Partly allowed

Approval of Resolution Plan - Rsi Private Limited [I.a (Ib) No. 198/KB/2025 in C.P (Ib) No. 730/KB/2019]

NCLT24 Apr 2024I.A (IB) No. 198/KB/2025 in C.P (IB) No. 730/KB/2019

Case brief

AI extract

What is this about?

The NCLT Kolkata Bench rejected the applicant's request to exclude property from resolution assets and dismiss unadjudicated mesne profit claims. The court held that title and mesne profit disputes require civil adjudication. However, it directed the Resolution Professional to treat current rent as CIRP costs and admit verified pre-CIRP contractual rent as operational debt.

What did the court decide?

Directed RP to pay current rent as CIRP cost until Resolution Plan approval and admit pre-CIRP contractual rent as operational debt upon verification. Dismissed exclusion prayer and mesne profit claim

Approval of Resolution Plan - Rsi Private Limited [I.a… — Insolvency and Bankruptcy | NCLT (2024)

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IN THE NATIONAL COMPANY LAW TRIBUNAL

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KOLKATA BENCH (COURT NO.-II)

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KOLKATA

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I.A (IB) No. 198/KB/2025

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In

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C.P (IB) No. 730/KB/2019

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An Application under Section 60(5) read with Section 60(2) of
the Insolvency and Bankruptcy, 2016 read with Rule 11 of the
National Company Law Tribunal Rules, 2016.

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IN THE MATTER OF:

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RSI PRIVATE LIMITED
IN THE MATTER OF:
CALCUTTA PINJRAPOLE SOCIETY

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AND

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……Corporate Debtor

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……Applicant
VERSUS

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MR. PRATAP MUKHERJEE, Resolution Professional of RSI Private
Limited.

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……Respondent

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Date of Pronouncement: 22.01.2026

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IN THE NATIONAL COMPANY LAW TRIBUNAL
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I.A.(IB) No.198/KB/2025
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Coram:

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Shri. Labh Singh, Member (Judicial)

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Ms. Rekha Kantilal Shah, Member (Technical)

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Appearances (via Hybrid Mode):

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Mr. Jishnu Chowdhury, Sr. Adv. ] For the Applicant
Ms. Shruti Singhania, Adv. ]
Mr. Shaunak Mitra, Adv. ]
Ms. Vedika Sureka, Adv. ] For the RP
Mr. Pratap Mukherjee, RP ]

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O R D E R

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Per: Rekha Kantilal Shah, Member (Technical)

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1. This Interlocutory Application has been filed by Calcutta Pinjrapole Society under Section 60(5) read with Section 60(2) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) and read with Rule 11 of the National Company Law Tribunal Rules, 2016 (“NCLT Rules”) inter alia seeking following reliefs:

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a) To direct the Resolution Professional to set aside the property measuring in area 14 Bighas and 1 cottah more or less situated at 30, Goshala Road in Mauza Lillooah Thana Bally in the district of Howrah out of the resolution assets as the said property is completely

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owned and controlled by the Applicant i.e. Calcutta
Pinjrapole Society, a society registered under the
Societies Registration Act, 1860 registered on 25th
March, 1889;

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b)To direct the Resolution Professional to pay a sum
amounting to Rs 68,72,94,678/- (Rupees Sixty-Eight
Crores Seventy-Two Lakhs Ninety-Four Thousand and Six
Hundred Seventy-Eight only) towards the arrears of
rent and mesne profit liable to be paid by the
Corporate Debtor;

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c) Such further order or orders and/or direction or directions as this Hon’ble Tribunal may deem fit and proper in the given facts and circumstances.

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2. Background of the Case

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2.1 The Original Company Petition under Section 10 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “IBC”) read with Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as the “IBC Rules”) was filed by RSI Private Limited (hereinafter referred to as the “Corporate Debtor”) vide C.P (IB) No.730/KB/2019 before the National Company Law Tribunal, Kolkata Bench (hereinafter referred to as “Tribunal”) in which this Tribunal pass

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an order dated 24.04.20241 for initiation of Corporate
Insolvency Resolution Process (hereinafter referred to
as the “CIRP”) of the Corporate Debtor and appointed
Mr. Pratap Mukherjee as the Interim Resolution
Professional (hereinafter referred to as “IRP”).
Subsequently on 24.05.2024 the IRP was appointed as
Resolution Professional (hereinafter referred to as
“RP”) by the Committee of Creditors (hereinafter
referred to as “CoC”).

