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2026 Supreme(Online)(NCLAT) 648
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Ashok Bhushan, J
Tru Prime Pvt. Ltd. – Appellant
Versus
Navneet Gupta, Resolution Professional of Majestic Hotels Ltd – Respondent
Company Appeal (AT) (Insolvency) No.777 of 2026
For the Appellants/Petitioners: Mr. Pulkit Goyal, Ramneek K. Mann
For the Respondents:Mr. Krishnendu Datta, Sr. Advocate with Mr. Abhishek Anand, Mr. Siddhant Kant, Mr. Saurav Panda, Adv. Moulshree Shukla, Ms. Gayathri Balasubramaniam, Mr. Yash Tandon, Ms. Ridhima Mehrotra
An unregistered profit-sharing agreement, which is neither a lease nor a license, does not confer any right of occupation on a third party in the immovable property of a corporate debtor after the commencement of CIRP, and the RP can seek eviction through the Adjudicating Authority.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 (IBC) - Sections 18, 19, 25 and 60(5) - Jurisdiction of Adjudicating Authority - Possession of assets of Corporate Debtor - Eviction of unauthorized occupants - After commencement of CIRP, Resolution Professional has the duty and obligation to take possession of all assets owned by the Corporate Debtor - An application under Section 60(5) is maintainable for seeking eviction from assets owned by the CD. (Paras 6, 29, 31)
(B) Insolvency and Bankruptcy Code, 2016 - Occupation rights - Lease/license - Profit Sharing Agreement - Unregistered and unstamped agreement - An unregistered Profit Sharing Agreement, which is not a lease or license, cannot create any right to occupy immovable property - The fact that the agreement is not reflected in the books of account of the CD and no consideration was paid under it indicates it is a sham document. (Paras 17, 21)
(C) Insolvency and Bankruptcy Code, 2016 - Related Party - Possession in lieu of dues - A related party cannot be allowed to continue possession of CD's premises in lieu of dues, if any, after initiation of CIRP, as it would give them priority over other stakeholders. (Para 12)
(D) Insolvency and Bankruptcy Code, 2016 - Eviction of Occupants - Jurisdiction - The Adjudicating Authority has ample jurisdiction to direct eviction of unauthorized occupants from the assets of the CD - Filing a separate civil suit for eviction is not contemplated in the statutory scheme of the IBC, as it would unduly prolong the time-bound insolvency process. (Para 30)
Facts of the case:
An appeal was filed challenging an order of the Adjudicating Authority (NCLT) which allowed an application by the Resolution Professional (RP) for vacation of premises from the Appellant. The Corporate Debtor (CD) ran a five-star hotel. After the initiation of CIRP, the RP took possession of the hotel except for certain areas occupied by the Appellant. The Appellant claimed occupation of a salon and shops on the 2nd and 3rd floors under unregistered Profit Sharing Agreements dated 17.06.2019 and 13.03.2020, and five rooms on the 8th floor in lieu of outstanding dues for supply of materials. The RP contended the agreements were sham, not part of the CD's records, and no profit share was ever paid. The Adjudicating Authority found no right of occupancy in the Appellant and directed eviction.
Findings of Court:
The court held that the Appellant failed to prove any right to occupy the premises. The unregistered Profit Sharing Agreements were not leases or licenses and did not create any interest in the immovable property. The Appellant's possession was unauthorized, especially after the CIRP commenced. The RP was fully entitled to seek possession of the CD's assets, and the Adjudicating Authority had the jurisdiction to direct eviction. The court dismissed the appeal, noting that the judgments relied on by the Appellant regarding subsisting leases were inapplicable as the Appellant had no such legal right.
Issues: 1. Whether the Adjudicating Authority had jurisdiction to order the eviction of the Appellant from the premises of the Corporate Debtor. 2. Whether the unregistered Profit Sharing Agreements conferred any right of occupation upon the Appellant. 3. Whether the RP could take possession from an occupant without filing a separate civil suit for eviction.
