Pramod Kumar Misra vs M/S Duke Fashions (India) Ltd. & Ors.

The two Interlocutory Applications before this Tribunal, IA No. 1975 of 2023 and IA No. 1991 of 2023, were initially filed by Sh. Navneet Gupta, the then Resolution Professional (hereinafter referred to as the 'RP') of M/s Venus Garments (India) Limited (hereinafter referred to as the 'Corporate Debtor' / 'CD') under Section 60(5) read with Sections 18 and 25 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the 'IBC' / 'Code'). Since, common issues arise from the same liquidation proceedings initiated in the Petition bearing CP(IB) No. 66 of 2019.

IA No. 1975 of 2023 has been filed against the Respondents, M/s Duke Fashions (India) Ltd., (hereinafter referred to as the ‘M/s Duke Fashions) and its Directors. The reliefs prayed for by the Applicant, extracted verbatim from the Application, are as follows:

IA No. 1991 of 2023 has been filed by the Applicant against the Respondents, M/s UV & W Products Private Limited, (hereinafter referred to as the ‘M/s UV & W Products) and its Directors. The reliefs prayed for, reproduced verbatim from the Application, are set out below:

In pursuance to the Liquidation Order dated 22.07.2025 passed by this Tribunal, Sh. Pramod Kumar Misra was appointed as Liquidator of the Corporate Debtor, Venus Garments (India) Limited, who stands substituted as Applicant in place of the erstwhile Resolution Professional, Sh. Navneet Gupta, by way of an Amended Memo of Parties dated 26.03.2026, filed in both the Applications.

The brief facts, as stated by the Applicant, which are relevant for the adjudication of the present Applications, i.e. IA No. 1975 of 2023 and IA No. 1991 of 2023, are set out hereunder:

The case of the Respondent(s), as emerging from the Replies filed and the submissions advanced by Ld. Counsel, is summarised as under:

The case of the Applicant, as emerging from the applications, Rejoinders filed in response to the above Replies, and the submissions advanced by Ld. Counsel, is summarised as under:

It is contended that five auctions conducted by the Liquidator have failed solely on account of the Respondents' continued occupation. Directing the Liquidator to proceed before the Rent Controller would render the IBC's time-bound liquidation mandate entirely nugatory, as the Rent Controller cannot consider the interests of the creditors of the Corporate Debtor, cannot enforce Section 36 of the IBC, and cannot order the sale of the properties as part of the liquidation estate. The occupation of the Corporate Debtor's prime assets by related parties of the Suspended Board, at zero effective rent, under void and unstamped instruments, while actively frustrating five auctions, constitutes an abuse of process that merits no equitable protection from this Tribunal.

Having considered the material placed on record and the arguments advanced by Ld. Counsel for the parties, the following issues arise for determination:

Issue No. 1: Whether the present Applications, originally filed under Section 60(5) read with Sections 18 and 25 of the IBC by the then Resolution Professional, are maintainable at the instance of the Liquidator, or are rendered infructuous by the Liquidation Order dated 22.07.2025?

Issue No. 2: Whether this Tribunal, in exercise of powers conferred under Section 60(5) read with Sections 35, 36, and 238 of the IBC, direct handover of possession of the Karabara Property and the Hussainpura Property forming part of the liquidation estate?

So far as the first issue is concerned, the Respondents have taken the preliminary objection that both the IAs, i.e., IA No. 1975 of 2023 and IA No. 1991 of 2023, filed under Section 60(5) read with Sections 18 and 25 of the Code, expressly applicable to the Resolution Professional, became infructuous when this Tribunal passed the Liquidation Order dated 22.07.2025, and the RP was relieved. They place reliance on Kiran Singh v. Chaman Paswan, AIR 1954 SC 340, for the proposition that a fundamentally misconceived statutory foundation cannot be cured by a procedural direction. We are unable to accept this contention. The CIRP and the liquidation process under the IBC do not constitute independent or discrete proceedings. They form a single, seamless statutory continuum as the Code itself contemplates that an unsuccessful CIRP leads inevitably into liquidation, with the Liquidator stepping into the shoes of the estate previously managed by the RP. An application filed for the benefit of the insolvency estate during CIRP does not dissolve upon the commencement of liquidation. It survives as a pending matter to be pursued by the Liquidator, who, by statute, assumes control of the same estate in furtherance of the same underlying objective, i.e., to realise the value of assets for equitable distribution to creditors.

This Tribunal vide Liquidation Order dated 22.07.2025 specifically directed the Liquidator to "follow up on the pending applications for disposal during the process of Liquidation, including initiation of steps for recovery of dues of the Corporate Debtor as per law." That direction is a judicial order, and it cannot be rendered ineffective by a technical plea.