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2.2 The instant application is filled by Calcutta Pinjrapole Society, registered under Society Legacy Registration No.00571 having its registered office at 34, Armenian Street, Kolkata-700001, West Bengal.

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2.3 The Applicant came to know that CIRP has been initiated against the Corporate Debtor and vide letter dated 09.09.2024² submitted the claim to the RP. The RP vide letter dated 19.09.2024³ directed the Applicant to submit the claim in appropriate form as prescribed under the Code. The applicant vide letter dated 04.10.2024⁴ submitted the claim in Form-B. Thereafter vide letter dated 22.10.2024⁵ the RP rejected the claim of Rs 68,72,94,678/(Rupees Sixty-Eight Crores

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1 Annexure- A

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2 Annexure- H

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3 Annexure- I

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4 Annexure- J

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5 Annexure- K

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Seventy-Two Lakhs Ninety-Four Thousand and Six Hundred
Seventy-Eight only) on the ground that the claim is
completely unilateral and without any reference to the
facts and records.

¶50

2.4 The claim of the Applicant emanates from its status as the lessor of the immovable property admeasuring about 14 Bighas and 1 Cottah, more or less, situated at 30, Goshala Road, Mouza–Lillooah, P.S. Bally, District– Howrah. It is stated that with effect from 01.01.1958⁶ , the Applicant had leased the said property to the Corporate Debtor for a period of 21 years at a monthly rental of Rs 675/-.

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3. Submission of behalf of the Applicant

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3.1Ld. Counsel submits that as per lease deed with
mutual terms and conditions of both the parties i.e.
lessor and lessee on completion of 21 years, may
extend the lease deed for another 5 (five) years by
executing a new Lease Agreement for the said property.
However, to the contrary the Corporate Debtor (Lessee)
on completion of 21 years on 31.12.1978 was found
guilty of wrongfully and illegally changing the
character of the said property during and after expiry
of the terms of the lease. It is further submitted

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6 Annexure- C

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that the Corporate Debtor did not vacate the
possession of the said property even after the expiry
of the term of lease on 31.12.1978.

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3.2Subsequently, the Applicant (lessor) filed a suit
before the Hon'ble Civil Judge (Senior Division) 1st
Court, Howrah vide Title Suit No.101 of 2004 for
recovery of khas possession of the said property and
claim compensation with effect from 01.01.1979 till
the date the khas possession of the said property is
delivered to the Applicant (lessor). It is matter of
record that the Hon'ble Civil Judge (Senior Division)
1st Court, Howrah in Title Suit No.101 of 2004 was
pleased to pass a decree vide dated 21.05.20057
pronouncing a decree to the Applicant for ejectment
and recovery of khas possession of the said property
from the Corporate Debtor within 6 (six) months from
the date of decree and directed the Corporate Debtor
(lessee) to vacate the possession of the said property
failing which the applicant shall be at the liberty to
execute the order and claim compensation at a rate of
Rs 700/- per month from January, 1979 till the date of
getting the physical possession of the said property.

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7 Annexure- D

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3.3 Subsequently, the Corporate Debtor filed an appeal

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before the Hon’ble High Court at Calcutta against
Applicant. Vide order dated 17.10.20128 passed by the
Hon'ble High Court at Calcutta dismissed the said
appeal on the grounds that the Corporate Debtor could
not satisfy the elementary test relating to an offer
for creation of a new tenancy and the acceptance
thereof by the Applicant.

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3.4It is further submitted that the Corporate Debtor
immediately moved to Hon’ble Supreme Court challenging
the judgment and order dated 17.10.2012 passed by the
Hon’ble High Court at Calcutta by filing a petition
for Special Leave to Appeal in Civil No.19628/2013. It
is matter of record that the said appeal was dismissed
by the Hon’ble Supreme Court vide order dated
12.08.20139.

¶66

3.5Ld. Counsel submits that till date the Corporate
Debtor has not vacated the said property and
wrongfully holding the physical possession of the said
property. It is further submitted that till 24.04.2024
the Corporate Debtor is liable for a sum amounting to
Rs.68,72,94,678/- towards the arrears of rent and

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other charges as per the Courts orders.

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8 Annexure- E

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9 Annexure- F

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3.6Ld. Counsel submits that the Applicant is the

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absolute owner of the said property and is in
possession thereof. The Corporate Debtor has no right
or interest in the said property and that during and
after the expiry of term of lease have wrongfully and
illegally making additions and alterations i.e.
violating the provisions of clause (m), (o), (p) of
Section 108 of the Transfer of Property Act, 1882.

