IBC Overrides Occupancy Claims

The National Company Law Appellate Tribunal (NCLAT) upheld the eviction of former promoters and their family members from a hotel owned by a corporate debtor undergoing Corporate Insolvency Resolution Process (CIRP). 

Rejecting reliance on an unregistered Memorandum of Understanding (MoU) and an arbitral award allegedly conferring occupancy rights, the Tribunal held that assets of the corporate debtor must be brought under the control of the Resolution Professional for effective insolvency resolution.

Any claim arising from alleged compensation arrangements could only be pursued through the CIRP process and could not justify continued occupation of corporate assets.