TMI Blog2019 (10) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... . Petition dismissed. - C.P. (IB) No. 134/BB/2019 - - - Dated:- 14-6-2019 - SHRI RAJESWARA RAO VITTANALA, MEMBER (JUDICIAL) AND DR. ASHOK KUMAR MISHRA, MEMBER (TECHNICAL) For The Petitioner : Shri S. Guru Prasanna For The Respondent : None ORDER Per : Rajeswara Rao Vittanala, Member. (J) 1. C.P. (IB) No.l34/BB/2019 is filed by M/s. Pleasant Valley Development Private Limited ( Petitioner/Operational Creditor ) U/s 9 of the IBC, 2016 R/w Rule 6 of the I B (AAA) Rules, 2016, by inter alia seeking to initiate Corporate Insolvency Resolution Process (CIRP) in respect of M/s. Spaine Hospitality Private Limited ( Respondent/Corporate Debtor ) on the ground that it has committed a default of ₹ 1,60,67,240/- (Rupees One Crore Sixty Lakhs Sixty Seven Thousand Two Hundred and Forty only) including interest at 24% per annum (as of 31st December 2018) towards arrears of rent. 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows: (1) M/s. Pleasant Valley Development Private Limited ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is situated has been construed as per the Commercial Approved Plan and is permitted by the competent authority to be fit for use and occupation and is reserved/approved for commercial retail use . Further, Clause 5 Petitioner herein has represented to M/s. New Deccan International that Petitioner has obtained all the required statutory and other permissions, licenses, certificates, approval for the commercial use and occupancy of the leased premises so that M/s. New Deccan International can enjoy peaceful possession of the leased premises without any hindrance from any authority or any other government or statutory bodies. ii. M/s. New Deccan International has instructed that based upon the aforesaid assurance that the Petitioner has construed the leased premises after obtaining the necessary sanction/permission from the statutory authorities for commercial use, agreed to occupy the premises. Thereafter, M/s. New Deccan International has paid a sum of ₹ 26,00,000/- towards Interest Freed Security Deposit to the Petitioner herein. iii. M/s. New Deccan International has also instructed that pursuant to the Lease Deed, M/s. New Deccan Internationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Leased Premised (defined below) to run such a business as the Leased Premised is located in the central business district of Bangalore. The Operational Creditor represented that the building and the Leased Premises is compliant with all applicable laws necessary for running a commercial establishment, including service of alcoholic beverages. ii. Based on the acquaintance of Mr. H. P. Ravindra, Proprietor of New Deccan International and Mr. Rahul Thadani, Director of M/s. Pleasant Valley, Petitioner s representatives approached M/s. New Deccan International in 2015 and offered to lease the entire building bearing No. 30 (Old No. 1), Church Street, Bangalore ( the Building ). Subsequently, based on the representations and warranties of Mr. Rahul Thadani and other representatives of Petitioner, New Deccan International agreed to take on lease, the ground floor of the Building, and accordingly, both the Petitioner and New Deccan International entered into a Lease Deed dated 10.12.2015 (Lease Deed ), registered as Document No.4269/2015-16 in the offices of the Sub-Registrar, Shivajinagar ( the Leased Premises ) for running a restaurant by New Deccan International. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc.) which are necessary for to get its applications processed by the concerned authorities and without which they cannot commence operations out of the Leased Premises. The Corporate Debtor has been constrained to try and run its spa business without implementing the novelty and uniqueness of its initial business idea, which the Petitioner was very well aware of. The Corporate Debtor thus continues to suffer losses on account of the Petitioner s actions and conduct. vi. Subsequently, despite having made no such demand earlier, Petitioner has got issued the instant notice under reply by concealing all the material information, including the dispute between Petitioner and Respondent in connection with the Leased Premises. For reasons not far to seek, Petitioner has failed to mention its own lapses and failures and the Corporate Debtor s repeated attempts to rectify the situation through dialogue and discussions. vii. It is also stated that the Corporate Debtor has already suffered substantial losses on account of the misrepresentations made by the Petitioner and they reserves liberty to initiate appropriate proceedings for damages and breach of contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urged the Tribunal to admit the case by initiating CIRP as prayed for. 5. Cause of action arise on the basis of lease deed dated 10.12.2015 executed between M/s. Pleasant Valley Development Private Limited and M/s. New Deccan International in respect of schedule property situated at No.30, (Old No. 1) consisting of Ground Floors, Church Street, Civil Station, Bangalore. It contains several terms and conditions on the part of both the parties. Some of terms and conditions relevant to the instant issue are discussed below. 6. The lease deed is for a period of (9) nine years or (108 months) commencing from the date of commencement of rent. The lessee shall be locked in for a period of 36 months from the lease commencement date and Lessor shall be locked in for the entire term of nine years or 108 months. The Lessee cannot terminated the lease during the subsistence of the lock in period. The Lessee can be terminated by the Lessee by giving the Lessor, three months notice period for termination of the Lease or paying two month s rent in lieu thereof. The lessee shall be entitled to 30 (Thirty days) rent free occupation of the premises in order to enable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate this Deed with immediate effect, without any costs or liability on account thereof. (5) The Lease Deed shall stand automatically cancelled/terminated in its entirety and will not be in force or effect in the event the Trade License is not granted to the Lessee by the Authorities within sixty days from the execution of this Lease deed. The property/premises as it becomes unfit for the purpose for which the Lessee leased. (6) The Lessee shall be entitled to terminate the lease during the Term of Lease and renewals if any, without any payment, forthwith upon the happening of the following: a. Peaceful possession and enjoyment of the Premises is disturbed, interrupted or hampered in any manner whatsoever due to any non-compliance with local land laws or other statutory requirements/ compliances or otherwise relating to the schedule premises not having been maintained during the term of the lease by the Lessor; or b. There is a defect in the Lessor s title to the Premises. c. Any or all representation of the Lessor is found to be untrue/ incorrect. (7) The Lessor shall be entitled t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear wise escalation Amount of Rent per month No. of months for which rent pending Total amount Rent for year II 3,10,500 May 2017 to December 2017 (8 months) 3,10,500x8 =24,84,000 Rent for year III 3,26,025 January 2018 to December 2018 (12 months) 3,26,025 x 12 = 39,12,300 Total 63,96,300 11. The main lease dated 10.12.2015 contained several terms and conditions as briefly stated supra. In the first instant instance, in order to claim any rights under any agreement/contract, the concerned party should fulfil the obligations under those covenants. It is not known as to why the Petitioner has not terminated the Lease when the Respondent failed to pay rent for so many months as claimed. And there is no answer from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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