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3.7In such circumstances, it is prayed before this
Hon’ble Tribunal to direct the RP to forthwith keep
the above mentioned property out of the resolution
assets as the said property does not and cannot form
part of the resolution process.

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4.Submission on behalf of the Respondent/ RP

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4.1It is an undisputed fact that the Corporate Debtor
was a lessee of lands admeasuring 14 Bigha 1 Katha,
more or less, situated at Plot Nos. 3168, 3169, 3170
of Kh No.491, Plot Nos. 3165, 3166 & 3187 of Kh.
No.858, Plot Nos. 3164 of Kh. Nos. 1095 and 1096, Plot
No. 3171 of Kh. No. 3020 being located at Holding
No.30 Gowshala Road (now Netaji Subhash Road), P.S.
Liluah, P.S. Bally, Dist Howrah ("said Land") since
the year 1958.

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4.2The Applicant herein had filed an eviction suit

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against the Corporate Debtor in 1982. In the eviction
suit numbered as T.S No. 12 of 1982 and renumbered as
T.S No.101 of 2004, decree was passed by the 1st Court
of Ld. Civil Judge (Sr. Division), Howrah on
21.05.2005 ordering the Corporate Debtor to vacate the
said land within 6 months and mesne profit in favour
of the Applicant at the rate of Rs. 700/- per month
from January, 1979 till getting the possession of the
said land.

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4.3Ld. Counsel submits that the Corporate Debtor had
challenged the decree dated 21.05.2005 in appeal
(Title Appeal No.78 of 2005) before the Additional
District Judge, 5th Court at Howrah which had passed a
detailed judgment dated 30.06.201010 allowing the
appeal in part, upholding the decree regarding
delivery of khas possession but setting aside the
direction regarding mesne profit demanding the matter
relating to mesne profit with a direction for the
Learned Court below to determine the same in
accordance with law after giving opportunity to both
the parties for hearing.

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10 Annexure- A of Reply Affidavit of RP

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4.4Ld. Counsel submits that the above order has been
suppressed in the instant application by the

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applicant. From the said order it will appear that the
issue of mesne profit remains to be adjudicated by the
Civil Court and without such adjudication the
Applicant is not entitled to make any claim on such
score. Strictly without prejudice, it is humbly
submitted that adjudication of mesne profit can only
be done upon leading of appropriate evidence and
hearing as per provision of Code of Civil Procedure,
1908 and the RP does not have adjudicatory powers in
this regard particularly regarding determining of
mesne profit.

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4.5Ld. Counsel submits that 2nd appeal preferred by the
Corporate Debtor from the judgment and order dated
June 30.06.2010 came to be dismissed by the Hon’ble
High Court at Calcutta by a judgment and order dated
17.10.2012 and Special Leave Petition therefrom was
also not entertained by the Hon’ble Supreme Court by
the order dated 12.08.2013.

¶91

4.6Ld. Counsel submits that in execution proceedings
filed by the Applicant arising out of the decree dated
21.05.2005, the Applicant itself has claimed mesne
profit at the rate of Rs 700/- per month for the

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entire land. In other words, even as per the
Applicant’s case its claims for mesne profit at the
highest can only be Rs 700/- per month for the entire
land. A copy of execution petition11 along with tabular
statement is attached in the RP’s reply affidavit.

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4.7In the present application, the Applicant has
purported to give a calculation of alleged dues at
Pages 81-83 aggregating to Rs. 68,72,94,678/- as
alleged “arrear rent” from 01.01.1979 till 31.08.2024.
At the very outset, it is submitted that the purported
calculation is ex-facie contrary to the orders passed
regarding determination of alleged occupation
charges/mesne profit. The purported calculation at
Pages 81-83 also destroys the Applicant's reliance on
the eviction proceeding and the execution case filed
therefrom since in the calculation chart, the
Applicant admits that its claim is on the basis of
“new lease” operative for three different periods i.e.
from 01.01.1979 till 31.12.1999, thereafter from
01.01.2000 till 31.12.2020 and finally from 01.01.2021
till 31.08.2024. Strictly without prejudice to the
fact that the alleged claim is completely de-hors the
records and is an imaginary and absurdly inflated

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11 Annexure- B of Reply Affidavit of RP

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figure without any basis, it is humbly submitted that
the Applicant, by making the claim on the basis of a
“new lease”, has waived any right that may have
accrued in its favour in the eviction proceeding. In
other words, the Applicant has voluntarily
relinquished its purported reliance on the eviction
proceeding and orders passed thereon and the Applicant
itself is proceeding on the basis of “new lease”. The
lease, therefore, as per the Applicant's case is
continuing even as on the CIRP commencement date and
thus, the Applicant is estopped in the present
proceeding from basing any claim on the said land
based on the eviction proceedings.

