TMI Blog2020 (3) TMI 1287X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted by the operational Creditor that before the issuance of the demand notice, the corporate debtor has communicated that a notice was issued by the MCD regarding the commercial use of the building and it has also been decided by the MCD, therefore, in our considered view, the dispute has been raised by the corporate debtor prior to the receiving of the demand notice, therefore, in view of Section 9(5)(2) of the Code, if the notice of dispute is raised regarding existence of dispute within 10 days of the receipt of the demand notice and the record shows that there is a existence of dispute in that case the application is not maintainable. Since the lease rent does not come under the definition of the operational debt and there is pre-existence of dispute, therefore, the present application is not maintainable and same is liable to be dismissed. Application dismissed. - (IB)-1754(ND)2019 - - - Dated:- 18-3-2020 - Abni Ranjan Kumar Sinha, Member (J) And Kapal Kumar Vohra, Member (T) For the Appellant : Ravi Gupta, Sachin Jain, Ankit Jain, Abhay Pratap Singh, Ritesh Aggarwal For the Respondent : Teeja Bhatia and Aishwarya Adlakha ORDER Abni Ranjan K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 8 of the Code, demanding a total sum of ₹ 1,13,57,341/- due to be paid to the Operational Creditor by the Corporate Debtor towards lease and rental outstanding for the building/premises taken by them for commercial purposes. 5. In view of the Corporate Debtor's failure to reduce or liquidate its liability, the present petition has been filed in the required format praying for initiation of the Corporate Insolvency Resolution Process of the Corporate Debtor. Affidavit in compliance under Section 9(3)(b) and 9(3)(c) of Code are on record to corroborate his case. 6. Pursuant to the Court notice issued to the Corporate Debtor, reply was filed and it was submitted by Corporate Debtor that: a. It is submitted that the present application filed by the Operational Creditor is not maintainable as there is no claim of any operational debt from the side of the Operational Creditor as per the provisions of the Code. Further, the application is not maintainable on the ground that admittedly and undisputedly there is a pre-existing dispute between the parties. b. In the present case, forming the subject matter of the application, the purported debt has neithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Operational Creditor as well as the Corporate Debtor and perused the averments made in the application, reply and the documents enclosed with the applications and the reply. 8. Ld. Counsel appearing for the Operational Creditor in course of arguments submitted that the present amount is claimed by him on the basis of a lease deed executed on 04.01.2016, which is for a period of 9 years with effect from 01.03.2016. He further submitted that as per the lease agreement, the Corporate Debtor had to pay the rent of ₹ 18,36,000 per month for the period till 28.02.2019 and at the rate of ₹ 21,11,400 with effect from 01.03.2019 but when the said amount was not paid, then the Operational Creditor had sent a demand notice dated 18.03.2019 and in response to that the Corporate Debtor has sent a reply dated 04.04.2019. He further submitted that the Corporate Debtor by filing a reply claimed that the amount sought has neither arisen out of goods and services nor the lease rent can be considered as a supply of goods or rendering of any service and so it does not come under the definition of operational debt. He further submitted that the Corporate Debtor also raised that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er submitted against that order the Operational Creditor preferred an appeal before the MCD and the MCD vide its order dated 24.12.2018 dismissed the appeal by holding that the Operational Creditor is not allottee to the commercial use of subject property, especially for using the residential property into commercial for running a gym and other activities as mentioned in the lease deed. He further submitted that after the sealing of the aforesaid property, the sale of the business of the Corporate Debtor has reduced and resulted loss. He further submitted that although the Operational Creditor was fully aware with the facts that the said premises is already declared as none commercial even he the sent demand notice under Section 8 of the IBC and the respondent submitted the reply and claim that the lease rent is not Operational debt and also raised the pre-existence disputes with respect to the nature of the said premises. He further submitted that in a series of decisions it was held that the lease rent is not a operational debt and therefore, no claim with respect to the same could be made under the IBC and in this regard he place reliance upon the decision of Hon'ble Nationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot come under the definition of operational debt and there is a pre-existence disputes. 13. In the light of submissions, we have gone through the application filed on behalf of the applicant and we find the Operational Creditor in his application clearly mentioned this fact that as per the lease deed dated 04.01.2016, the agreed monthly rent was ₹ 18,36,000 after deducting TDS and adding GST with effect from the 01.03.2016 to 28.02.2019 and from 01.03.2019 onwards the agreed rate was ₹ 19,55,000 (per month), (₹ 21,11,400), after deducting TDS and adding GST. We further notice the Operational Creditor at page 21 para A mentioned this fact that on 29.10.2018, he received a communications from the Corporate Debtor that although the Operational Creditor had represented to the Corporate Debtor that the premises is fit for being used for gym business but on account of the notice received from the South Delhi Municipal Corporation, it was not used for the commercial purpose and similar question was raised by the Corporate Debtor after receiving the demand notice and in its reply the Corporate Debtor clearly mentioned that in view of the order passed by the MCD the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebt when whole or any part or instalment of the amount of debt has become due and payable and is not [paid] by the debtor or the corporate debtor, as the case may be; 11 5(20) operational creditor means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred; 5(21) operational debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the [payment] of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority; The Legislature did not include here the reference to rent dues of property. Thus, it is clear that a claim in respect of the provision of goods or services is covered under the operational debt. This petition has been filed for recovery of enhanced rent as per lease agreement; this is not about the goods or services or in respect to goods or services. This Appellate Tribunal has also held on 28-11-2017 in Company Appeal (AT) (Insolvency) No. 288 of 2017 is given below: - Admittedly, the Appellant is a tenant of Respondent- Corporate Debtor . Ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder any of the categories mentioned as above, the claim cannot be categorised as an operational debt, and even though there might be a liability or obligation due from one person, namely Corporate Debtor to another, namely Creditor other than the Government or local authority, such a creditor cannot categorise itself as an Operational Creditor as defined under Section 5(21) of the I B Code, 2016. Therefore, we are of the considered opinion that lease of immovable property cannot be considered as a supply of goods or rendering of any services and thus, cannot fall within the definition or 'Operational Debt. In case of lease of immovable property, Default can be determined, on the basis of evidence. While exercising summary jurisdiction, the Adjudicating Authority exercising its power under Insolvency and Bankruptcy Code 2016, cannot give finding regarding default in payment of lease rent, because it requires further investigation. 16. On the basis of the aforesaid finding, when we shall consider the case in hand then we find that here also the Operational Creditor claimed the lease rent as an operational debt, which in view of the aforesaid decision, in our consider ..... X X X X Extracts X X X X X X X X Extracts X X X X
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