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2019 (9) TMI 1471 - Tri - IBCMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - operational creditor or not - lease - main contention of the Learned Counsel for Operational Creditor that the suit filed is for bare injunction and it is not for recovery of arrears of rent - pre-existing dispute or not - HELD THAT - The Corporate Debtor approached the Civil Court and issue of arrears of rent was also looked into by the Civil Court. So the rent is an issue for consideration before the Civil Court. Secondly, the Civil Suit is pending by the date the Demand Notice was issued as well when the petition was filed. Dispute includes existence of Civil Suit or Arbitration proceedings as per definition contained in Section 5 (12) of Insolvency Bankruptcy Code. The Corporate Debtor has contended that as Petitioner does not fall within the definition of operational creditor and the arrears of rent cannot be treated as Operational Debt. Therefore, Petitioner cannot initiate proceedings under Section 9 of IBC. Whether dispute relating to immovable property falls within the definition of operational debt the definition of operational debt? - HELD THAT - The Principal Bench, NCLT in Mrs. Parmod Yadav Anr vs. Divine Infracon Private Limited. 2017 (11) TMI 194 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI has held that in relation to transaction of immovable property the same cannot be considered as a transaction falling under the term 'operation' and 'operational debt' unless such a transaction having a correlation of direct input to the output produced or supplied by the Corporate Debtor and hence we do not have any hesitation looking at any way in holding that the petitioner will not fall under the definition of Operational Creditor and the claim which is sought to be made cannot be considered as an operational debt. . Thus it can be concluded that the Petitioner will not fall under the definition of Operational Creditor and the claim made cannot be considered as an operational debt - petition dismissed.
Issues Involved:
1. Whether the petitioner qualifies as an Operational Creditor under the Insolvency and Bankruptcy Code (IBC), 2016. 2. Whether the arrears of rent constitute an Operational Debt under the IBC, 2016. 3. Whether there is a pre-existing dispute that affects the maintainability of the petition under Section 9 of the IBC, 2016. Issue-wise Detailed Analysis: 1. Whether the petitioner qualifies as an Operational Creditor under the Insolvency and Bankruptcy Code (IBC), 2016: The petitioner, M/s. Manjeera Retail Holding Private Limited, argued that it qualifies as an Operational Creditor under Section 5(20) of the IBC, 2016, by providing services in the form of leased commercial space and amenities to the respondent, M/s. Blue Tree Hospitality Private Limited. The petitioner contended that leasing commercial space is a service as defined under Section 2(102) of the Central Goods and Services Act, 2017, and thus, the unpaid rent qualifies as an operational debt. However, the tribunal referred to the Principal Bench NCLT's decisions in the cases of Mrs. Parmod Yadav & Anr vs. Divine Infracon Pvt Ltd and Jindal Steel & Power Limited vs. DCM International Limited, which held that transactions related to immovable property do not constitute operational debt. The tribunal concluded that the petitioner does not fall under the definition of an Operational Creditor, and the claim for rent arrears cannot be considered as operational debt. 2. Whether the arrears of rent constitute an Operational Debt under the IBC, 2016: The petitioner claimed that the arrears of rent, amounting to ?1,97,22,053/- along with interest of ?64,68,754/-, constitute an operational debt. The tribunal examined the definition of operational debt under Section 5(21) of the IBC, 2016, which includes claims in respect of the provision of goods or services. The tribunal referred to previous rulings, including the Principal Bench NCLT's decision in Mrs. Parmod Yadav & Anr vs. Divine Infracon Pvt Ltd, which clarified that rent arrears related to immovable property do not constitute operational debt. The tribunal agreed with this interpretation, stating that the transactions related to the lease of immovable property do not qualify as operational debt under the IBC, 2016. 3. Whether there is a pre-existing dispute that affects the maintainability of the petition under Section 9 of the IBC, 2016: The respondent argued that there was a pre-existing dispute, as evidenced by a civil suit (OS No. 1114/2017) filed by the respondent against the petitioner, seeking an injunction and addressing the issue of rent arrears. The tribunal noted that the civil suit was filed prior to the issuance of the demand notice under the IBC, 2016, and the suit was still pending. The tribunal referred to the definition of "dispute" under Section 5(12) of the IBC, 2016, which includes the existence of a civil suit or arbitration proceedings. The tribunal concluded that the pre-existing dispute regarding the rent arrears, as evidenced by the ongoing civil suit, affects the maintainability of the petition under Section 9 of the IBC, 2016. Conclusion: Based on the above analysis, the tribunal concluded that: 1. The petitioner does not qualify as an Operational Creditor under the IBC, 2016. 2. The arrears of rent do not constitute an operational debt under the IBC, 2016. 3. There is a pre-existing dispute that affects the maintainability of the petition under Section 9 of the IBC, 2016. Judgment: The petition filed by M/s. Manjeera Retail Holding Private Limited is rejected.
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