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Judgment
Ashok Bhushan, J.
These two Appeal(s) have been filed against the same order dated 18.10.2024 passed by National Company Law Tribunal, Division Bench (Court-II), Kolkata approving the Resolution Plan in the Corporate Insolvency Resolution Process (“CIRP”) of the Corporate Debtor – Duncans Industries Ltd.
Brief background facts giving rise to these two Appeal(s) are as follows:
The Corporate Debtor (“CD”)- Duncans Industries Ltd. had been running Tea Gardens in the State of West Bengal. Tea Gardens were leased out to the CD and other Tea Companies by State of West Bengal under West Bengal Acquisition Act, 1953.
On an application filed by Financial Creditors, CIRP commenced against the CD on 05.03.2020. The Resolution Professional (“RP”) filed several IAs for taking possession of different Tea Gardens. The applications filed by RP for taking possession of different Tea Gardens were dismissed by Adjudicating Authority by different orders commencing from 28.05.2021 to 18.07.2022. Five Appeals being Company Appeal (AT) (Ins.) Nos.672 of 2021, 592 of 2022, 628 of 2022, 754 of 2022 and 907 of 2022 were filed by the RP before this Tribunal, challenging order of the Adjudicating Authority, rejecting the applications, by which possession was sought of the various Tea Gardens.
In the CIRP of the CD, Resolution Plans were invited and Resolution Plan submitted by one Uniglobal Papers Pvt. Ltd. was approved by the Committee of Creditors (“CoC”).
Five Appeals, which were filed in this Tribunal, were decided by judgment of this Tribunal dated 02.08.2024. This Tribunal held that the leases with regard to three Tea Gardens namely – Kilcott, Garganda and Bagracott-I, were current on the day when CIRP commenced and leases with regard to other Tea Gardens having expired by efflux of time, only three Tea Gardens with regard to whom leases are continuing are the assets of the CD and the RP could take possession only of those Tea Gardens, which are the assets of the CD. This Tribunal vide order dated 02.08.2024 disposed of the Appeal. In paragraphs 120 and 121, following was directed:
“Question No.9
120.In view of the foregoing discussions and conclusions, we held that leasehold rights of the Corporate Debtor subsist in three Tea Gardens, namely -Garganda, Kilcott and Bagracote, where the lease has been renewed and valid as follows:
Sl. No. Tea Estate Valid upto 1. Garganda 08.09.2026 2. Kilcot 23.08.2025 3. Bagarcote Div.I 22.05.2028 121.The orders rejecting the IAs of RP insofar as the aforesaid three Tea Gardens are concerned are unsustainable and deserve to be set aside. In view of the above, all the Appeal(s) are disposed of in following manner:
I. Company Appeal (AT) (Insolvency) No. 672 of 2021 is partly allowed. The order dated 28.05.2021 passed in IA No.1256/KB/2020 is partly allowed, insofar as Garganda Tea Garden is concerned. The order of the Adjudicating Authority with respect to other Tea Gardens, i.e., Hantapara, Tulsipara and Dumchipara is affirmed.
II. Company Appeal (AT) (Insolvency) No.593 of 2022 is partly allowed. Order dated 21.04.2022 in IA No.1111/KB/2021 set aside, insofar it relates to Tea Garden Kilcott. Rest of the order is affirmed.
III. Company Appeal (AT) (Insolvency) No.754 of 2022 is partly allowed. Order dated 09.05.2022 passed in IA No.665/KB/2021, insofar as it relates to Bagracote Div.I is set aside. Rest of the order is affirmed.
IV. Company Appeal (AT) (Insolvency) No.628 of 2022 and Company Appeal (AT) (Insolvency) No.907 of 2022 are dismissed.
V. It is held that Tea Gardens of Garganda, Kilcott and Bagracote are assets of the Corporate Debtor, to which the RP was entitled to be handed over the possession. However, in sequence of the events and facts that these three Tea Gardens having been run by Merico and Sammelan and in the Tea Gardens, thousands of workers are working, we are of the view that ends of justice will be served in holding that RP shall be deemed to be in possession of the aforesaid Tea Gardens and operation of these three Tea Gardens shall henceforth be under the supervision and control of the RP till the CIRP continues.
