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TMI Blog2024 (4) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Authority was of the view that Company Petition is hit by Section 10A and not maintainable. Despite the above observation, the Adjudicating Authority proceeded to admit Section 9 application by the impugned order. It is further relevant to notice that in paragraph 5 of the order dated 09.02.2024, Adjudicating Authority noted the Operational Creditor s admission, that amount falls within a period stipulated in Section 10A of the Code - Section 10A came to considered by the Hon ble Supreme Court in Ramesh Kymal Vs. Siemens Gamesa Renewable Power (P) Ltd. [ 2021 (2) TMI 394 - SUPREME COURT] , Hon ble Supreme Court after noticing the legislative scheme noticed that Section 10A provides that no application for initiation of CIRP can be initiated for a default occurring on or after 25.03.2020. The Hon ble Supreme Court held that the expression shall never be filed with the clear indicator that the intent of legislature is to bar the institution of any application . When there is a bar of initiation of an application, the mere fact that in the Reply filed of the Corporate Debtor no plea of the Bar was taken is in consequential. Further, Adjudicating Authority itself is aware of plea o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Authority ( National Company Law Tribunal, Mumbai Bench V ) , admitting Section 9 application filed by Operational Creditor. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are: i. The Leave and License Agreement was entered on 27.12.2019 between the Reward Business Solutions Private Ltd and the Sporta Technologies Private Limited for two units situated at 8th Floor of Tower B in Penisula Business Park, Lower Parel Mumbai. ii. Leave and license was for a period from 27.12.2019 to 26.12.2024. iii. There was rent free period for a period of three months from license commencement date. The lease amount was fixed in Leave and License Agreement. iv. The email dated 29.05.2020 was received from Director of the Reward Business Solutions Private Limited to the Corporate Debtor that Operational Creditor has taken loan from Mangalam which was in turn secured by the mortgage of licensed premises and the Mangalam has taken over the licensed premises and draft Tripartite Agreement was shared with the Appellant. v. On 18.06.2020, the Corporate Debtor asked for certain clarifications. Mangalam sent an email dated 19.06.2020 by their Advocate that the amount be deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered 10A bar in the impugned order. Learned counsel for the Respondent submits that after filing of the Application under Section 9, the Respondent has also issued fresh notice under Section 8 on 23.01.2023 and had also filed an application for withdrawal of the Section 9 petition to enable the Respondent to file fresh application, on which application no order could be passed. Submission needs scrutiny. Issue notice. Learned counsel for the Operational Creditor accepts notice. Let notice be issued on Respondent No.1. Learned counsel for the Respondent prays for one week time to file an Additional Affidavit. Learned counsel for the Respondent may file Reply/Additional Affidavit within one week. List this Appeal on 23.02.2024. In the meantime, the order impugned shall remain stayed. No steps, till the next date shall be taken by the IRP in the CIRP. 5. Sh. Arun Kathpalia Learned Counsel for the Appellant submits that Section 9 application filed by the Operational Creditor was barred by Section 10A since the date from which debt fell due was mentioned as March 2020. An amount claimed in Demand Notice of ₹7,61,08,246/- was for the period from March 2020 to April 2021. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings and claim as contained in Section 9 application. Part IV of the application mentioned the details amount of debt as ₹7,61,08,246/- and debt fell due since March 2020. Part IV of the application is as follows: PART-IV PARTICULARS OF OPERATIONAL DEBT 1 TOTAL AMOUNT OF DEBT, DETAILS OF TRANSACTIONS ON ACCOUNT OF WHICH DEBT FELL DUE AND THE DATE FROM WHICH SUCH DEBT FELL DUE. Total Amount of Debt: Rs.7,61,08,246/- [Rupees Seven Crores Sixty-One Lacs Eight Thousand Two Hundred and Forty-Six] Details of Transaction: The transactions in question pertain to a Leave and License Agreement dated 27th December 2019, for Unit Nos. 801 and 802, Tower B, Penisula Business Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013; As per the terms of the Leave and License Agreement, a monthly license fee of Rs. 49,83,636/- for the first three [3] years and Rs. 57,31,181/- for the remaining two [2] years; Corporate Debtor has not paid the monthly license fee date. However, since March 2020 , Corporate Debtor has failed to pay the license fee in spite of repeated reminders. Therefore, till date of filing of this Petition an amount of Rs.7,61,08,246/- is outstanding and payable. Annexed her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prohibited filing an application under Sections 7, 9 10 for any default arising on or after 25.03.2020. The prohibition continues for one year from 25.03.2020 i.e., upto 24.03.2021. When we look into the Part IV of the application as well as the statement showing particulars of claim it is clear that apart from lease rental from April 2021, all claim was within the 10A period. For lease rental of April 2021, no CIRP can be commenced since it did not fulfil the threshold. 