TMI Blog2019 (9) TMI 1471X X X X Extracts X X X X X X X X Extracts X X X X ..... f IBC. Whether dispute relating to immovable property falls within the definition of operational debt the definition of operational debt? - HELD THAT:- The Principal Bench, NCLT in Mrs. Parmod Yadav Anr vs. Divine Infracon Private Limited. [ 2017 (11) TMI 194 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI ] has held that in relation to transaction of immovable property the same cannot be considered as a transaction falling under the term 'operation' and 'operational debt' unless such a transaction having a correlation of direct input to the output produced or supplied by the Corporate Debtor and hence we do not have any hesitation looking at any way in holding that the petitioner will not fall under the definition of Operational Creditor and the claim which is sought to be made cannot be considered as an operational debt. . Thus it can be concluded that the Petitioner will not fall under the definition of Operational Creditor and the claim made cannot be considered as an operational debt - petition dismissed. - CP (IB) No. 61/9/HDB/2019 - - - Dated:- 16-9-2019 - Ratakonda Murali, Member (J) and Narender Kumar Bhola, Member (T) For the Appellant : Pras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Lease Deed. d. It is stated that the Corporate Debtor has failed to clear the outstanding lease charges as per the requests raised by Petitioner from time to time and an amount of ₹ 1,97,22,053/- (Rupees One Crore Ninety-Seven Lakhs Twenty-Two Thousand and Fifty-Three Only) along with interest amount of ₹ 64,68,754/- (Rupees Sixty-Four Lakhs Sixty-Seven Thousand Seven Hundred and Fifty-Four Only). Thus, the Operational Creditor with respect to the operational debt, filed the present application and thus prayed the Tribunal that the Corporate Debtor is liable to be declared insolvent and CIRP to be initiated against the Corporate Debtor. 3. Reply/counter filed by the Corporate debtor: a. Corporate Debtor denied the allegations made by the operational creditor. b. Corporate Debtor denied the allegation made by operational creditor regarding the amount of ₹ 1,97,22,053/- which is payable towards rent. Corporate debtor avers that it has been regularly paying the rent for the leased property without any default. The allegation that the corporate debtor is due and liable to pay is false. It is stated that the lease deed was entered into for a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 1,97,22,053/- claimed as due is supported by invoices and attached as Annexure 4 to the application. The invoice is an adequate documentary evidence and there is absolutely no necessity to issue a proper receipt to prove the alleged payment of rent. If corporate debtor had paid the amount and it was not accounted, he ought to have brought to the notice of the operational creditor and corporate debtor has never asked for receipt of payments. b. He denied the allegation made by corporate debtor that M/s. Pioneer Property Zone Ltd caused inconvenience to customers and employees with an intention to evict the corporate debtor and the business of corporate debtor was stopped due to the stoppage of electricity and water supply in an arbitrary manner. c. It is stated that even the Hon'ble Principal Senior Civil Judge, R.R. District directed the corporate debtor to pay an amount of ₹ 38,82,481/- in two instalments. The amounts as directed through the order were paid by the corporate debtor. It is stated that the suit O.S. No.1114/2017 is filed by the corporate debtor with false allegations and is only about relief for injunction which therefore cannot af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended that the Scheduled Premises was leased out to the Corporate Debtor for running Restaurant and Bar and a Lease Agreement was executed on 06.08.2014 (referred to as Lease Deed). The period of lease is from 02.08.2014 to 01.08.2023. The Learned Counsel contended that as per the terms of Lease Deed, the Corporate Debtor has to pay monthly rent (comprising of lease and amenity charges) as revenue share at 13.5% of business turn over with minimum guaranteed monthly lease charges initially at ₹ 7,21,279/- which is payable along with the service tax and GST. The Learned Counsel contended that right from the beginning, the Corporate Debtor was most irregular in paying monthly rent and other charges as per the lease deed resulting in accumulating arrears which is payable with interest. The outstanding lease arrears comes to ₹ 1,97,22,053 and interest thereon is ₹ 64,68,754/-. This amount has been committed default. 8. The contention of the Learned Counsel is that, lease is a service within the meaning of Section 2(102) of Central Goods and Services Act, 2017. So, the invoices raised by the Operational Creditor comes within the meaning of services provided by the Op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Principal Senior Civil Judge, the Corporate Debtor also paid an amount of ₹ 38,82,481/-. Thus the matter is seized by Civil Court with regard to the rent payable. Therefore, there is a pre-existing dispute and the question of arrears of rent is also being challenged before the Civil Court and the suit is still pending. Counsel further contended that arrears of rent does not fall within the meaning of operational debt and therefore the Petitioner is not an Operational Creditor. The dispute relates to immovable property and the transactions of lease cannot be equated to an operation so as to constitute as an operational debt. The amount alleged to be in arrears is in relation to the rent and therefore does not fall within the meaning of operational debt. Therefore, Petition is liable to be dismissed. 11. The admitted fact by both sides is that the premises was leased out to the Corporate Debtor. It is running a Restaurant and bar. Prior to filing of petition under Section 9 of IBC, a civil suit was filed by the Corporate Debtor against Operational Creditor seeking relief among others, injunction to restrain the Operational Creditor from interfering in its enjoyment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Insolvency Bankruptcy Code. The Corporate Debtor has contended that as Petitioner does not fall within the definition of operational creditor and the arrears of rent cannot be treated as Operational Debt. Therefore, Petitioner cannot initiate proceedings under Section 9 of IBC. 13. On the other hand, it is the contention of the Learned Counsel for Operational Creditor that, letting out premises on lease is nothing but a service and as such Petitioner is an Operational Creditor and arrears of rent is an operational debt which is in default. The question is whether dispute relating to immovable property falls within the definition of operational debt the definition of operational debt. The transactions relating to immovable property cannot be held as an Operational debt. The Learned Counsel for Corporate Debtor has relied on the decision of Principal Bench NCLT reported in 2017 SCC online 11263 reported in 2017 in the matter of Mrs. Parmod Yadav Anr vs. Divine Infracon Private Limited. The Learned Counsel for Corporate Debtor further contended that the alleged default of rent for the premises does not fall within the meaning of goods or services and as such the Operational ..... 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