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4.8Ld. Counsel submits that despite the orders passed in

¶103

favour of the Applicant regarding the said land in the
eviction proceedings, the Applicant has knowingly
chosen to voluntarily relinquish any right in its
favour by treating the lease as subsisting on the date
of CIRP commencement. Thus, as per the Applicant,
there is a new lease valid upto 2042 and the Applicant
is estopped from claiming any benefit or right under
the earlier eviction orders. The Applicant cannot be
permitted to resile from its own unequivocal stand
that there was a new lease valid till 2042.

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4.9Ld. Counsel further submits that the Applicant

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wrongly alleges in the application that it is the sole
owner of the said land and that it is also allegedly
in possession thereof. As regards possession, it is an
undisputed matter of record that the Corporate Debtor
has been in exclusive khas possession of the said land
since 1958 and this is also admitted by the Applicant
in proceedings concerning the said land. In fact, the
Applicant's execution petition proceeds on the basis
that the Corporate Debtor is in possession.

¶109

4.10Ld. Counsel submits that as regard the Applicant’s
purported title as owner of the land, such claim is
not supported by the records. There was a decision
taken by the appropriate authority of the Government
of West Bengal in the year 1994 for vesting of the
said land in the State Government. From the records
that have been made available to RP, there have been
numerous litigations that had been instituted in
regard to the decision taken for vesting of the said
land. However, what can be gathered from the records
as on date is that the order of vesting was confirmed
by the appropriate authority sometime in the year
1997. It also transpires that the Applicant has taken
steps to challenge such confirmation of vesting in

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legal proceedings. The Applicant had filed a writ
petition being W.P. 7588 in 2001 which has recently
been transferred by the Hon’ble High Court at Calcutta
by order dated 19.11.2022 to the West Bengal Land
Reforms and Tenancy Tribunal. The said proceeding as
on date is pending before the West Bengal Land Reforms
and Tenancy Tribunal, being numbered as T.A. 1 of 2022
(LRTT).

¶114

4.11Notably, while the aforesaid issue has remained
pending before the LRTT for a final decision on the
challenge of the Applicant herein to the vesting of
the said land, on the Applicant's own application
before the LRTT, there has been an order passed on
12.05.202312 by LRTT directing “a rule of injunction be
issued at once asking the parties to maintain complete
status quo as its (sic) stands today in respect of the
property as involved in this proceeding till next
date.” In other words, the status quo as on the date
of the order i.e. Corporate Debtor being in possession
of the land, is ordered to be maintained. The
Corporate Debtor had also filed an application being
numbered M.A. No.55 of 2024, to intervene in the said

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12 Annexure- C of Reply Affidavit of RP

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proceeding before the LRTT, and such application is
also presently pending adjudication.

¶120

4.12Ld. Counsel submits that the Applicant is inviting

¶121

this Hon’ble Tribunal to adjudicate and determine
issues that are squarely sub-judice before other
judicial fora and thus, the present application is
without jurisdiction. Needless to mention, the
Information Memorandum (“IM”) and Request for
Resolution Plan (“RFRP”) in the present CIRP reflect
accurately the present status of the litigation and
the details of litigations are also mention. The
prospective resolution applicant have been duly
notified and the process is being conducted strictly
in accordance with law.

¶122

5.Rejoinder on behalf of the Applicant

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5.1Ld. Counsel submits that the claim of the Applicant
is a sum of Rs. 68,72,94,678/- along with further
interest, as stated in the said Application. The said
claim arises on the basis of the last paid rate of
rent of Rs.675/- per month (with timely enhancement as
per the lease deed) along with necessary interest.
Even without a decree for mesne profit and/or without
determination, the petitioner is entitled to claim
rent at the last paid rate. This is a crystalized

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claim and the Applicant is entitled to the same. In
any event, this is the minimum that the Applicant will
get upon determination of mesne profit. Therefore, the
petitioner's claim cannot be doubted. That Rs.675/-
was the last paid rent is the admitted position as
would appear from the lease deed dated 9th January,
1958.