Ratio Decidendi: The court reasoned that the ownership of the hotel premises vested with the CD, which was undisputed. After CIRP initiation, the RP is statutorily obliged to take control of all assets of the CD. The Appellant's claimed agreements were unregistered and not recognized as valid leases or licenses, and no consideration was paid under them. Therefore, the Appellant could not resist eviction. A separate civil suit for eviction is not required under the IBC's statutory scheme, which is a time-bound process.
Result: Appeal dismissed. No order as to costs.
(D) Appeal - Scope - An appellate court does not substitute its own view merely because another view is possible, but only to correct perversity or illegality. (Para 9)
| Table of Content |
|---|
| 1. appeal against eviction order from nclt stays pending. (Para 1 , 2) |
| 2. parties argue over validity of occupancy and agreements. (Para 3 , 4 , 5 , 6) |
| 3. court examines profit-sharing agreements and their legality. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17) |
| 4. court distinguishes facts from precedents cited by appellant. (Para 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30) |
| 5. appeal dismissed; rp can take possession of premises. (Para 31) |
J U D G M E N T
ASHOK BHUSHAN, J.
This Appeal has been filed challenging order dated 17.03.2026 passed by National Company Law Tribunal, Chandigarh Bench (Court-II), Chandigarh in IA(IBC)/2486(CH)/2024 in CP(IB)No.180/Chd.)Pb/2022. By the impugned order, the application filed by the Resolution Professional (“RP”) being IA(IBC)/2486(CH)/2024 seeking vacation of premises from the Appellant has been allowed and direction has been issued to the Appellant to vacate the salon in 2nd floor, 12-13 shops in 3rd floor, the five rooms on the 8th floor of the hotel. Aggrieved by the said order, this Appeal has been filed.
2. Brief facts of the case necessary to be noticed for deciding the Appeal are:
(i) The Corporate Debtor (“CD”) is running a five-star hotel namely – Hotel Majestic Park Plaza, situated at Ludhiana. The CD had obtained financial facilities from Tourism Finance Corporation of India.
(ii) Tourism Finance Corporation of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “IBC”) being CP(IB)No.180/Chd/Pb/2022 against the CD claiming a default of Rs.14,35,57,30,109/-. The Adjudicating Authority admitted Section 7 application on 03.07.2024 and Navneet Gupta (Respondent No.1) was appointed as Interim Resolution Professional (“IRP”), who was subsequently confirmed as RP.
(iii) Financial facilities were assigned to UV Asset Reconstruction Company Ltd., who became Member of the Committee of Creditors (“CoC”)
(iv) The RP visited the hotel premises to take possession on 08.07.2024 and have taken the custody and control of the assets of the CD, except certain rooms and area in the hotel premises, which were in possession of the Suspended Director their families, friends, relatives and associates, from whom possession could not be taken. In the first Meeting of the CoC held on 02.08.2024, the RP apprised the CoC about that possession of certain premises in the hotel could not be taken. The CoC advised the RP to take appropriate action within the ambit of IBC.
(v) The RP issued notice on 04.10.2024 to the Suspended Director seeking vacation of the rooms. The premises having not been vacated by the Ex-Directors, their family Members, friends, relatives and associates, an IA(IBC)/2486(CH)/2024 was filed by the RP, seeking a direction for vacation of peaceful possession of the CD’s premises. The application, which was filed, was against the Suspended Director of the CD, subsequently other Respondents were impleaded including the Appellant herein, who was also occupying premises of the hotel. Notices were issued to Respondents in the application, including the Appellant. The Appellant filed its reply and additional reply to the application. The Appellant claimed occupation of salon at 2nd floor and 12-13 shops under Profit Sharing Agreement dated 17.06.2019 and 13.03.2020 entered with the CD and the Appellant. With regard to occupation of five rooms at 8th floor, it was pleaded that key managerial personnel of the Appellant is occupying the said floors to set-off the outstanding amount receivables from the CD towards supply of materials. The RP filed a rejoinder to the rply pleading that the Profit Sharing Agreement dated 17.06.2019 and 13.03.2020, which is relied by the Appellant, is not part of the record of the CD. The said documents are sham and have been created with the help of Suspended Director and are not genuine documents. It is pleaded by the RP that no amount with respect to the above Profit S
