# In the matter of Canara Bank vs. Bhagyanagar Hotels Private Limited & Ors.

> NCLAT judgment dated 2024-04-29. Citation: TCN-2024-NCLAT-00477. This case involves a Company Appeal (AT) (CH) (INS) No. 13 of 2024 filed under Section 61 of…

- **Court:** NCLAT
- **Order date:** 29 Apr 2024
- **Citation:** TCN-2024-NCLAT-00477
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/canara-bank-vs-bhagyanagar-hotels-private-limited-ors-190ee930

## Summary

### Background

This case involves a Company Appeal (AT) (CH) (INS) No. 13 of 2024 filed under Section 61 of the Insolvency and Bankruptcy Code, 2016, arising from an order dated 04.12.2023 in IA (IBC) 265/2023 in CP (IB) No. 651/7/HDB/2018 passed by the National Company Law Tribunal (NCLT), Hyderabad Bench - I. The appeal concerns the eviction of Bhagyanagar Hotels Private Limited (Appellant) from a property claimed by Sainath Estates Private Limited (Corporate Debtor), which is undergoing liquidation. Canara Bank, a financial creditor, sought to implead itself in the appeal, claiming an exclusive charge over the superstructures on the land owned by the Corporate Debtor. The Liquidator of Sainath Estates sought the eviction based on the expiry of a lease deed and the unauthorized

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## Facts

1. Canara Bank sanctioned working capital facilities to Bhagyanagar Hotels Private Limited.
2. Bhagyanagar Hotels constructed 'Manasarovar Fern Building' using the credit facilities from Canara Bank.
3. Loan Security Documents, including a Composite Hypothecation Agreement and Guarantee Agreements, were executed in 2011.
4. Sainath Estate Private Limited provided a corporate guarantee for the loan.
5. Bhagyanagar Hotels acknowledged the debt multiple times between 2017 and 2023.
6. Canara Bank filed Form D with the Liquidator of Sainath Estate Private Limited on 06.08.2022, regarding the liquidation of Sainath Estate.
7. Canara Bank filed OA No. 494/2019 before the Debt Recovery Tribunal against Bhagyanagar Hotels and other guarantors, which was allowed on 31.12.2019.
8.

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## Issues and analysis

### Issue 1: Whether the NCLT had the jurisdiction to order the eviction of Bhagyanagar Hotels Private Limited …

**Ratio:** The NCLT, under Section 60(5) of the I&B Code, has jurisdiction to adjudicate

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**Reasoning:** The Tribunal reasoned that the eviction of Bhagyanagar Hotels is directly related to the

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**Interpretation:** The NCLT's jurisdiction extends to matters directly connected with the

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**Application:** The Tribunal applied this principle by holding that the NCLT had the

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## Parties

- **Judges:** M. Venu…; Sharad Kumar…; +1 more
- **Appellants:** M/s. BHAGYANAGAR…
- **Respondents:** Sainath Estates…; Krishnamohan…

## Timeline

- **2011-03-30 — Sanction…**: Working Capital Facilities were sanctioned to the 1st Respondent / Appellant through…
- **2011-03-31 — Composite Hypothecation…**: The 1st Respondent / Appellant entered into a Composite Hypothecation Agreement on…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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