Non-Payment Of Outstanding Lease Rent Amounts To Operational Debt: Nclt Delhi

The National Company Law Tribunal (NCLT), New Delhi bench of Shri Mahendra Khandelwal (Judicial Member) and Shri Atul Chaturvedi (Technical Member) held that when the lease amount is unpaid by the Corporate Debtor it amounts to Operational Debt under the Insolvency & Bankruptcy Code, 2016 (“the Code”). Background Facts: M/s Unified Credit Solutions Private Limited (Operational Creditor) had it's office at 7th Floor, 715, DLF Star Tower, Sector- 30, NH-8, Gurugram, Haryana 122001. In the year 2020, M/s DS Home Construction Pvt. LTD. (Corporate Debtor) approached Operational Creditor for lease of the said Premises for its office use. Thereafter, a Registered Lease Agreement dated 01.10.2020 was executed between the parties for a period of 5 years, detailing rent terms, with exclusive liability on the Corporate Debtor to pay applicable taxes, maintenance charges, and electricity in addition to monthly lease rent. Subsequently, the Corporate Debtor took possession of the premises and deposited the agreed security amount as per the lease deed. However, later he began delaying lease rent payments from January to June 2022, and has been in continuous default since July 2022. In order to evade the payment of monthly lease rent, the Corporate Debtor purportedly concocted a false story of attachment of its bank accounts by Real Estate Regulatory Authority and sought time to clear the admitted/acknowledge monthly lease rental due, outstanding and payable by Corporate Debtor to Operational Creditor by January 2023. Later, it falsely alleged disconnection of electricity by the maintenance agency due to fire, while in reality, the electricity was disconnected for non-payment of maintenance charges. But, the Corporate Debtor cleared the maintenance dues by December 2022, and electricity was restored. Thereafter, the Operational Creditor 02nd February 2023 called upon the Corporate Debtor to clear the outstanding debt with interest by 9th February 2023. Despite receipt of the termination notice the Corporate Debtor neither replied to the notice nor released any payment for outstanding lease rent. Despite receipt of the termination notice, the Corporate Debtor failed to vacate the said premises and thus the Operational Creditor was constrained to take legal recourse by filing eviction petition Rent Controller, District Court, Gurugram which is still pending for decision. A part payment of ₹12,96,000 was made in April–May 2023, but substantial dues remained unpaid. The Corporate Debtor also failed to deposit TDS of ₹1,80,000 deducted on lease rent from April to June 2022. As of 07.11.2023, the outstanding operational debt amounted to ₹1,84,47,567, and the Operational Creditor issued a demand notice under Section 8 of the IBC on 30.11.2023 seeking payment with 10% p.a. interest. However, the Corporate Debtor did not give a reply to the Demand Notice within 10 days and the Operational Creditor filed application for initiation of Insolvency Proceedings against the Corporate Debtor. Findings: The Tribunal observed that the Corporate Debtor was duly served by the Operational Creditor however no reply was received and the Corporate Debtor were set ex parte. In this case, the Operational Creditor has claimed an amount of ₹1,84,47,567.00, representing unpaid lease rent since July 2022. Despite admitting and acknowledging its liability, the Corporate Debtor has wilfully defaulted in making the payments. The Tribunal remarked that to determine that whether the said amount claimed by the Operational Creditor would fall under the ambit of 'Operational 'Debt', it is pertinent to analyze the definition of 'Operational Debt' as mentioned under Section 5(21) of The Insolvency and Bankruptcy Code, 2016. Under said section, 'Operational Debt' is defined as: “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 Tribunal noted that the Operational Creditor has annexed true copies of the invoices to the petition, clearly evidencing that a commercial transaction took place between the parties. These documents substantiate the existence of a legally enforceable debt arising from the use and occupation of the leased premises. Thus, the Tribunal established that it is evident that a debt is due and payable, and there has been a clear default on the part of the Corporate Debtor. Case Title: M/s Unified Credit Solutions Pvt. Ltd. v/s M/s DS Home Construction Pvt. Ltd. Case Number: Company Petition IB/70/ND/2024 Judgment Date: 09/05/2025 Click Here To Read/Download The Order

Non-Payment Of Outstanding Lease Rent Amounts To Operational Debt: Nclt Delhi

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