9911796707
TMI Blog2017 (11) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... g the Applicants as 'Lessors' with the `Corporate Debtor' being the 'Lessee' on 16.8.2014. However, lease was made effective retrospectively on and from 10.1.2012 correlating with certain agreement having nomenclature of Hotelier -Buyer agreement. The duration of the lease it is claimed is for a period of 15 years effective from 10.1.2012 and the monthly rental payable being Rs. 1,37,250/- plus service tax, if any, applicable. The lock-in period in relation to both the parties of the property described as above, it is claimed is for a period of 15 years. While so, it is claimed by the Applicants/ landlords that the Lessee namely the 'Corporate Debtor' had chosen to issue the termination notice dated 4.4.2016 terminating the agreement entered into between the parties before the expiry of lease time period of 15 years, in other words within the lock-in period specified In the agreement. It is also stated that at the time of terminating the same, Rs. 12,62,700/- was due by way of rentals and Interest was also due for the defaulted amount @12% per annum which comes to around Rs. 1,95,718.03. In addition to the non-payment of rentals for the period in which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. d) Since the definition of `Operational Debt' is not satisfied) the Applicant cannot be categorized as an 'Operational Creditor' under Section 5 (20) of IBC, 2016. e) It is also contended that the Application is nothing but counter blast to the claim of the Respondent Company incurred by it on behalf of the Applicants towards maintaining the premises in a sum of Rs. 3, 60,841 /- required to be paid for the period between April, 2016 to June, 2017 and the same remains unpaid. f) It is also contended that the Respondent Company In view of the arbitration clause contained In the Hotelier -Buyer Agreement followed up by the lease agreement has invoked the said clause and to this effect notice under Section 21 of the Arbitration Conciliation Act, 1996 issued by the Corporate Debtor dated 17.1.2017 mandated the naming of Sole Arbitrator for resolution of all disputes arising out of the agreement entered into between the parties including the sale deed and hence under Section 21 of the Arbitration and Conciliation Act, 1996 it is deemed that the commencement of proceedings of arbitration has taken place from the said date being 17.1.2017 and hence in view of the exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed Arbitrators has been mentioned in the notice, the sole Arbitrator who is required to be appointed for adjudicating the dispute as claimed to be existing between the parties has not been done. Further no such dispute has been defined and mentioned and in the circumstances, the notice dated 17.1.2017 should not be taken into consideration by this Tribunal as the commencement of arbitration proceedings. Ld. Counsel for Petitioner also in this connection pointed out to the preamble of the Arbitration and Conciliation Act, 1996 and represents that since the United Nations Commission on International Trade Law (UNCITRAL) has been adopted as the model law and in view of UNCITRAL Arbitration Rules providing for the matter which are required to be treated as a notice of arbitration for initiating recourse to arbitration by the claimant wherein it has been provided that brief description of the claim and an indication of the amount involved are required to be stated and that a dispute to be referred to arbitration along with relief or remedy is required to be also clearly specified and since notice dated 17.1.2017 contains none of the above particulars and not being in compliance wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(6) "claim" means - (a) A right to payment, whether or not such right is reduced to judgement, fixed, disputed, undisputed, legal, equitable, secured or unsecured; (b) Right to remedy for breach of contract under any law for the time being In force, If such breach gives rise to a right to payment, whether or not such right is reduced to judgement, fixed, matured, unmatured, disputed, undisputed, secured or unsecured. While considering the definitions under Section 3 of Part I of IBC, 2016 it will be of significance to also consider the definition of "transaction" as defined under Section 3 (33) which Is to the following effect, namely: 3(33) "transaction" includes an agreement or arrangement in writing for the transfer of assets, or funds, goods or services, from or to the corporate debtor 7. While the definitions as given in Part I of IBC,2016 is applicable to the Code as such, turning to the definitions as contained under Section 5 Part II of IBC, 2016 as made specifically applicable to Insolvency Resolution and Liquidation for Corporate Persons we find the definitions of `financial debt' and 'operational debt' and what constitutes the same. Since in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess as contemplated under IBC, 2016, the classification of Operational Creditor completely loses its significance as in the waterfall process, no distinction is sought to be drawn under Section 53 of IBC, 2016 wherein Distribution of Assets following order of priority is detailed. Even though the financial debts owed to unsecured creditors seems to get a priority as it is as such categorized under Section 53 (1) (d), the term operational debt does not find even a mention and at best can be classified under Section 53 (1) (j) of IBC, 2016 under the head "any remaining