TMI Blog2022 (6) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... d License Agreement and hence the Operational Creditor cannot raise invoice against the Corporate Debtor for the use of additional space without the consent of the Corporate Debtor. Further, it was observed by this Bench that the L.D. Suit is pending before the Small Cause Court with respect to the same claim. The Corporate Debtor has filed Suit for Permanent Injunction and raised issues with respect to claim prior to issue of Demand Notice by the Operational Creditor. The Corporate Debtor has replied to the said Demand Notice denying and disputing the claims of the Operational Creditor. Hence, this Bench is of the view that the claim of the Operational Creditor cannot be admitted being there is pre-existing dispute between the Corporate Debtor and the Operational Creditor. Petition dismissed. - CP (IB) No.174/NCLT/MB-IV/2021 - - - Dated:- 16-6-2022 - Mr. Rajesh Sharma Hon ble Member (Technical) And Mr. Kishore Vemulapalli Hon ble Member (Judicial) For the Petitioner : Mr. Nishit Gandhi, Advocate For the Respondent : Mr. Kishore Salunkhe, Advocate ORDER Per : Kishore Vemulapalli, Member (Judicial) 1. This is a Company Petition filed under section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.01.2019. This invoice was raised for the use of additional car parking space even after the termination of the Leave and License Agreement and also payable by the Corporate Debtor. The Corporate Debtor has not replied to the said invoice. d) It was an agreed position between the parties that for any use of the premises after the termination of the Leave and License Agreement, the Licensee shall be liable to pay the rent at two times of the original rent as per the Agreement. Since the agreement was subsisting only up to 31.01.2019, the licensee was liable to pay the rent for the use of the same premises at double the rates as per clause 5 (p) of the said Agreement post 31.01.2019 i.e. from February, 2019 onwards. e) However, in response to the termination notice dated 19.09.2018, the Corporate Debtor refused to vacate the premises and continued to enjoy and use it. The Corporate Debtor even filed a suit in the Small Causes Court seeking Injunction of the Operational Creditor from obstructing ingress and egress of the employees and other persons working for Corporate Debtor. Further, an ad-interim injunction was sought claiming that the License period as per the aforem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the L.D. Suit No. 177 of 2018 and the same is pending for trial and leading the evidence. b) Hon ble Small Cause Court vide its order dated 18.06.2019 in LD Suit No. 177 of 2018, had directed to the Corporate Debtor to handover peaceful possession of the Premises to the Operational Creditor on or before 30.06.2019 and at the same time, Operational Creditor was directed to refund the security deposit of Rs.60,00,000/- after adjusting the arrear rent amount to the Corporate Debtor. Accordingly, the Corporate Debtor complied the order but the Operational Creditor failed to return the balance amount of Rs.60,00,000/-and adjusted the same against illegal charges. c) The Operational Creditor had filed an application in the Hon ble Small Cause Court in Exhibit No.27 of L.D. Suit No.177 of 2018 wherein he had prayed for directions to the Corporate Debtor to make payment the total outstanding amounts, which is illegal and extortion. However, the Hon ble Small Cause Court was pleased to reject the said application as prima facie the Operational Creditor was unable to prove the liability of the Corporate Debtor to the amount of Rs.2.50 crore. d) The Operational Creditor ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Corporate Debtor. The Corporate Debtor has also not disputed that the Agreement terminated on 19.09.2018. The liability of the Corporate Debtor to pay twice the amount of rent has actually arisen after the termination of the said Agreement. e) The amount due and payable to the Operational Creditor falls within the ambit of Section 3 (11) r/w Section 5 (21) of the Code. This view is also affirmed by the Hon ble NCLAT in the case of Anup Sushil Dubey v/s National Agriculture Co-operative Marketing Federation, Company Appeal (AT) (Insolvency) 229 of 2020. f) It is not disputed that the Corporate Debtor entered into a registered Leave and License Agreement with the Operational Creditor for occupation of his premises at a monthly rent and bind itself the terms of the said Agreement. The Corporate Debtor admittedly, agreed to, acknowledged and also accepted the terms of the Agreement between the Operational Creditor and the Corporate Debtor. The Corporate Debtor occupied the terrace and Car parking spaces in excess of the area specifically demarcated for the Corporate Debtor as per the Leave and License Agreement. 