In a recent ruling by the Principal Bench of NCLAT, New Delhi, it was expounded that it is the Resolution Professional's primary duty to manage the corporate debtor's affairs and assets. However, the allottee cannot as a right claim execution of the conveyance deed. The Resolution Professional, who is running the business of the Corporate Debtor is the best person to take a decision as to what part of the business of the Corporate Debtor can be carried out.
The Bench further opined that what part of the contract has to be carried out and what part of contract cannot be carried out is in the domain of RP and there has to be reasons for issuing direction akin to order for allowing specific performance of contract.
Brief Facts:
In the present case, the Appellant who was allottted commercial space by the Debtor, ceases receiving rent after Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor. The Appellant sought the relief for execution of the conveyance deed in their favour, which was denied. Hence, the present appeal.
Contentions of the Appellant:
It was submitted that the Appellant, as an allottee of commercial space, has completed approximately 95% of the payment and is prepared to settle the remaining sum for the conveyance deed's issuance in their favour.
Further, it was asserted that the appellant was entitled to receive rent for the leased shops, based on the terms agreed upon in the MoU. This income stream has been disrupted following the initiation of the CIRP, despite the appellant previously receiving regular monthly payments from the Corporate Debtor.
Contentions of the Respondent:
It was argued that the appellant did not have the right to the execution of the Conveyance Deed. It was also submitted there was no initial request for a relief to execute the Conveyance Deed, and this argument emerged only during subsequent discussions.
Observations of the Court:
It was observed that it is the Resolution Professional's primary duty to manage the corporate debtor's affairs and assets. However, the allottee cannot as a right claim execution of the conveyance deed. The Resolution Professional, who is running the business of the Corporate Debtor is the best person to take a decision as to what part of the business of the Corporate Debtor can be carried out.
The Bench opined that what part of the contract has to be carried out and what part of contract cannot be carried out is in the domain of RP and there has to be reasons for issuing direction akin to order for allowing specific performance of contract.
The Bench observed the RP's decision to deposit rent payments into fixed deposits, set to be disbursed according to law, effectively protecting the appellant's financial interests.
The decision of the Court:
The Bench dismissed the appeal noting that there were no grounds made to interfere with the impugned order.
Case Title: Amit Tyagi vs Indirapuram Habitat Centre Pvt. Ltd.
Coram: Justice Ashok Bhushan, Mr. Barun Mitra and Mr. Arun Baroka
Case No. : Company Appeal (AT) (Insolvency) No. 272 of 2024
Advocates for the Appellant: Advs. Mr. Piyush Singh, Mr. Akshay Srivastava and Mr. Vivek Kumar
Advocate for the Respondent: Adv.Mr. Sumesh Dhawan
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