¶128

5.2Ld. Counsel submits that the Corporate Debtor instead
of complying the order dated 21.05.2005 of the Civil
Court, filed an appeal via Title Appeal No.78 of 2005
and vide order dated 30.06.2010 the Court allow the
appeal in part and the determination of mesne profit
was set aside but the decree for eviction was upheld.
Henceforth, the appeal upheld the delivery of Khas
possession to the Applicant and till date the same has
not been complied by the Corporate Debtor and the same
has been suppressed in their reply.

¶129

5.3Ld. Counsel submits that the Respondent has admitted
that Rs 700/- is payable per month. It is on this
admission that the Applicant is entitled to proceed.
It is stated that the escalation clauses contained in
the agreement may also be taken into consideration as
evident from the particulars of claim disclosed along
with the application. In the event, the Applicant

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would have taken steps to have further computation of

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mesne profit before the Learned Civil Court, the
Applicant would only have received sums over and above
the aforesaid. Thus, it is on the basis of the
minimum, to which, the petitioner is entitled to, that
the claim has been made.

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5.4Ld. Counsel deny and dispute that the calculation is
contrary to orders passed or that the same would
destroy reliance on eviction proceedings as alleged or
at all. It is submitted that there has been no new
lease admitted by the Applicant. While computing its
claim, the Applicant has merely used the document of
lease. There is no admission and the Applicant
proceeds on the basis that the Corporate Debtor is
trespasser. It is deny that there has been any wavier
of eviction proceedings or that there has been any
relinquishment of stand taken in eviction proceedings.
It is further deny that there was any lease continuing
as on CIRP commencement date or that the Applicant is
estopped from basing any claim on the eviction
proceedings. It is deny that there is any new lease
upto 2024.

¶136

5.5Ld. Counsel submits that the Corporate Debtor
incorrectly attempted to contend that it was entitled

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to remain as a raiyat on the property and on that
basis filed proceedings before the West Bengal Land
Reforms and Tenancy Tribunal in case no. O.A. 1081 of
2014. The Hon’ble Tribunal in its order 02.05.2014
rejected the order of decree. It is submitted that the
Hon’ble High Court of Calcutta in W.P.L.R.T No.160 of
2014 was please to pass order on 14.09.202313 by
setting aside the impugned order of the West Bengal
Land Reforms and Tenancy Tribunal in AO 1081 of 2014
and directing the executing court to comply with the
Order dated 12.08.2013 passed by the Hon’ble Supreme
Court of India in SLP No.19628 of 2013 as
expeditiously and preferably within 6 months from the
date of communication of this independent order,
directing to return of possession.

¶141

5.6Ld. Counsel submits that the property in question is

¶142

not being used by the Corporate Debtor and is lying
fallow. It is not necessary for the Corporate Debtor
to hold the same as a going concern. Therefore, not
only should the said property not be included in the
information memorandum, but the Corporate Debtor
should also be directed to forthwith return possession
of the property to the Applicant. Neither is the

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13 Annexure- D of Applicant’s Rejoinder

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property required for the Corporate Debtor to be
maintained as a going concern and nor can such
contention be raised.

¶148

5.7Ld. Counsel deny that there is any imaginary or
inflated figure given in pages 81-83 of the instant
application or that the claim is not capable of
admission.

¶149

5.8 Ld. Counsel deny that the Applicant is not owner of the land. The Corporate Debtor is wrongfully in possession of the said property.

¶150

5.9Ld. Counsel deny that there is any suppression of
facts and further deny that the said property has been
vested on the Government of West Bengal.

¶151

5.10 Ld. Counsel states that there is no vesting in the eye of law and in any event, by reason of estoppel, the Corporate Debtor as tenant of the Applicant is not entitled to question right of title of the Applicant in the said property.

¶152

5.11 Ld. Counsel states that information memorandum contains incorrect facts and the said property should not have included in the resolution assets.

¶153

5.12 Ld. Counsel further submits that from the admission of the Corporate Debtor into CIRP, the sums payable by the Corporate Debtor to the Applicant should be

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treated as CIRP cost. A computation14 of the same is

¶158

set out in a schedule attached in the rejoinder.

¶159

6.Analysis and Findings

¶160

6.1We have gone through the case file carefully and
perused the pleadings of the parties and documents
placed on record by the parties and heard the
arguments put forth by learned Counsels for the
parties; and after hearing the learned counsels for
the parties, we shall now proceed to consider the
present application on its merits, specifically within
the ambit of points involved in the instant
application.

¶161

6.2 At the outset, it is required to be examined whether such reliefs fall within the limited jurisdiction of this Adjudicating Authority under the IBC, 2016 and whether the Applicant has established a crystallised legally enforceable claim.