Challenging the orders of this Tribunal dated 02.08.2024, several Civil Appeals were filed in the Hon'ble Supreme Court. Three Appeals filed by the Appellant (Merico Agro Industries Pvt. Ltd.), challenging order dated 02.08.2024. The Hon'ble Supreme Court vide its order passed on 22.11.2024 dismissed all the Appeals filed by the Appellant challenging order dated 02.08.2024. The Appellant in Company Appeal (AT) (Ins.) No.2189 of 2024, claim to be in possession of Tea Gardens -Kilcott, Garganda and Bagracott-I. The Principal Secretary and LRC Land and Land Reforms, Refugee Relief and Rehabilitation and Anr. also filed an Appeal, challenging order dated 02.08.2024, by which this Tribunal has held that leases of three Tea Gardens are continuing. The Appeals filed by the State of West Bengal were also dismissed on 27.01.2025 by the Hon'ble Supreme Court.
After order of this Tribunal dated 02.08.2024, application IA No.IA (IB) No.237/(KB)/2022 filed by the RP for approval of Resolution Plan submitted by Successful Resolution Applicant (“SRA”) was heard. The Adjudicating Authority vide order dated 18.10.2024 approved the Resolution Plan submitted by Uniglobal Papers Pvt. Ltd., which was approved by 99.20% vote shares of the CoC.
Company Appeal (AT) (Ins.) No.2189 of 2024 has been filed by Merico Agro Industries Pvt. Ltd. & Sammelan Tea and Baverages Pvt. Ltd. challenging order dated 18.10.2024. In the Appeal, following prayers have been made by the Appellants:
“a)Set aside the impugned order dated 18 October, 2024 passed by the learned National Company Law Tribunal Kolkata Bench in IA (IB) No. 237/ (KB) /2022 in CP(IB) No. 184/( KB)/2018;
b)Leave be granted to the appellant to serve a copy of the instant appeal on the respondent;
c)Stay of operation of the order dated 18 October, 2024 passed by the Learned National Company Law Tribunal, Kolkata Bench in IA (IB) No. 237/ (KB) /2022 In CP(IB) No. 184/( KB)/2018;
d)Ad-interim order in terms of prayers above;
e)Costs of and incidental to this petition be caused in the cause;
f)Such further and/or other order/orders be passed as to this Hon’ble Tribunal may seem fit and proper.”
Company Appeal (AT) (Ins.) No.2291 of 2024 has been filed by Nagri Farm Tea Co. Ltd. praying for following reliefs:
“a. The Impugned Order dated October 18, 2024, passed by National Company Law Tribunal, Kolkata Bench in CP (IB) No. 184/KB/2018, insofar as paragraph 18 relates to the Marybong Tea Estate deserved to be set aside;
b. Such other and/or further orders be passed as this Hon'ble Tribunal may deem fit and proper.”
We need to proceed to notice the submissions raised by the learned Counsel for the parties in these two Appeal(s) separately.
Company Appeal (AT) (Insolvency) No.2189 of 2024
We have heard Shri Jishnu Saha, learned Senior Counsel appearing for the Appellant; Shri Joy Saha, learned Senior Counsel appearing for the RP; and Shri Amar Dave, learned Counsel appearing for SRA.
Shri Jishnu Saha, learned Senior Counsel for the Appellants submits that Appellants were given possession of various Tea Gardens, including the Tea Garden - Kilcott, Garganda and Bagracott-I, who were running the said Tea Gardens and were in possession. Against the order of this Tribunal dated 02.08.2024, three Appeals (as noted above) were filed by the Appellant before the Hon’ble Supreme Court, claiming rights with regard to Kilcott, Garganda and Bagracott-I. The Adjudicating Authority while approving the Resolution Plan has granted relief to the SRA and has directed “For the Tea Gardens, where the Lease period has expired, it is open for SRA to make application to the Lessor or if renewal application has already been made, pursue the same.” It is submitted that the said direction in the Resolution Plan is prejudicial to the interest of the Appellant, who had been in possession of various Tea Gardens. The Adjudicating Authority while approving the Resolution Plan was not required to issue any direction with regard to renewal of the leases, which had already expired and the said direction is beyond the jurisdiction of the Adjudicating Authority. It is submitted that by liberty granted by the Adjudicating Authority in paragraph 9.2.1 of the Resolution Plan, the SRA can claim right with respect to those Tea Gardens, which are not assets of the CD as held by this Tribunal in judgment dated 02.08.2024. There was no question of Adjudicating Authority granting such relief to the SRA to pursue application for renewal of leases, which stood determined by efflux of time, much prior to the commencement of CIRP. Learned Counsel for the Appellants submit that Appellants have no grievance on the approval of the Resolution Plan except the above direction, which needs to be set aside.
