MR. RAJENDRA K. BHUTTA versus MAHARASHTRA HOUSING AND AREA DEVELOPMENT AUTHORITY THROUGH ITS CHAIRMAN & ANR.

Citation: [2020] 4 S.C.R. 305 · Decided: 19-02-2020 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 7 · see the full citation network in Lexace

Judgment (excerpt)

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MR. RAJENDRA K. BHUTTA
v.
MAHARASHTRA HOUSING AND AREA
DEVELOPMENT AUTHORITY THROUGH ITS
CHAIRMAN & ANR.
(Civil Appeal No. 12248 of 2018)
FEBRUARY 19, 2020
[R. F. NARIMAN, S. RAVINDRA BHAT AND
V. RAMASUBRAMANIAN, JJ.]
Insolvency and Bankruptcy Code, 2016 – s.14(1)(d) –
Interpretation of a Tripartite Joint Development Agreement was
entered into between the society representing persons occupying
tenements, Maharashtra Housing and Area Development Authority
(MHADA) and the Corporate Debtor in a project for the
development of 47 acres of land – The Corporate Debtor entered
into a Loan Agreement with a bank for a sum of Rs. 200 crores –
The Corporate Debtor defaulted in repayment of loan – Consequent
to which, an application u/s.7 of the Code was admitted, appointing
interim resolution professional and a moratorium u/s. 14 was also
declared – After the imposition of the moratorium period u/s. 14,
the MHADA issued a termination notice of the Joint Development
Agreement to the Corporate Debtor – It was further stated that the
Corporate Debtor would have to hand over possession to MHADA,
which would then enter upon the plot and take possession of the
land including all structures thereon – The Appellant-Interim
Resolution Professional filed an application before the NCLT to
restrain MHADA from taking over possession of the land till
completion of the CIRP – The NCLT dismissed the said applciation
and stated that s.14(1)(d) does not cover licences to enter upon
land in pursuance of the Joint Development Agreements – The
NCLAT held that the land belonged to the MHADA and which was
not formally transferred in favour of the Corporate Debtor and
hence, it cannot be treated to be the asset of the ‘Corporate Debtor’
for application of the provisions of s.14(1)(d) of the Code – Before
the Supreme Court, the appellant contended that it is wholly incorrect
to state that a mere ‘licence to enter’ was granted, the reading of
[2020] 4 S.C.R. 305
305
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SUPREME COURT REPORTS
[2020] 4 S.C.R.
the relevant documents as a whole clearly show that the legal
possession was actually handed over to the Corporate Debtor – It
was further contended that any recovery of a property by an owner
where such property is ‘occupied by’ the Corporate Debtor would
clearly fall with s.14(1)(d) – Held: A bare reading of s.14(1)(d) of
the Code would make it clear that it does not deal with any of the
assets or legal right or beneficial interest in such assets of the
Corporate Debtor – Where recovery of property is to be made by
an owner u/s.14(1) (d), such recovery would be of property that is
‘occupied by’ a Corporate Debtor – The expression ‘occupied by’
would mean or be synonymous with being in actual physical
possession or being actually used by – In the instant case, it is
clear that the Joint Development Agreement read with the Deed of
modification has granted a license to the developer (Corporate
Debtor) to enter upon the property, with a view to do all things that
are mentioned in it, there can be no gainsaying that after such entry,
the property would not be ‘occupied by’ the developer – Therefore,
the impugned judgment of NCLAT is set aside and the NCLT is
directed to dispose of the resolution professional’s application.
Maxims – reddendo singula singulis – discussed.
Words and Phrases – ‘occupied by’ and ‘possession’ –
discussed.
Allowing the appeal, the Court
HELD: 1. The provisions of the Joint Development
Agreement would show that, at the very least, a license is granted
in favour of the developer to enter upon the land to demolish
existing structures, construct and erect new structures, and allot
to erstwhile tenants, tenements in such constructed structures
in three categories – (1) the earlier tenants/licensees of structures
that were demolished; (2) tenements to be allotted free of cost
to Maharashtra Housing and Area Development Authority
(MHADA); and (3) what is referred to as “free sale component”
which the developers then sell and exploit to recover or recoup
cost and make profit. It is wholly unnecessary for this Court to
refer to any other clauses of the Joint Development Agreement.
It is also not necessary for the purpose of this case to state as to
whether an interest in property is or is not created by the said
Joint Development Agreement. [Paras 6][320-A-C]
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MR. RAJENDRA K. BHUTTA v. MAHARASHTRA HOUSING AND AREA
DEVELOPMENT AUTHORITY THR. ITS CHAIRMAN
2. A bare reading of Section 

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