Mr. K. Parthiban Rasu vs R. Venkatakrishana & Ors.

Oral Judgment : Justice Sharad Kumar Sharma, Member (Judicial):

The Appellant herein is the suspended Director of M/s. Star Trace Private Limited. The proceedings under Section 9 of I & B Code, 2016 stood initiated against the Corporate Debtor, M/s. Star Trace Private Limited, by M/s. Umiya Development Center Private Limited, the Operational Creditor who filed the Application under Section 9 of the I & B Code, 2016, in CP (IBC) / 304 / CHE / 2020, for the defaulted amount of Rs.7,74,25,437/- which was allegedly due to be paid as on 03.02.2018. The Corporate Debtor was admitted into CIRP on 09.08.2024 and upon failure of CIRP, was put into liquidation on 09.08.2024. Subsequent to this, the Liquidator conducted e-auction of the Corporate Debtor on 22.05.2025 on ``as is where is’’, ``as is what is’’ and ``whatever there is’’ basis, declared M/s. Rashmi Cements as the Successful Purchaser on 24.05.2025 and issued Sale Certificate to the said purchaser on 11.06.2025.

There had been various interlocutory proceedings, which had been carried at the behest of the Appellants before Ld. NCLT ever since the commencement of CIRP process and there have been multiple Appeals, filed by the Appellant before this Appellate Tribunal too. The details of the said Appeals are given hereunder:

In Company Appeal (AT) (CH) (INS) No. 11 of 2025, the Appellant has put the challenge to the impugned order of 09.08.2024 passed in IA (IBC) (LIQ) / 7 / CHE / 2024, by virtue of which the Corporate Debtor was put to liquidation. The said Appeal is pending before this Appellate Tribunal as on date without grant of any interim order.

Consequent to the order of 09.08.2024, an order was passed on 23.06.2025 by the Ld. Adjudicating Authority in IA (IBC) /931 / 2025, directing the Appellant to vacate and handover certain assets in his possession, which he challenged by filing Company Appeal (AT) (Ins) No. 336 / 2025, which too is pending consideration without grant of any interim order. Any subsequent orders that would have been passed thereof after 23.06.2025, would be nothing but, a consequential order as a consequence of compliance of the earlier order i.e. 23.06.2025, seeking a direction by way of and as against the Appellant for handing over of the possession.

Later on, an order came to be passed on 18.07.2025, by Ld. NCLT in IA (IBC) / 931 (CHE) / 2025 whereby the Ld. Adjudicating Authority had directed the S.H.O. concerned to provide police assistance to ensure handing over of the possession of the Assets in compliance of the earlier order dated 23.06.2025. The said order was challenged by the Appellant by filing Company Appeal (AT) (CH) (INS) No. 516 / 2025.

This Appellate Tribunal had considered the same and by the order passed by us on 16.10.2025, dismissed the Company Appeal on the ground of limitation. Though, this order is yet to be uploaded when this Appeal is being argued, since the order was passed in the Open Court, in the presence of the Appellant, it will be deemed to be an order in the eyes of law, and in the knowledge of the Appellant.

The affirmation of the order dated 23.06.2025, by the Judgment passed by us on 16.10.2025, which was rendered by us in Company Appeal (AT) (CH) (INS) No. 516 / 2025, would be having a consequential effect of affirmation of the directions given to the Appellant to ensure handing over of the possession of the concerned Assets / Properties. But, the same was being thwarted by the Appellant for one reason or other and as a result, Ld. Tribunal was constrained to pass an order of 29.09.2025 in IA(IBC)/931(CHE)/2025, which is impugned in the instant Company Appeal. In the said impugned order, Ld. Tribunal reiterates the directions given in the order of 23.06.2025 & 18.07.2025, directing the Appellant to handover the possession and directing the Liquidator to complete the process with the assistance of S.H.O. M-4 Police Station, Red Hills, Chennai.

When the matter was taken up today, the Ld. Counsel for the Appellant has submitted that, the very propriety of the Application preferred by the Liquidator for ensuring handing over of the possession in compliance of the earlier orders dated 23.06.2025 and 18.07.2025 itself is questionable as the earlier Orders dated 09.08.2024, 23.06.2025 and 18.07.2025 have been challenged by him and are pending consideration before this Appellate Tribunal.