12. It is relevant to notice that application for amendment was filed by the Appellant seeking amendment in Company Petition. The Amendment Application came to be heard and rejected by Adjudicating Authority vide its order dated 22.12.2023. Adjudicating Authority by rejecting the application in paragraphs 9 to 13 following was held : 9. It was in response to this reply to the Demand Notice that the present application is filed for seeking an amendment in the Company Petition. The case of the Respondent is that the Applicant being conscious of the fact that the disputes have arisen between the parties, hence a subsequent petition may not be maintainable. Thus the Applicant being conscious of the fact that he cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand Notice sent by the Operational Creditor and up to the time the premises were vacated by it. 14. Section 10A came to considered by the Hon ble Supreme Court in `Ramesh Kymal Vs. `Siemens Gamesa Renewable Power (P) Ltd. , reported in (2021) 3 SCC 224, Hon ble Supreme Court after noticing the legislative scheme noticed that Section 10A provides that no application for initiation of CIRP can be initiated for a default occurring on or after 25.03.2020. The Hon ble Supreme Court held that the expression shall never be filed with the clear indicator that the intent of legislature is to bar the institution of any application . In paragraph 27 of the Judgment following has been held: 27. Adopting the construction which has been suggested by the appellant would defeat the object and intent underlying the insertion of Section 10-A. The onset of the Covid-19 Pandemic is a cataclysmic event which has serious repercussions on the financial health of corporate enterprises. The Ordinance and the Amending Act enacted by Parliament, adopt 25-3-2020 as the cut-off date. The proviso to Section 10-A stipulates that no application shall ever be filed for the initiation of the CIRP for the said defa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process. 18. We need to notice Section 8 also which contemplates that the Operational Creditor may on the occurrence of default deliver a Demand Notice. Section 8 sub-Section (1) thus clearly contemplates default has to be prior to the delivery of the Demand Notice. Section 9 sub-Section (1) which provides that if after expiry of period of 10 days from the date of delivery of Notice or invoice demanding payment, the Operational Creditor does not receive payment from the Corporate Debtor or notice of dispute, Operational Creditor may file the application before the Adjudicating Authority. Section 9 sub-Section (1) does not refer to period of date of default rather it empowers the Operational Creditor to file the application if payment is not received from service of Demand Notice within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed was amendment which was rejected. It is well settled that for any default which is committed by a Corporate Debtor subsequent to 10A period application under Section 9 is fully maintainable. It is thus open for the Operational Creditor to file a fresh application under Section 9 for the default which is committed after the expiry of 10A period. 23. In view of our forgoing discussions and conclusions, we are of the view that the application filed by the Operational Creditor under Section 9 was clearly barred by Section 10A, and the Adjudicating Authority committed an error in admitting Section 9 application by the impugned order dated 09.02.2024. 24. In result, the Appeal is allowed the order dated 09.02.2024 is set aside. The Corporate Debtor is freed from CIRP. The IRP fee and expenses as fixed by the Adjudicating Authority in the impugned order i.e., ₹2,00,000/- shall be paid by Operational Creditor to the IRP if not already paid. As observed above, Operational Creditor is at liberty to file a fresh application for default committed by Corporate Debtor subsequent to 10A period and shall have also liberty to seek appropriate remedy for their dues in accordance with law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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