The Respondents' reliance on Kiran Singh v. Chaman Paswan 1955 SCR 1 117 is misplaced. That case concerned a court that acted entirely without pecuniary jurisdiction, rendering its proceedings and final decree a nullity from inception. The present case is distinguishable and does not suffer from any such inherent lack of jurisdiction, as this Tribunal is the forum with complete jurisdiction over the liquidation proceedings. It is an undisputed fact that the Corporate Debtor is the absolute and lawful owner of the subject properties, which legally form an integral part of the liquidation estate. Under Section 35(1)(b) read with Section 36(1) of the Code, taking custody and possession of the liquidation estate's assets is the mandatory statutory duty of the Liquidator. Therefore, an application filed by the Liquidator in discharge of this statutory duty before this Tribunal is perfectly maintainable and cannot be equated to a proceeding lacking inherent jurisdiction. In our considered view, the question that arises is not one of jurisdiction, for this Tribunal's jurisdiction over the liquidation of the Corporate Debtor is complete and exclusive, but of the operative statutory provision under which the Liquidator prosecutes these applications, namely, whether it is Sections 18 and 25 of the Code, applicable during CIRP, or Section 35 of the Code, applicable during liquidation. Both provisions, i.e., sections 18 and 35 of the Code, vest substantively similar powers, which are the mandatory duty to take custody and control of all assets of the Corporate Debtor. The relief sought remains the same; only the statutory provision shifts. That shift is, at most, procedural in character and cannot be permitted to defeat a substantive and mandatory statutory obligation.

The Hon’ble NCLAT in Adinath Jewellery Exports v. Brijendra Kumar Mishra, Liquidator of Shrenuj Co. Ltd., CA(AT)(Ins.) No. 748/2022 has specifically held under paragraphs 41 and 42 that the powers of the Liquidator under Section 35 are in pari materia with those of the RP under Section 18, and that the Liquidator is fully empowered to pursue applications for recovery of possession of corporate debtor assets. Para 42 is reproduced herein for reference.

Section 35(1)(b) mandates the Liquidator to "take into his custody or control all the assets, effects and actionable claims of the corporate debtor." The prosecution of these applications by the Liquidator is therefore not a matter of choice but is the discharge of a mandatory statutory duty that this Tribunal has itself directed him to perform.

Therefore, in view of the above discussion, both Applications, i.e., IA No. 1975 of 2023 and IA No. 1991 of 2023, are maintainable.

Before proceeding further, it is imperative to address the preliminary objections raised by the Respondents regarding the pendency of writ petitions, i.e., CWP-3797 of 2023 and CWP-3910 of 2023, before the Hon'ble Punjab & Haryana High Court, as well as the pendency of IA-995 of 2024, before this Tribunal seeking the recall of the CIRP admission order dated 24.11.2022. We are unable to accede to this prayer. The CIRP admission order dated 24.11.2022 is a final and subsisting order of this Tribunal, having not been challenged before the Hon'ble NCLAT within the prescribed period under Section 61 of the Code, and the pendency of a recall application does not operate as an automatic stay of the liquidation proceedings or of the Liquidator's statutory duties thereunder. Furthermore, a perusal of the interim orders passed by the Hon'ble High Court on 23.02.2023 and 10.03.2023 reveals that they merely restrict the confirmation of the auction of the guarantors' mortgaged properties. In stark contrast, the present eviction applications before this Tribunal seek to recover possession of the Corporate Debtor's own undisputed Karbara and Hussainpura properties. These properties legally form part of the liquidation estate under Section 36 of the Code. Therefore, the property specific protections granted by the Hon'ble High Court to the guarantors' personal assets have no bearing on the Liquidator's statutory right and mandatory duty to recover possession of the Corporate Debtor's estate.

The Respondents have placed primary reliance on Embassy Property Developments Pvt. Ltd. v. State of Karnataka, (2020) 13 SCC 308 for the proposition that NCLT jurisdiction under Section 60(5) is confined to matters arising solely from the insolvency of the Corporate Debtor and cannot be extended to what they characterise as a landlord-tenant dispute governed by State legislation.

In Embassy Property (supra), the question before Hon’ble Supreme Court was whether the NCLT could, under Section 60(5), adjudicate a dispute arising from the State Government of Karnataka's decision not to extend a mining lease a decision taken by a statutory/governmental authority in exercise of sovereign public law powers under the Mines and Minerals (Development and Regulation) Act, 1957. In the present Applications, no governmental authority is a party, and no public law decision is being challenged. The Corporate Debtor is admittedly the absolute owner of both properties, and the Respondents are private and related-party occupants claiming under documents executed with the Corporate Debtor itself. This precise distinction was drawn by the Hon’ble Supreme Court itself in para 42 of Victory Iron Works Ltd. v. Jitendra Lohia, (2023) 7 SCC 227, which is reproduced below:

Before proceeding further, this Tribunal must first address the character of the subject properties and the statutory framework within which this dispute falls to be adjudicated.

