2020 (11) TMI 1022 - Tri - Insolvency and Bankruptcy

Seeking order directing the resolution professional to arrange to hand over vacant possession of the leased out premises to the applicant - direction for payment of the lease rental payment from the month of August, 2019 till the period when the properties under lease to the corporate debtor are handed over to the applicant - HELD THAT - The respondent/IRP in the present case, has admitted the claim of the applicant towards the rental arrears for the period from April 1, 2014 till August 1, 2019 to the tune of ₹ 66,79,260. The applicant in the present application is seeking a direction from this Tribunal to direct the respondent to pay the rent for the CIRP period, during which the respondent is in possession of the premises. Learned counsel for the respondent tried to put forth an argument that the lease deed was not renewed and as such they are not liable to pay any rent to the applicant. The said argument of learned counsel for the respondent is not sustainable in view of the fact that the respondent herself has admitted the claim of the applicant to the tune of ₹ 66,79,260 for the period from April 1, 2014 till August 1, 2019 by relying on the same lease agreement entered into between the parties and as such for the purpose of defeating the claim of the applicant, the respondent cannot take a different stand. Thus the respondent cannot approbate and reprobate at the same time in relation to the said issue. The corporate debtor itself has not paid the rental dues to the applicant since the month of June 2014. Even though the corporate debtor has not paid the rent from the month of June 2014, the respondent herself, as already stated, has admitted the rental arrears to the tune of ₹ 66,79,260 for the period from April 1, 2014 till August 1, 2019 and hence non-payment of the rent by the corporate debtor for the period from June 2014 would not absolve the respondent/RP to pay the rent for the CIRP period - this Tribunal is unable to comprehend as to how the respondent/RP who is in possession of the premises is not willing to pay the rent during the CIRP period. The respondent/RP shall vacate and hand over the vacant possession of the land and building at Chennivakkam Village, Ponneri Taluk, Tiruvallur District, to the applicant within 30 days starting from November 5, 2020 - Application disposed off.

Summary

Issues:
1. Relief sought by the applicant under section 60(5) of the Insolvency and Bankruptcy Code, 2016 for vacant possession and rental payments.
2. Claim of rental arrears by the applicant against the corporate debtor.
3. Dispute over the renewal of the lease deed and liability to pay rent.
4. Possession of premises by the respondent during the Corporate Insolvency Resolution Process (CIRP).
5. Admittance of claim by the respondent but refusal to pay rent for the CIRP period.
6. Security measures and costs borne during the CIRP period.

Analysis:
1. The applicant filed an application seeking relief under section 60(5) of the Insolvency and Bankruptcy Code, 2016, requesting immediate possession of leased premises and rental payments. The respondent, an insolvency resolution professional (IRP), admitted the applicant's claim for rental arrears but contested paying rent for the CIRP period, citing non-renewal of the lease deed.

2. The applicant, an agriculturist and owner of the leased premises, faced financial losses due to the Covid-19 pandemic and lockdown. The respondent, as the IRP, was in possession of the premises since the CIRP commencement. The applicant sought direction for the respondent to pay rent for the CIRP period, which the respondent refused based on lease deed non-renewal.

3. The respondent argued that the lease deed was not renewed after an initial period, thus absolving them from paying rent. However, the respondent's admission of the claim contradicted this argument. The Tribunal held that the respondent cannot deny rent payment based on non-renewal after admitting the claim, preventing inconsistent stances.

4. Despite the corporate debtor's non-payment of rent since 2014, the respondent admitted and communicated the rental arrears to the applicant. The Tribunal found the respondent's security measures and costs during the CIRP period contradictory to their refusal to pay rent, emphasizing the obligation to pay rent during possession.

5. Considering the circumstances, the Tribunal directed the respondent to vacate and hand over the premises to the applicant within 30 days. The applicant was given the option to file a claim for any outstanding rental dues within the same period. The application was disposed of with these directions, ensuring relief for the applicant and addressing the dispute over rental payments during the CIRP period.