c/w

C.A.(CAA)/54/MB-I/2024

In the matter of

The Companies Act, 2013 (18 of 2013);

AND

In the matter of

Sections 232 r/w 230

and other applicable provisions of the

Companies Act, 2013 and Rules framed thereunder as in force from time to time;

AND

In the matter of

Composite Scheme of Amalgamation

TCNS Clothing Co. Limited

CIN L99999MH1997PLC417265 …Petitioner Company 1/

Transferor Company

Aditya Birla Fashion and Retail Limited

CIN L18101MH2007PLC233901 …Petitioner Company 2

Transferee Company

(“Collectively referred as Applicant Companies”)

Order delivered on 02.08.2024

Coram:

Shri Prabhat Kumar Justice V.G. Bisht (Retd.) Hon’ble Member (Technical) Hon’ble Member (Judicial)

C.A.(CAA)/54/MB-I/2024 Appearances (through)

For the Petitioner : Mr. Ahmed Chunawala, Advocate For the Regional Director : Mr. Bhagwati Prasad, Assistant Director, Western Region, office of Regional Director, Mumbai ORDER

1. Heard the Learned Counsel for the Petitioner Companies as well as the representative of the Regional Director.

2. This Tribunal has received a letter dated 12.06.2024 by one of the unsecured creditors of Transferee Company i.e. M/s Devanand Singh & Son HUF stating that they have leased out a property to the Transferee Company for the purpose of operating a retail showroom or sale of branded garments and accessories under the brand name “VAN HEUSEN” and lease agreement dated 03.05.2017 and supplementary lease agreement dated 18.01.2020 (effective from 01.01.2017 and valid till 31.12.2025) was executed. However, the Transferee Company has stopped paying rent since January, 2021 and as on C.A.(CAA)/54/MB-I/2024

15.05.2024 sum of Rs.64,41,620/- is pending against Petitioner No.2. In view of the same, a case for eviction and rent recovery bearing No. HC Case No. 44 of 2023 before the Ld. Rent Controller cum SDM Dhanbad seeking recovery of sum of Rs.43,91,836.68 along with compensation and future interest against Applicant No.2 was filed and the same is pending for adjudication.

2.1. In respect of the same, the Petitioner Company No.2 has filed affidavit in reply dated 11.07.2024 wherein it is stated that the Petitioner Company had executed a registered lease deed dated 3rd May 2017 with the Objector. In terms of clause 9.1 of the lease deed, the Petitioner company was entitled to appoint franchisee to operate the business and in terms of clause 14.2, the Petitioner was entitled to terminate the lease agreement by issuance of 3 months’ notice. The Petitioner timely discharged the monthly lease rentals of store in favour of Objector till time of termination of the lease agreement. In the month of January'2021, the Petitioner company decided not to continue the business operation from the premise and accordingly Termination Notice dated 4th January 2021 was issued to the Objector in terms of clause 14.2 of the lease deed dated 3rd May 2017 whereby the effective date of termination was mentioned as 7th April, 2021.

C.A.(CAA)/54/MB-I/2024

2.2. It was also informed to the Objector that the rentals during the notice period would be adjusted from the interest free refundable security deposit. The franchisee agreement executed by and between the Petitioner and Pushpalata Kumari expired by efflux of time on 28th February, 2021. Though the franchisee agreement expired, the franchisee in breach of the agreement refused to complete the handover obligations and started making extortion demands. On 6th April 2021, letter was issued by Petitioner company to Objector intimating its surrender of leasehold rights. It also informed the illegal padlock on the premises by Pushpalata Kumari and called upon Objector to take appropriate action against the Pushpalata Kumari for handover of the premises. The Petitioner called upon the Objector to take appropriate action against the unauthorized occupants and also clarified that 8th April, 2021 onwards, the Petitioner would not be responsible for any rentals and/or other charges.

2.3. Thereafter, as per the terms of the franchise agreement, since t