¶162

6.3It is not in dispute that the relationship between
the Applicant and the Corporate Debtor originated from
a lease executed in the year 1958, which admittedly
expired in the year 1978. It is also not in dispute
that eviction proceedings were initiated and
ultimately a decree for delivery of khas possession

¶163

14 Annexure- E of Applicant’s Rejoinder

¶164

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IN THE NATIONAL COMPANY LAW TRIBUNAL
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¶167

was upheld upto the stage of the Hon’ble Supreme
Court. However, equally undisputed is the fact that,
in appeal, the decree relating to mesne profit was set
aside and remanded for fresh adjudication by the Civil
Court. Consequently, as on date, there is no final
adjudication or determination of mesne profit by any
competent civil forum. Further, the ownership of the
said property is in dispute and adjudication is still
pending before the competent forum according to the
facts and circumstances presented before us.

¶168

6.4This Adjudicating Authority observes that the prayer

¶169

for the exclusion of the land from the resolution
assets, it is borne out from the records that the
physical possession of the land has continued with the
Corporate Debtor since 1958 and also as on the CIRP
commencement date as submitted by the RP. The
execution proceedings themselves proceed on the
admitted premise that possession has not yet been
recovered by the applicant. The issue of vesting of
the said land in the State of West Bengal is
admittedly pending before the West Bengal Land Reforms
and Tenancy Tribunal, where a status quo order is
operating. The Hon’ble Supreme Court in Embassy
Property Developments Pvt. Ltd. Vs. State of Karnataka

¶170

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I.A.(IB) No.198/KB/2025
C.P (IB) No.730/KB/2019

¶173

MANU/SC/1661/2019, has unequivocally held that the

¶174

jurisdiction of the NCLT does not extend to adjudicate
title, ownership, state vesting or matters arising
under special statutes, and that such issues must be
determined by the competent statutory fora. The
Supreme Court in above mention case has categorically
held that the NCLT is creature of statute and cannot
assume wide civil court powers outside the IBC.
Relevant para of the order is extracted below:

¶175

 “29. NCLT is not even a Civil Court, which has
jurisdiction by virtue of Section 9 of the Code of
Civil Procedure to try all suits of a civil nature
excepting suits, of which their cognizance is
expressly or impliedly barred. Therefore, NCLT can
exercise only such power within the contours of
jurisdiction as prescribed by the statute, the law
in respect of which it is called upon to
administer.”

¶176

In view of this binding principle, this Adjudicating
Authority cannot venture into the question of
ownership or vesting of the subject land while
exercising jurisdiction under the IBC.

¶177

6.5We note that the jurisdiction under Section 60(5) is

¶178

not plenary and cannot be expanded to matters dehors

¶179

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¶182

CIRP. We further place reliance on Gujarat Urja Vikas
Nigam Vs Amit Gupta (Civil Appeal 9241/2019) and TATA
Consultancy Services Ltd. Vs Vishal Ghisulal Jain
(Civil Appeal 3045/2020) to held that contractual and
civil disputes predating CIRP fall outside the scope
of this Adjudicating Authority as the present dispute,
being a pre-CIRP title and possession dispute, is
beyond the Tribunal’s jurisdiction.

¶183

6.6It is observed that, during hearing, the Applicant
asserted ownership over the said property. However,
despite such assertion, the Applicant failed to place
on record any cogent documentary evidence, such as a
registered sale deed, deed of conveyance, or any other
title document, to substantiate its claim of
ownership. In the absence of such foundational
documents establishing title, this Adjudicating
Authority is unable to accept the Applicant’s claim of
ownership merely on the basis of oral submissions or
bare assertions. Such omission assumes significance,
particularly in view of the disputed nature of the
property and the pending litigations, and constrains
this Adjudicating Authority to treat the claim with
due caution.

¶184

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¶187

6.7We further observe that no asset of a Corporate

¶188

Debtor can be craved out from the CIRP or the
resolution plan once it forms part of the corporate
debtor’s estate. Hon’ble Supreme Court in Jaypee
Kensington Boulevard Apartments Welfare Association
Vs. NBCC (India) Ltd., (2021) ibclaw.in 63 SC, has
held that once the CoC has approved a resolution plan
and such plan contemplates treatment of assets of the
corporate debtor as a whole, individual stakeholders
cannot seek exclusion of any particular asset by
raising disputes at a belated stage. Accepting such a
position would result in uncertainty and derailment of
the resolution process.

