appeals have been filed challenging the same order dated 17.03.2026 passed by the Adjudicating Authority (National Company Law Tribunal) Chandigarh Bench (Court II), Chandigarh in IA (IBC)/2486(CH)/2024 filed in CP(IB) No.180/Chd/Pb/2022. Application filed by the Resolution Professional being IA No.2486 of 2024 seeking a direction of eviction of the Respondent to the application who are now Appellant had been allowed by the impugned order. Company Appeal (AT) (Insolvency) No.686 of 2026 has been filed by Raman Khangura who was arrayed as Respondent No.4 to the IA No.2486 of 2024 whereas Company Appeal (AT) (Insolvency) No.801 of 2026 has been filed by Jagpal Singh Khangura who is father-in-law of Mrs. Raman Khangura. By the impugned order, Adjudicating Authority allowed the application filed by the Resolution Professional and directed the Appellant herein to vacate the premises within a period of two weeks failing which, the Resolution Professional was to seek assistance from Commissioner of Police, Ludhiana. Aggrieved by the said order, these Appeals have been filed.
2. Brief facts of the case necessary to be noticed for deciding these Appeals are:-
2.1. The Corporate Debtor- Majestic Hotels Limited owns five star hotel namely— Hotel Majestic Park Plaza situated in Ludhiana. The Corporate Debtor had taken financial facilities from Punjab and Sind Bank. Mrs. Raman Khangura director of the Corporate Debtor mortgaged her residential property situated at Chandigarh as security for the loan. Punjab and Sind Bank for recovering its dues from the Corporate Debtor sold the mortgaged assets on 07.09.2015. Mrs. Raman Khangura, her husband Jasbir Singh Khangura and other family members including Jagpal Singh Khangura have been residing in 9th floor of the Hotel. UV Asset Reconstruction Company Ltd. claiming two separate assignment agreement dated 12.12.2017 from Tourism Finance Corporation of India and Tourism Finance Corporation of India filed Section 7 application against the Corporate Debtor being CP(IB) No.180 of 2022 claiming a default of Rs. 14,35,57,30,109/- as on 28.02.2022 which Section 7 application was admitted by Adjudicating Authority, Chandigarh vide order dated 03.07.2024. Mr. Navneet Gupta was appointed as an IRP who was confirmed as Resolution Professional of the Corporate Debtor. The Resolution Professional constituted the CoC which consisted sole Financial Creditor- UV Asset Reconstruction Company Ltd. 1st meeting of the CoC was held on 02.08.2024 where one of the Suspended Director Jasbir Singh Khangura along with others participated. Resolution Professional informed the CoC that the principal place of business of Corporate Debtor on 08.07.2024 i.e. Majestic Park Plaza and he has taken custody and control of various properties except for certain rooms and areas on 8th and 9th floor of Hotels which are in the possession of the Suspended Directors and their family/friends/associates from whom possession could not be taken. The CoC in the 1st CoC meeting advice the Resolution Professional to take appropriate action within the ambit of IBC with respect to the assets of the Corporate Debtor. The Resolution Professional issued a notice dated 04.10.2024 to Jasbir Singh Khangura seeking vacation of the premises including rooms at the 9th floor. In the 3rd CoC meeting held on 11.10.2024, the Resolution Professional brought
