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

  • Blog|News|Insolvency and Bankruptcy Code|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 4 September, 2023

Recent Posts

Blog, News, Income Tax

No TDS on Payments to Credit Guarantee Fund Trust for MSEs Referred in Section 10(46B) | CBDT

Blog

Assessee to Pursue Pending Proceedings Before Appellate Authority Instead of Filing Writ Petition | HC

Latest from Taxmann

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

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied