M/S Pandit Automotive Pvt Ltd vs M/S Chetan Motors Pvt Ltd & Anr

IN THE MATTER OF: Pandit Automotive Pvt. Ltd. ...Appellant Through Its Liquidator, CS Anagha Anasingaraju

Versus Chetan Motors & Anr. ...Respondents

Present: For Appellant: CA Anubhav Goel, Ms. Preeti Goel, Advocates For Respondent: Mr. Aadiya Pande, Advocate

ORDER

(Virtual Mode)

22.07.2022: The present appeal is directed against the order dated

16.12.2019, passed by the Adjudicating Authority (National Company Law

Tribunal, Mumbai Bench) in MA 673/2019 in CP (IB) 1624(MB)/2017 by

which an application filed by the Liquidator in terms of Section 33(2) of the

Insolvency and Bankruptcy Code, 2016 (in short 'Code') has been dismissed.

In brief, an application under Section 7 of the Code was filed by M/s

Reliance Commercial Finance bearing CP (IB) 1624(MB)/2017 against the

Appellant/Corporate Debtor which was admitted vide order dated

12.03.2018 and Corporate Insolvency Resolution Process (CIRP) proceedings

were initiated. Subsequently, vide order dated 09.08.2018 liquidation

proceedings were initiated against the Appellant and liquidator was

appointed. It is alleged that as soon as the liquidator came to know that the

Appellant had entered into a lease agreement dated 23.08.2017 with the

Respondent by which the Respondent had agreed to pay the monthly license fee of Rs. 1,00,000/- for use and occupation of land bearing GAT No. 133

situated at Village Tung, Taluka Miraj, District Sangli, admeasuring about

01 H 24 Aar and commercial building premises admeasuring about 15,000

sq. ft. (leased premise) for 6 months since 23.08.2017. It is alleged that the

Respondent continued to stay in possession of the leased premises till May,

2019 when possession taken by the Bank. It is further alleged by the

Applicant that the Respondent is in arrears @ Rs. 1,00,000 for a period of

21 months, therefore the present application is filed for the said amount.

In reply dated 26.10.2018, Counsel for the Respondent has alleged

that the aforesaid amount has been adjusted against the debt which it to be

paid by Respondent M/s Pandit Automotive Sangli Pvt. Ltd.

Counsel for the Appellant has submitted that the Adjudicating

Authority has committed a patent error in dismissing the application on the

ground that the directors of both the Company i.e. M/s Pandit Automotive

Pvt. Ltd. and M/s Pandit Automotive Sangli Pvt. Ltd. are the same persons.

It was also observed by the Adjudicating Authority that both the companies

have the same registered office. In this background, the Adjudicating

Authority has observed that the amount which is to be paid by the

Respondent to the Appellant, much less the liquidator, has rightly been

adjusted by it towards the debt due to it on account of M/s Pandit

Automotive Sangli Pvt. Ltd.

Counsel for the Appellant has vehemently argued that there is an

error in the approach of the Adjudicating Authority in passing the impugned

order because both the companies are separate and thus, they are totally

different legal entities. It is also submitted that once both the companies are separate legal entities then the amount to be paid to the Appellant cannot

be adjusted in the debt of other company.

Counsel for the Respondent has tried to argue that the agreement in

question dated 23.08.2017 is not registered and is not signed by the parties.

We have perused the record and found that the agreement is signed by the

parties and since it was agreement for a period of 6 months, therefore, it

does not require registration. In view of the aforesaid discussion, the present

appeal is thus allowed and the impugned order is hereby set aside. It is

needless to mention that the amount of rent from 23.08.2017 to the date

when the possession was delivered i.e. 25.05.2019 is to be paid by the

Respondent to the Corporate Debtor much less the Liquidator.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Kanthi Narahari] Member (Technical)

[Dr. Alok Srivastava] Member (Technical)

Sheetal/RR