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2022 (11) TMI 104 - Tri - Insolvency and BankruptcyMaintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Lease rentals - Operational Debt or not - pre-existing dispute or not - HELD THAT - The issue regarding lease rentals is similar to the issues raised before the five member bench of Hon ble NCLAT in JAIPUR TRADE EXPOCENTRE PRIVATE LIMITED VERSUS M/S METRO JET AIRWAYS TRAINING PRIVATE LIMITED 2022 (7) TMI 241 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ; the issue was whether the licensee fee, which is claimed to be due from the Corporate Debtor, is an Operational Debt within the meaning of section 5(21) of the Code.?'. Wherein, the Hon ble NCLAT has held that the claim of Licensor for payment of license fee for use of Demised Premises for business purposes is an Operational Debt within the meaning of Section 5(21) of the Code. Pre-existing dispute - HELD THAT - It is pertinent to mention that as per the records at page 196 of the Petition, the demand notice under section 8 of the Code was delivered to the Corporate Debtor on 29 April, 2019. Whereas, the Corporate Debtor invoke the Arbitration Clause vide letter dated 11 July, 2019, which is way after than the demand notice under section 8 of the Code was delivered to them - The Hon ble Supreme Court in catena of Judgments has opined that in an Application under Section 9, the Corporate Debtor can point out any Pre- Existing Dispute raised prior to the issuance of Demand Notice under Section 8, IBC, 2016. The present petition made by the Operational Creditor is complete in all respects as required by law. The Petition establishes that the Corporate Debtor is in default of a debt due and payable and that the default is more than the minimum amount stipulated under section 4 (1) of the Code, stipulated at the relevant point of time. Further, no disputes were ever raised by the Corporate Debtor. Petition admitted - moratorium declared.
Issues Involved:
1. Whether the unpaid lease rentals fall within the purview of the term "Operational Debt." 2. Is there any Pre-existing dispute? Issue-wise Detailed Analysis: 1. Whether the unpaid lease rentals fall within the purview of the term "Operational Debt": The Tribunal examined the definition of "Operational Debt" under Section 5(21) of the Insolvency and Bankruptcy Code, 2016, which includes claims in respect of the provision of goods or services, including employment or a debt in respect of the repayment of dues arising under any law. The Tribunal referenced the judgment in Jaipur Trade Expocentre Private Limited v. Metro Jet Airways Training Private Limited, where it was held that the claim of a licensor for payment of license fee for the use of demised premises for business purposes is an "Operational Debt" within the meaning of Section 5(21) of the Code. Additionally, the Tribunal cited the Bankruptcy Law Reforms Committee report, which differentiates between financial creditors and operational creditors, noting that lessors who rent out space are considered operational creditors. 2. Is there any Pre-existing dispute: The Tribunal noted that the demand notice under Section 8 of the Code was delivered to the Corporate Debtor on 29 April 2019, while the Corporate Debtor invoked the arbitration clause on 11 July 2019, which was after the demand notice was issued. The Tribunal referenced the Supreme Court's judgment in Mobilox Innovations Private Limited v. Kirusa Software Private Limited, which states that a dispute must exist before the receipt of the demand notice. The Tribunal found that the Corporate Debtor did not raise any dispute before the demand notice under Section 8 of the Code. Furthermore, the Tribunal observed that the debt fell due on 31 March 2019, but the Operational Creditor claimed the default date as 23 September 2018. Conclusion: The Tribunal concluded that the present petition by the Operational Creditor was complete in all respects as required by law. The Corporate Debtor was found to be in default of a debt due and payable, and the default amount exceeded the minimum stipulated under Section 4(1) of the Code. No disputes were raised by the Corporate Debtor prior to the demand notice. Therefore, the Tribunal admitted the application for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. Order: a) The application filed by the Operational Creditor under Section 9 of the Code for initiating CIRP against the Corporate Debtor is admitted. b) A moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, is declared, prohibiting the institution or continuation of suits, transferring or disposing of assets, and recovery of property by an owner or lessor. c) The moratorium shall be effective from the date of the order until the completion of the CIRP or approval of the resolution plan or liquidation of the Corporate Debtor. d) Public announcement of the CIRP shall be made immediately. e) Mr. Yogesh Gupta is appointed as the Interim Resolution Professional (IRP) of the Corporate Debtor. f) The management of the Corporate Debtor shall vest in the IRP during the CIRP period. g) The IRP/RP shall submit periodical reports on the progress of the CIRP. h) The Operational Creditor shall deposit Rs. 4,00,000/- with the IRP for expenses arising out of issuing public notice and inviting claims. i) The Court Officer is directed to communicate the order to the Operational Creditor, Corporate Debtor, and IRP by Speed Post and email. j) The Operational Creditor shall serve a copy of the order on the IRP and the Registrar of Companies, West Bengal, Kolkata. The order was pronounced on 28th October 2022, and the case was scheduled to come up on 30 November 2022 for filing the periodical report.
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