No breach of Section 14(1)(d) of IBC in case of auction of Subsidiary Company’s assets/facility (under SARFAESI) which was handed over to Corporate Debtor for operation and maintenance – Wind World (India) Ltd. through Mr. Shailen Shah, RP Vs. Indian Renewable Energy Development Agency Ltd. – NCLAT New Delhi

In this case, a Facility Agreement for operation and maintenance was entered between the Corporate Debtor and Subsidiary Company of CD.

Lender of Subsidiary Company issued an EoI under the SARFAESI Act seeking new operation and management contractors for the Facility of Subsidiary Company.

In NCLT, it was held that Corporate Debtor does not have any ownership of the Facility and had merely rights to operate, maintain and use the Facility.

Hon’ble NCLAT held that:
(i) There can be no dispute that Facility has been handed over to the Appellant for operation and maintenance. Further, Subsidiary Company was also obliged to provide access to representative of the Corporate Debtor for operating and maintenance, but the mere fact that the Appellant has been permitted to use the Facility for operation and maintenance, cannot lead to conclusion that the Corporate Debtor is in occupation of the Facility and there is any breach of Section 14(1)(d).
(ii) Section 14(1)(d) of the IBC prohibits recovery of any property by an owner or lessor, where such property is occupied and in possession of the Corporate Debtor.

No breach of Section 14(1)(d) of IBC in case of auction of Subsidiary Company’s assets/facility (under SARFAESI) which was handed over to Corporate Debtor for operation and maintenance – Wind World (India) Ltd. through Mr. Shailen Shah, RP Vs. Indian Renewable Energy Development Agency Ltd. – NCLAT New Delhi Read Post »