Learned Senior Counsel for the RP opposing the submission of the Appellant contends that Appellant has no locus to challenge the approval of Resolution Plan. The Appellant was not a stakeholder in the CIRP of the CD and the SRA, whose Resolution Plan has been approved is fully entitled to pursue renewal applications, which have been filed for renewal of the leases and the directions issued by Adjudicating Authority in the impugned order, do not call for any interference. It is further submitted that the Appellant has filed Appeals before the Hon’ble Supreme Court challenging order dated 02.08.2024 passed by this Tribunal, which Appeals have been dismissed by the Hon’ble Supreme Court on 22.11.2024 and the Hon’ble Supreme Court while dismissing the Appeals has held that Appellant has no locus-standi to file Appeal against the order of this Tribunal. Learned Counsel for the RP has also referred to the order of the Hon’ble Supreme Court dated 22.11.2024, where Hon’ble Supreme Court has noticed the submission of the learned Counsel for the West Bengal that there is no lease granted in favour of Merico Agro Industries Pvt. Ltd. and Sammelan Tea and Beverages Pvt. Ltd.
Learned Counsel for the SRA has also refuted the submissions of learned Counsel for the Appellants and submits that the Appellants have no locus to file the Appeal. It is submitted that Merico and Sammelan even after order dated 02.08.2024 are illegally continuing in possession of Tea Gardens, which has been held to be assets of the CD. In the order passed by the Adjudicating Authority, while dismissing the application filed by the RP, liberty was granted to the RP to apply for renewal, which order having been affirmed, there is no reason to interfere with the order.
Company Appeal (AT) (Insolvency) No.2291 of 2024
We have heard Shri S.N. Mukherjee, learned Senior Counsel appearing for the Appellant; Shri Joy Saha, learned Senior Counsel appearing for the RP; and Shri Amar Dave, learned Counsel appearing for the SRA.
Learned senior Counsel for the Appellant submits that the Appellant is in possession of Marybong Tea Estate from 01.01.2004. It is submitted that a MoU was entered between the Appellant and the Management of the CD, under which the Appellant was given right to run the CD. The Appellant has made payments amounting to more than Rs.6 crores. It is submitted that further MoU was entered on 05.07.2013. It is submitted that the Tea Garden Marybong has not been held to be the assets of the CD by judgment dated 02.08.2024 and the Appellant, who is continuing in possession is entitled to carry on his rights. It is submitted that Adjudicating Authority committed error in issuing direction in paragraph 18 of the impugned order, permitting the SRA to make an application for renewal of the leases and to get possession, if granted. Learned Counsel further took exception to the reliefs and concessions granted at paragraph 9.2.1. It is submitted that there is no occasion to grant right to SRA to apply for renewal of leases, for whose terms have already expired and the above blessing given to SRA is prejudicial to the rights and interest of the Appellant. Learned Counsel for the Appellant has also referred to the reliefs and concessions under paragraph 9.8, which was not granted. The learned Counsel for the Appellant has also referred to the Report of the Tea Board and submits that Tea Board has also noticed that the Appellant is running the Tea Garden Marybong and has incurred expenses.
The submissions of the Appellant have been opposed by both the learned Counsel for the RP and the SRA. Same submissions have been advanced by the RP and SRA, which we have noticed on their behalf in Company Appeal (AT) (Ins.) No.2189 of 2024 (above), hence, need no repetition.
As noted above, in the above Appeal(s), the Appellants are only aggrieved by part of the order. In Company Appeal (AT) (Ins.) No.2189 of 2024, although in the prayers, the Appellant has prayed for setting aside the order approving the Resolution Plan, whereas its main grievance is reflected in paragraph 7(xl), which is as follows:
“7(xl). The appellants are accordingly aggrieved by the order impugned passed by the learned NCLT granting the relief sought by the SRA in clause 9.2.1 of the resolution plan by granting the SRA leave to make fresh applications or pursue any pending application seeking renewal of the remaining tea gardens, the lease of which granted to the corporate debtor or its predecessors in interest, stood determined prior to commencement of CIRP and on grounds dehors commencement of CIRP.”
