Case Note & Summary
The appeal was filed against an order dated 17.03.2026 by the National Company Law Tribunal, Chandigarh, which allowed the Resolution Professional's application for vacation of premises occupied by the Appellant, Tru Prime Pvt. Ltd. The Corporate Debtor, Majestic Hotels Ltd., was undergoing insolvency proceedings initiated by the Tourism Finance Corporation of India due to a significant default. The Appellant claimed occupation of certain hotel premises based on Profit Sharing Agreements dated 17.06.2019 and 13.03.2020. The Adjudicating Authority found these agreements to be sham and noted that no payments had been made under them. The Tribunal considered arguments from both sides, with the Appellant asserting its right to occupy the premises based on the agreements, while the Resolution Professional contended that the agreements were not valid and did not create any occupancy rights. The Tribunal ultimately upheld the Adjudicating Authority's decision, emphasizing that the RP had the authority to seek possession of the Corporate Debtor's assets and that the Appellant's claims were unfounded. The Tribunal noted that the Profit Sharing Agreements were unregistered and did not confer any legal rights to occupy the premises after the initiation of the Corporate Insolvency Resolution Process. The final decision directed the Appellant to vacate the premises occupied in violation of the IBC.
Headnote
A) Insolvency Law - Corporate Insolvency Resolution Process - Eviction of Unauthorized Occupants - Insolvency and Bankruptcy Code, 2016, Section 19 - The Tribunal upheld the Adjudicating Authority's order directing the Appellant to vacate the premises, finding that the Profit Sharing Agreements were sham documents and did not confer any legal right to occupy the premises post-CIRP initiation. Held that the RP was entitled to take possession of the assets of the Corporate Debtor (Paras 1-21).
Issue of Consideration
Whether the Appellant had a legitimate right to occupy the premises under the Profit Sharing Agreements after the initiation of the Corporate Insolvency Resolution Process.
Final Decision
The Tribunal dismissed the appeal, upholding the Adjudicating Authority's order for eviction, stating that the Profit Sharing Agreements were sham and did not confer any legal rights to occupy the premises after the initiation of the CIRP.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Corporate Insolvency Resolution Process
- unauthorized occupation
- eviction
- sham agreements
