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TMI Blog2021 (12) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... ssession of the property from the Corporate Debtor. Thus, the right of lessor to recover rent are affected on account of moratorium. Therefore, the lessor is entitled to recover the rent and which shall include in CIRP costs - there are no substance in the argument that the rent cannot be included in the CIRP costs. Whether the Respondents have wilfully disobeyed the order passed by this Appellate Tribunal on 31.01.2019? - HELD THAT:- In the present case, the CIRP commenced on 25.07.2019 when the Application under Section 9 was admitted and moratorium under Section 13(1) has declared. Subsequently, the RP has filed the Application for liquidation. The Ld. Adjudicating Authority vide order dated 14.06.2019 allowed the Application and liquidation of the Corporate Debtor was initiated and the assets of the Corporate Debtor were put for liquidation. Thus, as per the order dated 31.01.2019 the CoC is required to pay rent since 01.12.2018 till 13.06.2019 i.e. just before initiation of liquidation of the Corporate Debtor - It is true that the Adjudicating Authority vide order dated 14.06.2019 allowed the Application of RP and passed an order of liquidation of Corporate Debtor as no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RP the Corporate Debtor under the management of CoC and RP, continued to occupy the lease premises but ceased paying rent thereof. 3. Ld. Adjudicating Authority allowed the Applicant s Application vide order dated 21.12.2018 and directed the CoC to pay the rent w.e.f. 01.12.2018 or making suitable arrangements in the alternative. The said order was impugned in CA (AT) (Ins) No. 104 of 2019 before this Appellate Tribunal by the CoC. This Appellate Tribunal vide order dated 31.01.2019 upheld the order of the Adjudicating Authority directed the CoC to pay the rent w.e.f. 01.12.2018 and onwards i.e. up to the date of moratorium. Also directed that the rent of December, 2018 and January, 2019 be paid by 15.02.2019 and 28.02.2019 respectively. Thereafter, the rent of each month should be paid by 15th of next month. The Appeal is disposed of with the aforesaid modification. 4. The Applicant has filed a Contempt Application No. 133 of 2019 against the Respondents before the Adjudicating Authority. However, on 18.02.2020 the Applicant withdrew the Application on the ground that he is pressing relief prayed for in the present application before NCLAT. Thus, vide order dated 18.02.2020, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Contemnors in terms of order dated 31.01.2019 passed by this Appellate Tribunal was required to pay the entire arrears of rent by 28.02.2019 and thereafter for each subsequent months by 15th of the next month. However, the Contemnors have wilfully and deliberately flouted the aforesaid directions and have failed to comply with the same. With the aforesaid facts, the Applicant prays for the relief to initiate the Contempt proceedings against the members of CoC and RP of the Corporate Debtor for wilful and deliberate disobedience of the order dated 31.01.2019 passed by this Appellate Tribunal. 9. The Respondent No. 2, Liquidator, member of CoC and Respondent No. 12 have filed the reply of the Application. 10. Ld. Counsel for the Applicant submitted that a moratorium exists both at the stage of Insolvency Resolution Process and also upon passing of liquidation order as per Section 33(5) of the Code. Thus, moratorium continuance till date. The argument of the Respondents that they are not liable to pay rent beyond 31.05.2019 as CIRP period automatically ended on 31.05.2019, is untenable. The Respondents having continued to utilise the leased premises till date on the condition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Respondent No. 2 has issued a public announcement on 14.06.2021 and has also sent an email dated 03.07.2021 to the Applicant. Pursuant to which the liquidator has also received the claim from the Applicant. The payment of any outstanding rental dues which occurred during the CIRP period being an Insolvency Resolution Process costs would be payable in accordance with Section 53 of the IBC. It is submitted that the order dated 31.01.2019 has been passed by this Appellate Tribunal and CoC is directed to pay the rent w.e.f 01.12.2018 and onwards i.e. up to date of moratorium. However, no directions were issued against the Respondent No. 2. The Respondent No. 2 performed all its duties which could have facilitated compliance of orders and no reason for non-payment of rent can be attributed to the Respondent No. 2. Thus, it is prayed that the Application be dismissed against the Respondent No. 2. 