Paragraph 18 of the impugned order and paragraph 9.2.1 with respect to which grievance have been raised by learned Counsel appearing for the Appellants, need to be noted first. Paragraph 18 of the order directs as follows:
“18.Therefore, we make it clear that apart from these three Tea Gardens, Two Tea Gardens whose freehold ownership has not been disputed namely Terai Land and Madarihat, the SRA will not be automatically be entitled to claim those as assets of Corporate Debtor. In regard to the rest of the Tea Gardens, for which lease period has expired or the Tea Gardens are in possession with others, SRA is free to take steps for renewal of the Leases and get the possession of the same, if granted. This is as per orders are passed by Hon’ble NCLAT dated 02.08.2024.” and in paragraph 9.2.1, which is under the heading “Reliefs & Concessions sought” is as follows:
| “Sl. No. | Referred Clause | Reliefs & Concessions sought for | Our Inference | Status |
| 1) | 9.1 | Consents and approvals, authorizations etc. | ||
| 2) | Upon approval of this Resolution Plan by the NCLT, all actions stated in this Resolution Plan shall be deemed to be approved to make the Resolution Plan effective. Accordingly, any action or implementation of this Resolution Plan shall not be a ground for termination of any consents, approvals, leases & licenses, concessions, authorizations, permits or the like that has been granted to the Corporate Debtor or for which the Corporate Debtor has made an application for renewal or grant. | Whatever the immunity is granted is strictly under Section 32A of the I&B Code. | Granted. Subject to our directions in the para 18 (supra) and other paras. | |
| 3) | 9.2 | Licenses/ Approvals/ Contractual Rights and Benefits | ||
| 4) | 9.2.1 | The Resolution Applicant has assumed that upon approval of this Resolution Plan by the NCLT all subsisting consents, licenses, approvals, rights, entitlements, benefits and privileges whether under law, contract, lease or license, granted in favour of the Corporate Debtor or to which the Corporate Debtor is entitled or accustomed to (whether applied for renewal by the Corporate Debtor or not) shall, notwithstanding any provision to the contrary in their terms, be deemed to continue without disruption for the benefit of the Corporate Debtor for a period of 96 months and till such time, the Resolution Applicant will apply for fresh licenses. | Whatever the immunity is, it is granted strictly under Section 32A of the I&B Code. | Granted in accordance with law to the extant permissible. For the Tea Gardens, where the Lease period has expired, it is open for SRA to make application to the Lessor or if renewal application has already been made, pursue the same.” |
As noted above, the Appellant in Company Appeal (AT) (Ins.) No.2189 of 2024 has also claimed to be in possession with regard to Tea Gardens, which are not held to be assets of the CD. The Appellant – Nagri Farm Tea Co. Ltd. claims possession of Marybong from 01.01.2024, which was also not held to be the assets of the CD. The grievance, which has been advanced by the Appellant with regard to order of the Adjudicating Authority, where the Adjudicating Authority observed:
“For the Tea Gardens, where the Lease period has expired, it is open for SRA to make application to the Lessor or if renewal application has already been made, pursue the same.”
When we look into paragraph 18, what the Adjudicating Authority has said “SRA is free to take steps for renewal of the Leases and get the possession of the same, if granted”. Similarly, in paragraph 9.2.1, the Adjudicating Authority has directed, “it is open for SRA to make application to the Lessor or if renewal application has already been made, pursue the same”.
Shri Joy Saha, learned Senior Counsel for the RP submitted that CD had applied for renewal for Tea Gardens, where leases have expired, but State of West Bengal has not taken any decision on the renewal of the leases and those application are pending for last several years.
In view of the approval of the Resolution Plan, the SRA has come into the shoes of the CD and when CD had applied for renewal of the leases, where period of the leases had expired, no exception can be taken to the direction of the Adjudicating Authority permitting the SRA to pursue the renewal application or to file application where renewal application has not been made. We, thus, are of the view that the prayers made on behalf of the Appellant to set aside paragraph 18 and Clause 9.2.1 of the sub-paragraph 20 of the order, cannot be accepted.
We, however, are of the opinion that Adjudicating Authority while approving the Resolution Plan or issuing direction contained in paragraphs 18 and 9.2.1 has to be treated not to have expressed any opinion with regard to renewal of the leases, which is in the domain of State of West Bengal. Only liberty to pursue the application was granted and the question of granting renewal is in the domain of the State Government. The Adjudicating Authority has not made any observation with regard to grant or non-grant of renewal of leases. We, thus, only clarify that directions of the Adjudicating Authority has to be treated, limited to right to pursue the renewal application/ make an application for renewal and the Adjudicating Authority has not have expressed any opinion on the merits of renewal application, which is in the domain of State Government. Subject to observations and clarifications as made above, both the Appeal(s) are dismissed. Pending IAs, if any, are also disposed of. There shall be no order as to costs.