# In the matter of GIT Textiles Manufacturing Limited

> NCLT judgment dated 2024-08-02. Citation: TCN-2024-NCLT-00894. 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-00894
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/git-textiles-manufacturing-limited-ebe89601

## 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 (the 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 or termination of the 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 their arguments. The Resolution Professional (RP) contends that the issues raised by the applicant are barred by the principle of 'Issue Estoppel' as they were previously dismissed by the Adjudicating Authority. The RP also

…

## Facts

H.S. Mercantile is a lessee of a property in Ahmedabad, Gujarat, owned by GIT Textiles Manufacturing Limited, the corporate debtor. A Memorandum of Understanding (MoU) was entered into regarding the property. A Tenancy Agreement was entered into on 2007-08-02 and 2007-10-01. A Deed of Lease was registered on 2012-09-26 for 99 years, with H.S. Mercantile claiming to have paid Rs. One Crore as consideration. The lease is recorded in the Records of Revenue. H.S. Mercantile filed I.A. (IB) No. 849/KB/2023, seeking directions to exclude the leasehold right from the Information Memorandum (IM) and the Resolution Plan, which was dismissed on 2024-04-23. H.S. Mercantile appealed the order, but the appeal was withdrawn. The Resolution Plan, approved by the CoC, contains clause

…

## Issues and analysis

### Issue 1: Whether the NCLT has the jurisdiction to approve a resolution plan that effectively cancels a …

**Ratio:** The NCLT is not a civil court and cannot resolve civil disputes or extinguish leasehold

…

**Reasoning:** The court relies on precedents like Embassy Property Developments Pvt. Ltd. vs. State of

…

**Interpretation:** The NCLT's power under the IBC is primarily focused on resolving insolvency and

…

**Application:** In this case, the NCLT cannot approve a resolution plan that includes a clause

…

## Parties

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

## Timeline

- **2007-08-02 — Tenancy Agr…**: Tenancy Agreement entered into between…
- **2007-10-01 — Tenancy Agr…**: Tenancy Agreement entered into between…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/git-textiles-manufacturing-limited-ebe89601