Expiry Of Commercial Premises Licence Before CIRP Does Not Permit Recovery During Moratorium: NCLT Ahmedabad

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has held that expiry of a licence to use a commercial premises before commencement of the Corporate Insolvency Resolution Process (CIRP) does not, by itself, allow recovery of the premises during the moratorium.

Judicial Member Shammi Khan and Technical Member Sanjeev Sharma observed, “although the contractual term had expired on 18.12.2025, such expiry by itself does not permit recovery of possession during the subsistence of moratorium.”

The court noted that JCR Fashion Retail Pvt. Ltd. remained in possession when CIRP commenced on March 10, 2026.

The application was filed by Raja Narandas Wadhwani and Kishor Ashiram Sewani against Resolution Professional Rathin Amishbhai Majmudar of JCR Fashion Retail Pvt. Ltd.

The applicants sought possession of the Vadodara premises after JCR Fashion Retail's eight-year registered licence expired on December 18, 2025.

The premises were held under a 90-year lease, with the leasehold rights later assigned to the applicants in April 2023. JCR continued occupying the premises and entered CIRP on March 10, 2026, without any renewed agreement.

The applicants argued that Section 14 could not revive an expired right. The RP relied on Section 14(1)(d), which bars recovery during moratorium. The court agreed the licence expired but held that possession remained protected.

The NCLAT had held that Section 14(1)(d) applies even where termination preceded CIRP, provided the Corporate Debtor remained in possession when CIRP commenced.

On the applicants' claim of ₹41.60 lakh, the court held that the amount required verification and reconciliation. It did not finally adjudicate the claim. Any amount otherwise payable for use of the premises during CIRP would be dealt with under the provisions governing CIRP costs.

The court rejected immediate recovery of possession during the moratorium. It declared that the licence had expired on December 18, 2025, while leaving the applicants free to pursue possession after the moratorium ends, in accordance with law.

For Applicant: Advocate Nilesh Udarnani

For Respondent: Advocate Nipun Singhvi