The subject properties are unequivocally and admittedly assets of the Corporate Debtor. The Karabara Property and the Hussainpura Property are reflected in the balance sheets and books of accounts of the CD, Venus Garments (India) Limited. This is not in controversy as the Respondents themselves acknowledge that the Corporate Debtor is the owner of both properties. It is accordingly beyond dispute that both properties constitute assets of the Corporate Debtor and, as such, form part of the liquidation estate within the meaning of Section 36 of the IBC. Section 36(3)(a) is reproduced herein for ease of reference.

The IBC vests comprehensive powers in the Resolution Professional and the Liquidator, and in this Tribunal, to deal with all matters relating to the assets of the Corporate Debtor. Section 18(1)(f) specifically empowers the IRP/RP to take custody and control of all assets of the Corporate Debtor, including assets that may or may not be in the possession of the Corporate Debtor. Sections 35(1)(b), (e), (k), and (l) vest the Liquidator with pari materia powers, including the power to take possession of and realise all assets of the Corporate Debtor. These are not just enabling powers; they are mandatory statutory duties. A Liquidator who fails to pursue recovery of a liquidation estate asset that is being wrongfully withheld, is in dereliction of a statutory duty. It is against this statutory backdrop that the Respondents' contention that this Tribunal lacks jurisdiction and that the Liquidator must proceed before the Rent Controller falls to be examined.

In the present Applications, the Liquidator's need to take possession of the Karabara and Hussainpura Properties arises solely because of the liquidation of the CD. The Liquidator did not exist before the liquidation. The liquidation estate did not vest before the liquidation. The obligation to deliver possession to the Liquidator arose under Section 36(1) of the Code, a post-CIRP, liquidation-stage statutory obligation that exists only insofar as the CD is insolvent. Without the liquidation of Venus Garments, there would be no occasion for either IA No. 1975 of 2023 or IA No. 1991 of 2023. The nexus with the insolvency is not incidental; it is complete and causal. This dispute has arisen solely on account of the insolvency of the Corporate Debtor; this Tribunal is therefore fully empowered to adjudicate it under Section 60(5)(c) of the Code.

In Jhanvi Rajpal Automotive Pvt. Ltd. v. Resolution Professional, CA(AT)(Ins.) No. 1417 of 2022, the Hon’ble NCLAT has held that eviction proceedings by the RP/Liquidator before the NCLT are maintainable. The Hon’ble NCLAT specifically held that Embassy Property (supra) has no application to cases where the Corporate Debtor is the owner/landlord, the ratio of Embassy Property is expressly confined to situations where the Corporate Debtor is a lessee seeking to assert rights against a governmental authority. At paragraph 20 of the Judgment Hon’ble NCLAT underscored the intent and purpose of the IBC, which is to ensure that the assets of the Corporate Debtor are realised in a time-bound manner for the benefit of the creditors, and any obstacle to that realisation, including wrongful occupation of the Corporate Debtor's property, is a matter arising in relation to the insolvency that this Tribunal has jurisdiction and duty to address. Paras 14, 17 and 20 of Jhanvi Rajpal (supra) are reproduced below:

In the present case, the Alleged Lease Deeds, based on which the Respondents seek to justify their continued occupation of the Corporate Debtor's assets, purporting to create leasehold interests for a fixed term of 30 years, are instruments that are mandatorily required to be registered under Section 17(1)(d) of the Registration Act, 1908 read with Section 107 of the Transfer of Property Act, 1882. Both the Alleged Lease Deeds are admittedly unregistered. By operation of Section 49 of the Registration Act, an unregistered document required to be compulsorily registered cannot affect any immovable property comprised therein, cannot be received as evidence of any transaction affecting such property, and cannot be acted upon for the purpose of creating, transferring, or extinguishing any right in such property. The Alleged Lease Deeds are accordingly void in the eyes of the law and have no legal sanctity for the purpose of conferring any right of occupation on the Respondents and cannot be relied upon to resist the Liquidator's exercise of his statutory duty under Sections 35 and 36 of the Code.

Additionally, the Respondent Directors of both M/s Duke Fashions and M/s UV & W Products are admittedly related parties of the Corporate Debtor as defined under Section 5(24) of the Code, being entities and individuals controlled by the same family that promoted and managed Venus Garments, the CD herein. Their interest in resisting the Liquidator's recovery of these assets is not the interest of an arm's length occupant asserting an independent legal right but of related parties whose continued occupation is directly and materially adverse to the liquidation estate and to the creditors it is meant to serve.

