Bombay High Court Orders Police To Ensure Hotel Horizon Property Handover, Flags Directors' Obstruction

The Bombay High Court recently (May 6) directed police to use reasonable force, if necessary, to ensure complete handover of Hotel Horizon Pvt Ltd's Juhu property to the successful resolution applicant.

The court said the suspended directors were continuing to obstruct compliance with orders passed by the National Company Law Tribunal and the High Court.

A Bench of Justices Manish Pitale and Shreeram V. Shirsat was hearing a plea by former resolution professional and interim manager Pravin R Navandar seeking enforcement of earlier directions for handing over possession of the corporate debtor's property to the successful resolution applicant.

“We find substance in the contention raised on behalf of the petitioner and respondent No.6 – SRA that the applicant, who is one of the suspended directors of the corporate debtor along with other such suspended directors, are continuing with their obstructionist activities, thereby seeking to frustrate the orders passed by the NCLT and this Court. We find that the aforesaid attitude also frustrates the very object of the IBC and therefore, appropriate directions deserve to be issued, so that the orders passed by the NCLT and this Court, are complied with in letter and spirit”, the court noted.

The court noted that despite its April 28 directions and an earlier National Company Law Tribunal order for police assistance in taking possession, the suspended directors continued to obstruct physical handover of the property.

The Court rejected the suspended directors' claim that only some parts of the Juhu property belonged to Hotel Horizon. It noted that the same directors had earlier told the NCLAT and the Supreme Court that the disputed portion was also part of the company's assets.

It further observed that the suspended directors had refused to cooperate throughout the corporate insolvency resolution process and were now attempting to dispute the description of the corporate debtor's property despite records continuing to show the company's address as 37, Juhu, Mumbai.

Holding that this was a deliberate attempt to frustrate compliance with lawful orders and derail the insolvency process, the Court directed Navandar and the successful resolution applicant to take possession of the entire property at 37, Juhu Beach, Mumbai, on May 7.

The Court ordered the Juhu Police Station to provide adequate police assistance, including lady constables, to facilitate the handover of the property.

It clarified that any obstruction by the suspended directors or persons claiming to be their security personnel would be dealt with appropriately.

For Petitioner: Senior Advocate Janak Dwarkadas, with Rishabh Jaisani, Kriti Kalyani and Ansh Kumar, instructed by Shardul Amarchand Mangaldas & Co.

For Respondents: AGP Prashant Kamble for State authorities (Respondent Nos. 1 to 5)

For Successful Resolution Applicant: Senior Advocate Venkatesh Dhond, with Vishnu Shriram, Srishti Kapoor and Karishma Rao

For Suspended Directors / Applicant in Interim Application: Amit Patil, with Aaditya Nikam, instructed by APLC