NCLT Erred in Admitting CIRP Application Where There Was Already a Pre-existing Rent Dispute Over Commercial Sanction | NCLAT

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  • Last Updated on 4 September, 2023

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Dispute Over Commercial Sanction

Case Details: Yash Nachrani v. Pardesi Construction (P.) Ltd. - [2023] 153 taxmann.com 313 (NCLAT-New Delhi)

Judiciary and Counsel Details

    • Justice Ashok Bhushan, Chairperson & Barun Mitra, Technical Member
    • Krishnendu Datta, Sr. Adv., Karun Mehta, Ms Pratiksha Mishra & Ms Varsha, Advs. for the Appellant.
    • Sandeep Bajaj, Vipul Jai, Mayank Biyani & Debopriya Moulik, Advs. for the Respondent.

Facts of the Case

In the instant case, the Respondent (i.e. operational creditor) gave its premises to the corporate debtor to run a restaurant and both entered into a leave and license agreement. Since the corporate debtor had defaulted in making payment of dues, the respondent issued a notice to the corporate debtor to vacate the said premises followed by a notice invoking arbitration.

The corporate debtor rejecting the invocation of arbitration replied that a criminal application was filed against the respondent for fraud and misrepresenting the fact that requisite sanctions were in place for running a commercial business from the subject premises.

The Respondent sent a demand notice under section 8 of IBC to the corporate debtor who again replied to the same, denying its liability to pay any amount. The Respondent filed a section 9 petition against the corporate debtor before the NCLT and the same was admitted vide the impugned order.

The said order was challenged by the appellant/suspended director of the corporate debtor vide the instant appeal.

NCLT Held

It was noted that the said reply to notices clearly amounted to a notice of dispute and further, the NCLT turned a blind eye to the voluminous exchange of correspondence between the corporate debtor and respondent on the availability of compliances from competent authorities, which established a pre-existing dispute.

Therefore, the NCLT erred in admitting the section 9 petition and the impugned order was to be set aside.

List of Cases Reviewed

List of Cases Referred to

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