debts and dues" and hence the above classification of Operational Creditor at the stage of Insolvency Resolution Process gets totally obfuscated at the stage of liquidation process and does not get any priority as compared to say a financial debt. 10. Rather than looking at the provisions of the Code, two of the rules framed there under throws some light in relation to this important aspect giving a pointer that there can be other types of debt apart from financial and operational debt in relation to a corporate debtor and these Rules also throws some light relating to the usage of the term 'goods or services' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim should arise in respect of (i) provision of goods or services including employment or (ii) A debt in respect of the repayment of dues arising under any law for the time being in force and payable either to the Central Government, any State Government or any local authority. While in relation to Government or local authority and the dues owed to it has been given a wide platform, it is a moot point whether persons other than Government or Local Authority can claim benefit that any debt owed should be construed as an 'operational debt' other than those classified as 'financial debt'. We are afraid such a wide interpretation cannot be given particularly in view of the Code and regulations framed there under also envisaging other type of debts in relation to a corporate person. Reference may be had in this connection to the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (for brevity Liquidation Regulations ) wherein under Regulation 20 claims by other stake holders has been given thereby envisaging other claims as well of the corporate person. 11. To sum up thus only if the claim by way of debt falls within one of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relating to immovable property cannot be held as an "Operational debt" and the said decision has an effect of binding precedent on this Tribunal. Even otherwise it is seen that predominantly out of total amount claimed in a sum of Rs. 2,74,63,957.77, a sum of Rs. 2,60,05,539.74 is claimed in relation to the termination of the lease agreement dated 16.8.2014 entered into between the parties which provided for the duration of lease as 15 years commencing from 10.1.2012 and ending on 9.1.2027. In other words, the above amount is claimed more by way of damages for wrongful termination of the lease agreement, rather than the amount has become due and payable. The question here is whether the provisions of IBC,2016 can be invoked to lay such a claim on the part of the petitioner and that the non-payment of such a claim resulting virtually as a claim for damages of future rents has not been paid and hence the CIRP should be invoked. We are afraid we cannot subscribe to such a claim as sought to be projected by the Ld. Counsel for the Petitioner. In this we seek aid from the decisions rendered by the Courts in India while interpreting the provisions of Companies Act, 1956 relating to wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assesses the quantum of loss and awards damages. Damages are payable on account of a fiat of the Court and not on account of quantifications by the person alleging breach. (iii) When the contract does not stipulate the quantum of damages, the Court will assess and award compensation in accordance with the principles laid down in Section 73. Where the contract stipulates the quantum of damages or amounts to be recovered as damages, then the party complaining of breach can recover reasonable compensation, the stipulated amount being merely the outside limit. (iv) When a contract provides that on default by a buyer to pay for and take delivery of goods, the seller is entitled to recover the loss incurred on resale, interest on delayed recovery of the price, godown charges, insurance charges and other expenses incurred by the seller till resale, it cannot be said the buyer incurs the liability to pay those amounts automatically, when he fails to take delivery. Failure to take delivery may be due to several valid or lawful reasons which may show that the failure to take delivery is not a 'default' or 'breach' in which event, no pecuniary liability may fasten on him. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as even a debt leave alone 'Operational Debt' in view of the above enunciated position of law. Looking from another angle also, it is evident that Corporate Debtor has sought to invoke the Arbitration clause vide letter dated 17.01.2017 much prior to the notice of default sent by the Petitioner to the Corporate Debtor on 22.04.2017. It is seen that while the Petitioner lay their claim based on the lease agreement dated 16.08.2014 for renting out the service apartment (between the parties) duly registered, the Corporate Debtor is invoking the Arbitration Clause as provided in Hotlier-Buyer Agreement dated 10.01.2012 for referring the disputes, and this Tribunal in the exercise of limited jurisdiction as well as limited time frame available cannot afford to indulge itself in an exercise to ascertain as to under which of the several agreements entered into between the parties the claim arises of the Petitioner and its non-payment for default invoking the insolvency process against the Corporate Debtor. From facts it is also evident that a counter claim has also been raised by the Corporate Debtor as against the Petitioner which definitely connotes that the dispute betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