12. Ld. Counsel representing the lender banks (Respondent No. 4 to 11, 13, 14, 16 and 17) submitted that as per the order dated 31.01.2019 lender banks were directed to pay lease rent w.e.f. 01.12.2018 onwards up to date of moratorium. Ld. Adjudicating Authority vide order dated 14.06.2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards the rent. The CoC members are already struggling to recover the money from the Corporate Debtor. The Applicant should file his claim before the Liquidator. Respondent No. 12 is not liable to pay the rent to the Applicant, as CIRP Regulations 31 to 34 do not provide rent to be included in the Insolvency Resolution Process costs. It is submitted that the Respondent No. 12 has no intention to show any disrespect or dishonour to this Appellate Tribunal. It is further submitted that the Respondent No. 12 is willing to withdraw its claim before the RP as the Respondent No. 12 is not able to bear any CIRP costs/rent costs. The Respondent No. 12 has not disobeyed the order and has not committed any Contempt. Hence, the Contempt proceedings is liable to be dismissed. 14. After hearing Ld. Counsels for the parties, we have gone through the record. 15. The Respondent No. 2 Liquidator (erstwhile RP) raised a preliminary objection that the Applicant has wrongly filed the Application under Rule 11 of NCLAT Rules, 2016. Such Application should have been filed under Section 425 of the Companies Act, 2013 as held by this Appellate Tribunal in the case of Gireesh Kr. Sanghi Vs. Mr. Ravi S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofessional fixed under Regulation 34; and (e) other costs directly relating to the corporate insolvency resolution process and approved by the committee. 20 As per Regulation 31 Insolvency Resolution Process costs under Section 5(13) (e) mean defined in clause (a) to (e). for the present case, Regulation 31 (b) is relevant which provides that amounts due to a person whose rightsare prejudicially affected on account of the moratorium imposed under Section 14(1) (d). Due to moratorium period the lessor could not recover the possession of the property from the Corporate Debtor. Thus, the right of lessor to recover rent are affected on account of moratorium. Therefore, the lessor is entitled to recover the rent and which shall include in CIRP costs. 21. Thus, we find no substance in the argument that the rent cannot be included in the CIRP costs. 22. Now, the issue for consideration before us is whether the Respondents have wilfully disobeyed the order passed by this Appellate Tribunal on 31.01.2019? 23. The Adjudicating Authority vide order dated 21.12.2018 directed the CoC to pay the rent w.e.f. 01.12.2018 to the Applicant against that order CoC has filed CA (AT) (I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the moratorium period; (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. (2A) Where the interim resolution professional or resolution professional, as the case may be, considers the supply of goods or services critical to protect and preserve the value of the corporate debtor and manage the operations of such corporate debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or other legal proceedings shall be instituted by or against the Corporate Debtor, provided that suit or other legal proceedings may be instituted by the Liquidator on behalf of the Corporate Debtor with the prior approval of the Adjudicating Authority. It means after initiation of liquidation order no suit or other legal proceedings shall be instituted by or against the Corporate Debtor. However, during the liquidation period the lessor can file its claim before the Liquidator. The Applicant has already filed his claim before the Liquidator. Therefore, we find no substance in the argument of Ld. Counsel for the Applicant. 30. In the present case, the CIRP commenced on 25.07.2019 when the Application under Section 9 was admitted and moratorium under Section 13(1) has declared. Subsequently, the RP has filed the Application for liquidation. The Ld. Adjudicating Authority vide order dated 14.06.2019 allowed the Application and liquidation of the Corporate Debtor was initiated and the assets of the Corporate Debtor were put for liquidation. Thus, as per the order dated 31.01.2019 the CoC is required to pay rent since 01.12.2018 till 13.06.2019 i.e. just before initiation of liqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of this Appellate Tribunal. 36. It is not out of context to refer that during the course of argument. It is informed that the suspended board of directors of the Corporate Debtor have assailed the order dated 11.06.2021 passed by the Adjudicating Authority in CA (AT) (Ins) No. 438 of 2021 before this Appellate Tribunal and in this Appeal the Judgment is reserved. In the present matter, we have reserved the Judgment on 25.11.2021. Subsequently, the Coordinate Bench of this Appellate Tribunal has pronounced the Judgment in CA (AT) (Ins) No. 438 of 2021 on 29.11.2021. The operative portion of the Judgment i.e. Para Nos. 42 to 45 are as under:- 42. In fact, on 19.05.2021, IA No.2034/2021 was heard by the Adjudicating Authority and that the orders were reserved. The Respondent in May, 2021 filed IA No.2946/2021 praying inter alia to review the orders dated 14.06.2019 and 04.07.2019 passed by the Adjudicating Authority and on 09.06.2021 the Respondent had prayed for the withdrawal of IA No.2946/2021, since the Adjudicating Authority had observed that it has no power to review its own order. 43 In the instant case, on going through the impugned order dated 11.06.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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