RP running Corporate Debtor’s Business, is Best Person to Decide what Part of Business to be Carried Out: NCLAT [Read Order]

The New Delhi Bench of the National Company Law Appellate Tribunal ( NCLAT ) ruled that the Resolution Professional (RP) running Corporate Debtor’s business, is the best person to decide what part of the business is to be carried out. The Appellant claims to be allottee of commercial space by Indirapuram Habitat Centre Pvt. Ltd./ Corporate Debtor. The Appellant was allotted different commercial units in the project developed by the Corporate Debtor. A Memorandum of Understanding ( MoU ) was entered between the Corporate Debtor and the Appellant, by which the Appellant was offered different shops. The Adjudicating Authority by the impugned order refused the prayer of the Appellant seeking a direction to execute Conveyance Deed, relying on the order of the Co-ordinate Bench.

The Counsel for the Appellant, challenging the impugned order submitted that the Appellant who was allottee of commercial space, has paid about 95% of the amount and he was also ready to pay the balance amount for execution of the Conveyance Deed in his favour, which was denied by the impugned order. It is submitted that in earlier Application, the Adjudicating Authority has already passed an order on 31.08.2020 noticing the submission of the RP that after verifying the titles of the allottees, steps shall be taken.

The Counsel appearing for the RP refuting the submissions of the Counsel for the Appellant, contended that Appellant is not entitled for execution of the Conveyance Deed. It is submitted that in the Applications, which were filed by the Appellant before the Adjudicating Authority, in which orders have been passed, there was no prayer seeking any direction to execute the Conveyance Deed and it is during the course of the arguments that the said submission was advanced.

A Three-Member Bench comprising Justice Ashok Bhushan, Chairperson, Barun Mitra, Member (Technical) and Arun Baroka, Member (Technical) observed that “The allottees, cannot as a right claim execution of Conveyance Deed, as has been prayed in the present case before the Adjudicating Authority. The RP, 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 Appellant by making such payers are praying for specific performance of contract entered between the Appellant and the Corporate Debtor.”

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