7. The Operational Creditor has filed its Written Subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured 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 judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured; Section 3(11): debt means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt; Section 3(12): default means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not 1[paid] by the debtor or the corporate debtor, as the case may be; Section 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; Section 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 1[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; 13. Learned Counsel for the Appellant relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Supreme Court in Mobilox Innovations Private Limited V/s. Kirusa Software Private Limited (2018) 1 SCC 353 in Para 5.2.1 observed as hereunder; 5.2.1 Who can trigger IRP? Here, the code differentiates between financial creditors and operational creditors. Financial creditors are those whose relationship with the entity is a pure financial contract, such as a loan or a debt security. Operational creditors are those whose liability from the entity comes from a transaction on operations. Thus, the wholesale vendor of spare parts whose spark plugs are kept in inventory by the car mechanic and who gets paid only after the spark plugs are sold is an operational creditor. Similarly, the lessor that the entity rents out space from is an operational creditor to whom the entity owes monthly rent on a three-year lease. The Code also provides for cases where a creditor has both a solely financial transaction as well as an operational transaction with the entity. In such a case, the creditor can be considered a financial creditor to the extent of the financial debt and an operational creditor to the extent of the operational debt (Emphasis Supplied) 18. The Lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but does not include the rendering of any service free of charge or under a contract of personal service; 21. The provisions of the Central Goods and Services Tax Act 2017. Schedule II of the Act lists down the activities that are to be treated as supply of goods or services, and paragraph 2 of the Schedule stipulates as follows; (a) any lease, tenancy, easement, licence to occupy land is a supply of services; (b) any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services. As the premises in the case on hand is leased out for Commercial Purpose , the cold storage owner/NAFED on collection is required to pay service tax which is reflected in the tax invoices and Ledger Accounts which is part of the record filed. 22. Therefore, keeping in view, the observations made by the Hon ble Supreme Court in Para 5.2.1 of Mobilox (Supra), and having regard to the facts of the instant case this Tribunal is of the earnest opinion that the subject lease rentals arising out of use and occupation of a cold storage unit which is for Commercial Purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises came to be vacated by the Corporate Debtor and requested to the Operational Creditor to take peaceful possession and various representatives made personal visits to the house of Mr. Bharat Doshi but he never acknowledged and accepted the possession. Since no other options were left, Corporate Debtor Company s Director sent a registered post letter dated 29.06.2019 saying that kindly take a peaceful and vacant possession. b) The Operational Creditor issued notice dated 09.10.2019 in the format of section 3 4 of the Code to which the Corporate Debtor categorically denied and disputed vide its reply dated 16.10.2019. c) The L.D. Suit is pending before the Small Cause Court and amendment in plea has been filed by the Corporate Debtor before the same court under Order 6 Rule 17 of Civil Procedure Code. The said application is still pending and it is yet to be argued. d) The Corporate Debtor submits that relying upon the provisions of the Code by a specific order has been passed by Hon ble NCLT, Guwahati Bench, Guwahati, in the matter of CP(IB) No.15(GB) (2019), M/s. Aurora Accessories Pvt. Ltd. Vs. M/s. Ace Acoustics Audio Video Solutions Pvt. Ltd., stati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing under any law for the time being in force and payable to the Central Government, any State Government or any local authority 13. In M. Ravindranath Reddy V. G. Kishan, 2020 SCC OnLine NCLAT 84, the Hon ble NCLAT, the issue was whether a landlord by providing lease could be treated as Operational Creditor. It was held by full Bench that it does not fall within the ambit of the definition of Operational Debt . This Judgment has been followed subsequently in Aurora Accessories (P) Ltd. V. Ace Acoustics Audio Video Solutions (P) Ltd., 2020 SCC OnLine NCLAT 527 and in Promilla Taneja V. Surendri Design (P) Ltd., 2020 SCC OnLine NCLAT 1105. 14. The case of Promilla Taneja is pending in the Hon ble Supreme Court for deciding the same issue. In view of the above, this Bench is of considered view that the debt arising out of Rent Lease cannot be considered as Operational Debt under the Code. 15. The Operational Creditor stated that the Operational Creditor raised invoice for the use of additional car parking space even after the termination of the Leave and License Agreement. This Bench is of view that the provision for use of additional space by the Corporate Debtor wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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