It has to be kept in mind that when the impugned order dated 29.09.2025 is nothing, but an order which is consequential in nature, having being passed in furtherance of the earlier order of 23.06.2025 and 18.07.2025 and the order of 23.06.2025 has been confirmed by us with the dismissal of the Company Appeal (AT) (CH) (INS) No. 516 / 2025, by our Judgment of 16.10.2025, the subsequent order passed on 29.09.2025, which is impugned in the instant Company Appeal, will only be a continuity flowing from the earlier order which stands confirmed in Appeal, to ensure its compliance. At this matured stage, when the order of 29.09.2025 has been passed by the Ld. Adjudicating Authority, the Appellant cannot take the liberty to question the propriety of the application preferred by the Liquidator, when three orders have been already passed on it, and have been confirmed in Appeal, which was for ensuring handing over of the possession, as a consequence of the E-auction that had taken place as back as on 22.05.2025.

During the course of argument, the Ld. Counsel for the Respondent No. 3 / Tenant too, had appeared and submitted that, since he is being the tenant, he has got independent rights to preserve his possession qua the Appellant / Landlord. But, we are in respectful dis-agreement, because all the inter se relationship between the landlord and the tenant, cannot be made as a subject matter of consideration in a proceedings of Liquidation, which has been directed to be carried by the orders of the Ld. Adjudicating Authority against the Corporate Debtor, the Appellant, and the Tenant cannot be introduced to avoid compliance of earlier orders.

The tenant will have to resort to recourses available to him in accordance with law, before an appropriate legal forum available to him for the alleged refund of Security Money, which is being said to have been lying with the Appellant, to be remitted to the Respondent No. 3 as a consequence of the handing over of possession in pursuance to the impugned order of 29.09.2025.

The Ld. Counsel for the Successful Purchaser, had drawn the attention of this Appellate Tribunal to the order passed by the Ld. Adjudicating Authority on 15.10.2025, wherein he has observed that, if we go through the findings which has been recorded therein while issuing directions to provide the assistance of the S.H.O. to take possession, a finding has been recorded in the order of 15.10.2025, that the possession of Asset No. 1 has already been taken up and a compliance report has been submitted. Further the objection, raised by the Ld. Counsel for the Appellant that the Successful Purchaser would not have any say because he was not a party to the proceedings, would have no bearing for the reason, being that after having been declared as a Successful Purchaser, whatsoever the consequences would be flowing as a consequence of any of the proceedings and the possession of the assets which is the subject matter of the instant Company Appeal will automatically be impinging the rights of the said Purchaser who has been affirmed by the Ld. Adjudicating Authority.

Apart from it, Ld. NCLT in its order of 15.10.2025 observed that the Liquidator may take necessary actions to implead the necessary parties including the Successful Auction Purchaser. Therefore, the contentions of Ld. Counsel for the Appellant to the effect that, the Successful Auction Purchaser since not being a party cannot have any say as far as the instant Company Appeal is concerned, is misconceived as the ``Purchaser’’ has acquired rights since having been declared to be the Successful Auction Purchaser, and he has been impleaded in the instant Appeal by the orders of the Tribunal.

Ultimately, we can sum up that the cause as agitated as against the impugned order of 29.09.2025 may not be an independent cause in itself, because whatsoever the action is flowing from the impugned order of 29.09.2025, is a consequence of the earlier orders of 23.06.2025 and 18.07.2025 which have been confirmed with dismissal of Appeal. Besides that, it has also been brought to the notice by the Ld. Counsel for the Respondent that, owing to the order passed by the Tribunal on 15.10.2025, which is subsequent to the impugned order, the cause, which has been sought to be agitated, does not survive as of now, owing to the fact that the possession has been taken in relation to the Asset No. 1 and the same has been observed in the order of 15.10.2025 passed by the Ld. Adjudicating Authority.

The Appellant at different stages, has preferred, various Company Appeals against the interlocutory orders passed against him, the details of which has already been dealt with in the order. As of now, as against the order of 29.09.2025 which is subject matter of challenge in the instant Company Appeal, no cause as such would survive in favour of the Appellant, until and unless he questions the order dismissing his Company Appeal (AT) (CH) (INS) No. 516 / 2025, which may not be of any use as such, owing to the subsequent order passed by the Ld. Tribunal on 15.10.2025, where the finding has been recorded with regards to the handing over of possession of Asset No. 1.

Since, the impugned order of 29.09.2025 does not have its independent existence at all in the eyes of law and it is nothing but a continuation and in compliance to the orders issued on 23.06.2025 and 18.07.2025, the Company Appeal, as against the impugned order of 29.09.2025 since being consequential in nature to the earlier orders would not be tenable. Accordingly, the Company Appeal (AT) (CH) (INS) No. 551 / 2025, is dismissed. The connected pending Interlocutory Applications, if any, would stand closed.