¶189

6.8Regarding claim of mesne profit arising out of

¶190

arrears of rent, first let us examine various
provision about Mesne Profit under Code of Civil
Procedure (“CPC”). Section 2(12) of Code of Civil
Procedure, 1908 defines mesne profits which reads as
under:-

¶191

“Mesne Profits” of property means those profits
which the person in wrongful possession of such
property actually received or might with ordinary
diligence have received therefrom, together with
interest on such profits, but shall not include

¶192

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¶195

profits due to improvements made by the person in
wrongful possession.”

¶196

6.9Mesne profits involve complex assessments (rental
value, damages, etc.) on a case-by-case basis, often
requiring a full inquiry under the CPC, particularly
Order XX Rule 12 which is best suited for civil
courts. Order XX Rules 12 talks about Decree for
possession and mesne profits which reads as under:-

¶197

“(1) Where a suit is for the recovery of

¶198

possession of immovable property and for rent or

¶199

mesne profits, the Court may pass a decree—

¶200

(a) for the possession of the property;

¶201

[(b) for the rents which have accrued on the
property during the period prior to the

¶202

institution of the suit or directing an inquiry as
to such rent.

¶203

(ba) for the mesne profits or directing an inquiry
as to such mesne profits;]

¶204

(c) directing an inquiry as to rent or mesne
profits from the institution of the suit until—

¶205

(i) the delivery of possession to the decree-
holder,

¶206

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(ii) the relinquishment of possession by the
judgment-debtor with notice to the decree-holder
through the Court, or

¶210

(iii) the expiration of three years from the date
of the decree, whichever, event first occurs.

¶211

(2) Where an inquiry is directed under clause (b)
or clause (c), a final decree in respect of the
rent or mesne profits shall be passed in
accordance with the result of such inquiry.”

¶212

Plain reading of the above order reveals that no mesne
profits could be paid without any final adjudication
under the provisions of Order XX Rule 12 of the Code
of Civil Procedure, 1908. The mesne profit is akin to
damages and without proving the same in a Civil Court,
no person is entitled to the same.

¶213

6.10The Contention of the Applicant that he is entitled
to mesne profit, even without adjudication, cannot be
accepted. Under settled principles of civil law, a
claim for mesne profit necessarily requires judicial
determination upon evidence, particularly after the
appellate court has expressly set aside the earlier
direction and remanded the issue. The RP, being a
facilitator of the CIRP process, has no adjudicatory
jurisdiction to quantify or determine mesne profits.

¶214

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¶217

Any admission of such a disputed and unadjudicated
claim would amount to usurping the jurisdiction of the
Civil Court. We observe that the RP, while examining
claims under the IBC, performs only a verification and
collating function and does not possess adjudicatory
powers to determine mesne profit

¶218

6.11The calculation of Rs 68.72 crores placed by the
Applicant in page no 81 to 83 of the application is
based on self-assumed escalation and estimation,
further, the alleged “new lease periods”, which is ex-
facie inconsistent with the Applicant’s own stand in
the eviction proceedings where the Corporate Debtor
has been treated as a trespasser. Such contradictory
pleas substantially weaken the credibility and legal
sustainability of the claim. A unilateral computation,
unsupported by any decree or final adjudication,
cannot be treated as a “claim” capable of admission
under the IBC.

¶219

6.12In the matter of Vijayalakshmi Enterprises v.
Malabar Hotels Pvt. Ltd. (2020) ibclaw.in 362 NCLAT)
the Hon’ble NCLAT held as follows:

¶220

“3. ******************** Adjudication has to be, in

¶221

respect of the claim, by a Civil Court and other
adjudicatory mechanism like Arbitral Proceedings.

¶222

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¶225

Proceedings under Insolvency and Bankruptcy Code,
2016 are only meant to resolve the insolvency issues
and not adjudge a claim.”

¶226

Proceedings under IBC, 2016 are only meant to resolve
the insolvency issues and does not adjudge a claim
arises out of unadjudicated mesne profit.

¶227

6.13 Thirdly, the applicant has claimed unpaid rent
arrears arising out of the lease agreement dated
09.01.1958. To determining the admissibility and
treatment of such claims under the IBC, 2016, it is
necessary to draw a clear distinction between arrears
accruing prior to the CIRP commencement date and those
accruing post CIRP commencement date.

