# In the matter of GIT Textiles Manufacturing Limited

> NCLT judgment dated 2024-08-02. Citation: TCN-2024-NCLT-00888. The case involves an application (I.A. (IB) No. 1350/KB/2024) filed by H.S. Mercantile, a…

- **Court:** NCLT
- **Order date:** 2 Aug 2024
- **Citation:** TCN-2024-NCLT-00888
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/git-textiles-manufacturing-limited-c42ded9b

## Summary

### Background

The case involves an application (I.A. (IB) No. 1350/KB/2024) filed by H.S. Mercantile, a lessee of GIT Textiles Manufacturing Limited (Corporate Debtor), seeking reliefs related to the resolution plan approved by the Committee of Creditors (CoC). H.S. Mercantile opposes the inclusion of clause 4.9.3 in the resolution plan, which contemplates the cancellation and/or termination of a registered lease granted to them. The applicant argues that the NCLT lacks jurisdiction to cancel a registered lease deed and relies on several precedents to support this claim. The Resolution Professional (RP) argues that the issues raised by the applicant have already been decided in a previous application (I.A. (IB) No. 849/KB/2023) and that the principle of 'Issue Estoppel' applies. The

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## Facts

H.S. Mercantile is a lessee of a property in Ahmedabad, Gujarat, owned by GIT Textiles Manufacturing Limited (Corporate Debtor). A Tenancy Agreement was entered on 2007-08-02 and 2007-10-01. A Deed of Lease was registered on 2012-09-26 for 99 years. H.S. Mercantile claims to have paid Rs. One Crore to the Corporate Debtor for the lease. H.S. Mercantile filed I.A. (IB) No. 849/KB/2023, seeking directions to exclude the leasehold right from the Information Memorandum (IM) and Resolution Plan, which was dismissed on 2024-04-23. H.S. Mercantile's appeal against this order was withdrawn. The Resolution Plan, approved by the CoC, includes clause 4.9.3, which states that all litigation regarding the title of the land shall be extinguished upon approval of the resolution plan,

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## Issues and analysis

### Issue 1: Whether the NCLT has the jurisdiction to cancel or terminate a registered lease deed through a …

**Ratio:** The Adjudicating Authority is not a civil court and cannot resolve a civil dispute, thus,

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**Reasoning:** The NCLT relies on the principle that it is not a civil court and cannot adjudicate on

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**Interpretation:** The NCLT interprets the IBC as not granting it the power to resolve disputes

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**Application:** The NCLT applies this principle to the specific facts of the case, concluding

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## Parties

- **Judges:** BIDISHA BA…; SHRI. D.…; +1 more
- **Appellants:** H. R. Brothers…
- **Respondents:** GIT Textiles…; Ramachandra…

## Timeline

- **2007-08-02 — Tenancy Agr…**: Applicant and Corporate Debtor…
- **2007-10-01 — Tenancy Agr…**: Applicant and Corporate Debtor…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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