Recently, in Classic Marble Company Pvt. Ltd. v. Truvisory Insolvency Professionals Pvt. Ltd. & Anr., CA(AT)(INS) No. 187 of 2026, Hon’ble NCLAT held in unequivocal terms that the NCLT has jurisdiction to direct eviction of tenants, licensees, and occupants from the premises of a Corporate Debtor, and that the RP/Liquidator is not required to resort to civil proceedings or rent control proceedings to recover possession. Hon’ble NCLAT also categorically addressed the nexus with insolvency, holding that when the dispute pertains to the recovery of assets forming part of the liquidation estate of the Corporate Debtor which is being held by an occupant whose continued presence directly obstructs the realisation of that estate, the dispute is inextricably connected to and arises from the insolvency, and the NCLT's jurisdiction under Section 60(5) is fully attracted. This judgment, being the most recent authoritative pronouncement of Hon’ble NCLAT on the precise question before this Tribunal, is binding on this Bench. The relevant excerpts are reproduced for reference:

The Hon’ble NCLAT in Adinath (supra) also specifically addressed the overriding effect of the IBC with precision. At paragraph 48, the Hon’ble NCLAT held:

We find guidance in the Hon’ble NCLAT's judgment in Fivebro Water Services Pvt. Ltd. v. Bijay Murmuria, Ashit Dhirajlal Doshi (Liquidator), CA(AT)(Ins.) No. 1730 of 2025, wherein the Hon’ble NCLAT, drawing from Gujarat Urja Vikas Nigam (supra), reproduced with approval the following passage:

We have carefully considered the Respondents' reliance on Sumati Suresh Hegde v. Anand Sonbhadra, (2025) ibclaw.in 29 NCLAT, and find it distinguishable on facts fundamental to the Hon’ble NCLAT's reasoning therein namely, the existence of a Small Causes Court decree expressly declaring the occupant a tenant, and a direct judicial admission of tenancy by the Corporate Debtor itself in its own eviction suit. Neither circumstance exists in the present cases. We further note that the subsequent judgments of the Hon'ble NCLAT in Classic Marble (supra) decided 27.03.2026 and Fivebro Water Services Pvt. Ltd. (supra) decided 07.01.2026, both rendered after Sumati Suresh Hegde, have affirmatively upheld the NCLT's jurisdiction to direct eviction from liquidation estate assets and the Liquidator's authority to recover possession from related-party occupants under Section 60(5). Ratio in the case of Sumati Suresh Hegde accordingly does not govern or bar the present applications.

We also deal with the Respondent’s argument that Section 238 of the IBC has no application. It is settled law, as held by the Supreme Court in Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407, that Section 238 is a complete override it does not merely override procedural provisions but overrides any law, substantive or procedural, that is inconsistent with the IBC. The Respondents contend that the East Punjab Urban Rent Restriction Act, 1949 ('EPURRA') creates an absolute bar on eviction and that this bar cannot be crossed by Section 238. This contention has been addressed and rejected in Classic Marble (supra), which specifically held that Section 238 overrides any contrary statutory framework that bars the Liquidator from recovering liquidation estate assets, and that the Rent Controller, standing on the same footing as a Civil Court, has its jurisdiction equally excluded by Section 63 read with Section 238 of the Code.

The purpose and design of the IBC requires emphasis at this stage. The NCLT is enforcing the Liquidator's own statutory duty to realise the liquidation estate for equitable distribution to creditors. The Rent Controller, even assuming it has territorial jurisdiction, cannot enforce Section 36 of the Code. To direct the Liquidator to proceed before the Rent Controller would not only delay the liquidation but also would render the IBC mandate entirely nugatory and reward the related parties whose continued occupation has already frustrated five auction attempts with an indefinite stay of the statutory process. That is not the design of the Code.

In view of the above discussion, we are of the view that this Tribunal has complete jurisdiction to adjudicate the present Applications.

We have considered the Applicant's prayer for payment of Rs. 50,00,000/- in IA No. 1975 of 2023 and Rs. 15,00,000/- in IA No. 1991 of 2023, claimed as rent arrears along with interest. The Applicant has submitted that the amounts so claimed are in the nature of compensation for use and occupation of the subject properties. The determination of the said prayer does not fall within the jurisdiction of this Tribunal, and the Applicant/Liquidator is accordingly at liberty to pursue such recovery before a forum of competent jurisdiction.

For the aforesaid reasons and circumstances of the case and by taking into consideration relevant law on the issue, both the Applications i.e., IA No. 1975 of 2023 and IA No. 1991 of 2023 in CP (IB) NO. 66/CHD/PB/2019 are hereby disposed of with the following directions:

Accordingly, I.A. No. 1975 of 2023 and I.A. No. 1991 of 2023 in CP (IB) NO. 66/CHD/PB/2019 are allowed and disposed of.