Bharat Doshi vs Autobahn Automative Private Limited

Bharat Doshi ...Appellant

Versus

Autobahn Automotive Pvt. Ltd. ...Respondent

Present: For Appellant: Present but appearance not marked. For Respondent: Mr. Diwakar Singh, Advocate.

ORDER

20.01.2023: Heard learned counsel for the Appellant. This Appeal has

been filed against order dated 16.06.2022 passed by the Adjudicating

Authority (National Company Law Tribunal), Mumbai Bench-IV by which

application filed under Section 9 by the Appellant claiming his amount

towards his leave and licence fee has been dismissed. The Adjudicating

Authority in para 16 of the judgment has made following observation:

"16. 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 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 2

Operational Creditor cannot be admitted being there is pre-existing dispute between the Corporate Debtor and the Operational Creditor."

2. Challenging the order passed by the Adjudicating Authority, learned

counsel for the Appellant contends that under the lease and licence

agreement, the Appellant can terminate the agreement. It is submitted that

the Appellant has terminated lease and licence agreement, hence, the

Corporate Debtor was liable to pay rent and amount which was claimed was

validly due on the Corporate Debtor. The Adjudicating Authority committed

error in dismissing the application under Section 9 filed by the Appellant. The

suit which has been relied by the Adjudicating Authority was suit for

injunction filed by the Corporate Debtor, which has no relevance with regard

to issues raised in the application. He has further referred to an order passed

by the Court of Small Causes dated 20.08.2019, which has been brought on

the record at page 100 of the paper book.

3. We have considered the submissions of learned counsel for the

Appellant and perused the record.

4. In the present case, after demand notice under Section 8 was issued by

the Operational Creditor on 09.10.2019, the demand notice was immediately

replied by the Corporate Debtor on 18.10.2019 and in the reply to demand

notice dispute was raised by the Corporate Debtor regarding liability to pay

the amount as claimed. In para 3, 4, 5 and 6 of the reply notice following has

been stated:

Company Appeal (AT) (Insolvency) No. 1233 of 2022 3

"3. My clients further states that your claim that possession is not given to you is absolutely false & baseless as 'my clients have submitted the letter of handing over the peaceful to you in the respective Court to the Honourable a Small Causes Judge, Court Room No.20 and intimated the same to you.

4. My clients state that on the contrary you had sent this notice to my client with ulterior motive and malafide intention in terms of to misguide and mislead to the Hon'ble adjudicating authority of NCLT.

It is a matter of record that Hon'ble a Small Causes Court, Court Room No.20 have passed specific instructions and direction to my client who is the plaintiff over there to handover the possession of the said premises on or before 30th June, 2019. Also it was directed that you responded are at liberty to adjust arrear rent from security deposit of my client which was Rs.60 Lakhs and balance you were supposed to refund to my client well on time.

5. My clients state that following the said order by my client possession was handed over to you on 30th June 2019 and this fact was brought in your notice on the same day since you are residing in the same complex adjacent to the suit premises.

6. My clients state that on the contrary you are liable to pay to my client balance amount form the security deposit of Rs.60 Lakhs after adjustment of if any previous rents are not paid before June 2019."

Company Appeal (AT) (Insolvency) No. 1233 of 2022 4

5. The suit before the Court of Small Causes was filed by the Corporate

Debtor prior to the demand notice. The mere fact that the suit was for

injunction does not indicate that there was no dispute between the parties.

Suit was filed prior to the demand notice and the demand notice was also

replied by the Corporate Debtor giving notice of dispute which clearly mentions

that a dispute is there. The Adjudicating Authority did not commit any error

in holding that there was a pre-existing dispute.

6. In so far as judgment dated 20.08.2019 which is referred by learned

counsel for the Appellant is concerned, the court has set aside the order of

injunction. For setting aside of order of injunction, Court has given reasons

in Para 11 and 12 of the judgment. The fact the injunction was set aside does

not have any bearing on the pre-existing dispute between the parties.

7. We, thus, are of the view that the Adjudicating Authority did not commit

any error in rejecting the Section 9 application filed by the Appellant. Appeal

is dismissed. However, it is open for the Appellant to take such remedy as

available in law with regard to his leave and licence fee.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) Archana/nn

Company Appeal (AT) (Insolvency) No. 1233 of 2022