¶228

6.14Regarding arrears of rent post CIRP commencement

¶229

date, what does emerge from the record is the
contractual rent under the original lease deed of 1958
of Rs. 675 per month, which formed the last agreed and
paid rate during the subsistence of the lease period.
To the extent that rent was contractually payable up
to 31.12.1978, and to the extent such arrears stand
established on the basis of contractual terms- that
portion constitutes a crystallised liability within
the meaning of the IBC.

¶230

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C.P (IB) No.730/KB/2019

¶233

6.15The Code mandates that costs incurred during CIRP
shall be treated as Insolvency Resolution Process
Costs (CIRP Costs) and shall be paid in priority.
Where the Corporate Debtor continues to occupy leased
premises during CIRP, rent payable for such period is
not a past liability but a current operational
necessity, without which the Corporate Debtor cannot
lawfully retain possession or continue its operations.

¶234

6.16Therefore, rent accruing after the insolvency
commencement date, so long as the Corporate Debtor
continues in possession of the premises, constitutes a
cost incurred for preserving the Corporate Debtor as a
going concern and squarely falls within the ambit of
CIRP costs, payable in priority, as required under the
Code.

¶235

6.17 Regarding arrears of rent for pre CIRP commencement date, we observe that Rent which fell due and payable prior to the insolvency commencement date constitutes a claim within the meaning of Section 3(6) of the IBC, 2016 and is required to be dealt with in accordance with the distribution mechanism under the Code.

¶236

6.18 Such pre-CIRP rent arrears, however, are admissible only to the extent and strictly in terms of the original lease agreement of 1958 and at the last

¶237

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¶240

admitted contractual rate. Any claim for escalated
rent, mesne profit, interest or damages, being
unadjudicated, cannot be admitted in CIRP.

¶241

6.19 Accordingly, the Applicant’s claim towards pre-CIRP rent arrears shall be limited strictly to contractual rent payable under the lease agreement and shall rank as an operational debt under the Code.

¶242

6.20Lastly, the reliefs sought by the Applicant would
necessary requires this Adjudicating Authority to
adjudicate (i) title and vesting of land (ii) legality
of possession (iii) quantification of unadjudicated
mesne profit. All these are pure civil disputes and
already pending before the competent judicial and
statutory forum.

¶243

6.21 It is also noted that the RP has duly disclosed the pendency of litigation in respect of the said property. The successful resolution applicants have, therefore, been made aware of the existing disputes, and the CIRP is being conducted with full disclosure of material facts.

¶244

7. In view of the foregoing discussion and settled legal position, this Adjudicating Authority holds that:

¶245

I. The monetary claim of the Applicant regarding mesne

¶246

profit is not a crystallised or legally determined

¶247

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¶250

debt and is, therefore, not capable of admission in
the CIRP.

¶251

II.The prayer for exclusion of the land from the
resolution assets involves serious and complex
disputed questions of title, possession and vesting,
which are beyond the jurisdiction of this Adjudicating
Authority under IBC.

¶252

III.We direct the RP of the Corporate Debtor to pay the
arrears of rent as per the terms of the original lease
deed of 1958, to the Applicant from the CIRP
commencement date till the approval of the Resolution
Plan as CIRP cost.

¶253

IV. We direct the RP to admit Pre-CIRP arrears of rent after verification, as an operational debt only to the extent of contractual rent payable under the original lease deed of 1958 from 01.01.1979 till commencement of CIRP date. The same shall be dealt in resolution plan in accordance with the provisions of the Code.

¶254

8.The Applicant is at liberty to pursue its remedies for
recovery of possession and for determination of mesne profit
before the competent Civil Court and the appropriate
Statutory Forum in accordance with law. However, no
interference is warranted in the conduct of the CIRP at this
stage.

¶255

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I.A.(IB) No.198/KB/2025
C.P (IB) No.730/KB/2019

¶258

9. For the reasons discussed above, the present application I.A (IB) No. 198/KB/2025 is partly allowed and disposed of.

¶259

10. The Registry is directed to send e-mail copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps.

¶260

11. Let the certified copy of the order may be issued, if applied for, upon compliance of all requisite formalities.

¶261

(Rekha Kantilal Shah) (Labh Singh)
 Member (Technical) Member (Judicial)

¶262

Order signed on the 22th day of January 2026

¶263

S.T. LRA

¶264

Page 32 of 32

Approval of Resolution Plan - Rsi Private Limited [I.a (Ib) No. 198/KB/2025 in C.P (Ib) No. 730/KB/2019]

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Approval of Resolution Plan - Rsi Private Limited [I.a (Ib) No. 198/KB/2025 in C.P (Ib) No. 730/KB/2019]

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