M/S. Sunil Packaging Pvt. Ltd vs Dishnet Wireless Limited

M/s. Sunil Packaging Pvt. Ltd. ... Appellant

Versus

Dishnet Wireless Limited ... Respondent

Present: For Appellant: Ms. Varsha Bánerjee, Shri Milan Singh Negi and Shri Kunal Godhwani, Advocates.

ORDER

2 1.08.2017 This appeal has been preferred by the appellant-'Operational

Creditor' against order dated 14th June, 2017 passed by the learned

Adjudicating Authority (National Company. Law Tribunal), Mumbai Bench,

Mumbai (hereinafter referred to as 'Adjudicating Authority') in C.P. No.

508/I&BP/NCLT/MAH/2017, whereby and whereunder the application

preferred by the appellant under Section 9 of the Insolvency and

Bankruptcy Code, 2016 (hereinafter referred to as 'I&B Code') has been

dismissed.

2. From paragraph 7 of the impugned order, we find that there is an

existence of dispute between the parties with regard to the execution of lease

of the land in question.

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3. Learned counsel appearing on behalf of the appellant submits that the

land in question belongs to the appellant and it was a frivolous objection,

raised by the respondent stating that the land belonged to U.P. Financial

Corporation Ltd.

4. From the record, we find that the appellant served a legal notice dated

7th November, 2016 on the 'Corporate Debtor' under Section 434(1) (a) of the

Companies Act, 1956 claiming a sum of Rs. 39,15,726/- (Rupees Thirty

Nine Lakhs Fifteen Thousand Seven Hundred and Twenty Six only) with

interest, for which, the 'Corporate Debtor' replied on 1st December, 2016,

through its counsel, raising dispute, the relevant portion of which, reads as

follows:

"4. Our Client has instructed us to inform you that your

notice under reply is misconceived and unsustainable

as clearly issued without being aware about the facts

and circumstances of the case. All the allegations

made therein are frivolous, without any substance and

hence denied. Your Client has not only suppressed the

material facts but also misinformed you about

sequence of events. Your Client has clearly not come

with clean hands as your notice under reply has been

issued without verifying the facts on record We submit

that the following facts assume relevance in this

regard:-

On 25th October, 2013 a Lease Deed was

executed between your Client and our Client

wherein factory shed admeasuring 36495 sq. ft

(2260 sq. ft. including constructed area) being

part of Khasra No.2150, Meerat-Mawana Road,

Village Mawana, Kalan, District Meerut

(hereinafter referred as 'Leased Premises) was

leased out to our Client.

At the time of execution of Lease Deed, your client

wilfully misled and induced our Client to believe

that your Client was the absolute and lawful

owner and was in peaceful possession of the

Leased Premises. Your Client also represented

that they had not created any right or charge or

encumbrance in favour of any entity or person in

respect of the Leased Premises that may

adversely affect the right of the Lessee (Our

Client) over the Leased Premises under this

Lease Deed. The relevant Clause in this regard is

reproduced as under:-

"8. Covenants

The LESSOR hereby represents, declare and agree;

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(b) That LESSOR have not created any

tenancy, license and lease deed or any

right in favour of any person in respect of

the Leased Premises nor has created any

such charge or encumbrance on the said

Leased Premises nor shall create or purport

to create any such charge or encumbrance

hereafter that may adversely affect the

right of the LESSEE over the Leased

Premises under this Lease Deed;"

To the shock and surprise of our Client, on 4th

April, 2014 and 24th June, 2014, our Client

received successive notices from UP Financial

Corporation Limited (UPFCL) threatening therein

that since the leasehold rights with respect to the

subject Leased Premises were mortgaged with

UPFCL and due to your Client's default, UPFCL

has initiated recovery action under Section 29 of

State Financial Corporation Act and as such

going to take over the possession of the Leased

Premises that was leased to our Client.

iv. The aforesaid fact clearly indicate that your

Client entered into the Lease Deed by

suppressing material facts which if informed earlier our Clients would tiot have executed the

Lease Deed in question since the Leased

Premises were encumbered and a charge in

favour of UPFCL was created by your Client

having consented to mortgage of the properties

including Lease Premises in favour of UPFCL by

one MIS Greenfield Corporation Ltd. MIS

Greenfield Corporation were reported to have

failed in repaying the loan amount leading UPFCL

to issue the notice dated 4th April, 2014 and 24th

June, 2014 and also published notices in the

newspaper. Copies of the notices dated 4th April,

2014 and 24th June, 2014 and newspaper cutting

is enclosed herewith for your ready reference as

ANNEXURE-B, collectively. UPFCL called upon

our Client to vacate the Leased Premises on the

ground that arrangement between your and our

Client was without prior approval of UPFCL. The

very edifice of the alleged claim of your Client as

such is illegal as. your Client did not enter into

legally enforceable Lease Deed much less

entitling your Clients to seek alleged rent which

our Clients rightly stopped and terminated the

Lease Deed in the circumstances being 6

threatened dispossession by UPFCL holding

superior rights than your Clients. In view offacts

as above your Client's notice under 434 (1) (a) is

a gross abuse of process of the law and not

maintainable.

V. On 8th October, 2014, our Client informed your

Client that they are not interested in keeping the

Leased Premises due to the reasons stated in the

UPFCL notices and issued notice in terms of

Clause 11 of the Lease and requested your Client

to take possession of the Leased Premises within

15 days. However, your Client, with a malafide

intention, deliberately failed to take the

possession of the Leased Premises. On 12th

November, 2014, our Client was constrained to

communicate to your Client that the Lease Deed

with respect to the said Leased Premises stands

terminated on 23rd October, 2014 and the same

are lying vacant and unused. Our Client further

called upon your Client to refund our Client's

security deposit amounting to Rs.3, 75,000/-

(Rupees Three Lakh Seventy Five Thousand

Only) paid in terms of Clause 5 of the Lease Deed

which has not been refunded by your Client and 7

thus they are liable to refund the same with

interest.

The aforesaid facts clearly indicate that our

Client has acted on good faith and is not liable to

pay any amounts whatsoever to your Client or as

claimed by your Client and the contentions vide

notice under reply are devoid of any merits hence

denied. The hotice under reply has been clearly

instructed with a sole motive to foist illegal claim

by putting pressure and threat of winding-up."

5. From the aforesaid reply, it is clear that there is 'an existence of a

dispute'. The case of the appellant is covered by this Appellate Tribunal's

decision in 'Kirusa Software Private Ltd. Vs. Mo bi lox Innovations

Private Ltd.'- [Company Appeal (AT)(Insolvency) No. 6 of 2017 (24th May,

2017). In these circumstances the application under Section 9 was not

maintainable. The Adjudicating Authority rightly dismissed the application.

6. In absence of any merit, the appeal is dismissed. However, in the facts

and circumstances of the case, there shall be no order as to costs.

[Justice S.J. Mukhopadhaya Chairperson

[Balvinder Singh] Member (Technical) /ng/