Vikas Jain vs Md Nazim Khan Liquidator & Anr

Vikas Jain ...Appellant

Versus

MD Nazim Khan, Liquidator & Anr. ...Respondents

For Appellant: Ms. Neha Kapoor, Advocate

For Respondents: Md. Nazim Khan, Liquidator Mr. Mohtashim Kibriya and Mr. Nilotpal Shyam, Advocates

ORDER

(Virtual Mode)

23.09.2020 Heard Counsel for the Appellant and learned Counsel for

Respondent No.1 - Liquidator. This Appeal has been filed by the Appellant -

Landlord claiming that the premises from which the Corporate Debtor was

operating, was leased out and between the parties, the lease deed executed

on 11th December, 2017 was of 11 months on monthly rent w.e.f. 01.01.2018

to 30th November, 2018 of Rs.1.5 Lakhs excluding other charges like

electricity, water, taxes, GST, annual maintenance, charges of lift, etc. The

Corporate Debtor had been tenant since 2008. Appellant claims that the

property when it was given to Respondent No.2 was newly constructed and

the Corporate Debtor paid rent of Rs.1.5 Lakhs till June, 2018 and thereafter,

stopped paying. It is claimed that Respondent No.2 - Corporate Debtor caused

major damages to the premises due to negligence i.e. heavy load/machinery

being kept causing cracks to the beams apart from other damages. As the 2

Appellant made claims for damages, the Adjudicating Authority (National

Company Law Tribunal, New Delhi Bench - III) passed Orders in CA-465/C-

III/ND/2019 in IB-391/ND/2018 and Valuer was appointed which gave

Report. Appellant claims that after hearing the parties, the Impugned Order

came to be passed and the Adjudicating Authority reproduced the Reply of

Liquidator regarding various claims made by the Appellant and remarks of

the Liquidator regarding admitting or rejecting the claims and the Impugned

Order passed held that the decisions taken by the Liquidator were legally

sound and justified and the Application of the Appellant came to be dismissed.

2. The learned Counsel for the Appellant is submitting that during

pendency of this Appeal, the possession of the premises has been received.

She submits that the Report of the Valuer which was appointed through Order

of the Adjudicating Authority, is before this Tribunal (Page -132). The Report

dated 29th November, 2019 gives particulars of the estimates of repair works

required to be done in the premises. The learned Counsel submits that

actually the premises have been caused so much of damage that it would

require pulling down the existing structure and reconstructing and because

of this, the Appellant had claimed with the Liquidator amount of

Rs.1,15,50,350/-. She submits that Report of the Valuer is incomplete as the

Valuer does not say what repairs are major and what repairs are minor. She

submits that the Valuer should have examined the Lease Deed and given his

opinion as to which of the damages caused to the property could be attributed

to the Corporate Debtor.

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2. The learned Counsel for the Appellant further submits that the

Corporate Debtor has not paid TDS on the amounts from April, 2018 to July,

2018 and even that was rejected. She further states that Government dues of

UPSIDC were also rejected. The learned Counsel states that the Liquidator

agreed to pay rent which was falling due during CIRP period and the

liquidation proceedings period but did not agree to pay earlier rent due.

3. The learned Counsel for the Liquidator is supporting the Judgement of

the Adjudicating Authority and submitting that the dues payable to the

Income Tax Department or UPSIDC would be claims for the concerned

Departments to make.

4. Learned Counsel for the Appellant claims that in the Form submitted

to the Liquidator, the Appellant had relied on the Clauses of the Lease Deed

to claim the damages. She refers to Annexure - A2 (colly) where reference is

made to the rent and damages.

5. The Adjudicating Authority in the Impugned Order after hearing the

parties, had observed as under:-

"12. In relation to the first issue, this Authority vide Order dated 11th October, 2019 had directed the Liquidator and the Appellant (Landlord) to get the tenanted premises inspected through a Registered Valuer for the purpose of determining the quantum of damages, if any, caused. It is submitted by the Liquidator that he has proposed the names of three Registered Valuers, which were rejected by the Appellant. The Appellant has given different three names of the Registered Valuers, out of which, one Mr. Inderpal Singh was appointed, who has inspected the tenanted premises and sent the report on 29th November, 2019 to the Liquidator, wherein it has been noted that the estimate of re-repair work of the rented

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premises is Rs.21,40,629.93. It has further been noted by the registered Valuer in the report that as per the External and Physical Appearance of the property and out Professional Experience, there is no Structural damage to the building. Based on report of the registered Valuer, the Liquidator haw submitted that the report of the Valuer has brought out clearly that no damage has been caused to the building due to any negligence/misdemeanour of the Lessee (Corporate Debtor).

13. As per Para 14 of the Lease Agreement, 'All major repairs except those caused due to the negligence/misdemeanour of the Lessee shall be attended to and borne by the Lessor.' Para 14 of the Lease Agreement is reproduced as follows;

"That the Lessee shall attend to the minor repairs & maintenance of the said tenanted premises such as leaking tops, loose wiring etc. and other minor repairs to the internal electrical, water, drainage, in the said premises at its cost. All major repairs except those caused due to the negligence/misdemeanour of the Lessee, shall be attended & borne by the Lessor."

14. There is nothing on record to establish that the Corporate Debtor due to its negligence/misdemeanour had caused any damages to the tenanted premises and as per the report of the Valuer, there is no Structural damage to the building. Therefore, Corporate Debtor/Liquidator is not under legal obligation to pay any damages/compensation to the appellant as all major repairs are to be attended to and borne by the Lessor. Accordingly, the second issue stands decided against the Appellant/Landlord and in favour of the Liquidator.

15. The second issue raised by the appellant is with regard to the recovery of the damages @ Rs.10,000/- per day from the Corporate Debtor for illegally using the occupying the tenanted premises w.e.f. the date on which the period of the Lease Agreement expired. The Lease Agreement was in force for a period of 11 months starting with effect from 1st January, 2018 and ending on 31st November, 2018. Thereafter, the Lease Agreement is not renewed. The initial rate of rent fixed for the period of 11 months was @ Rs.1,50,000/- p.m., excluding all other charges except the House Tax. In the

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meantime, this Tribunal vide Order dated 13.06.2018 has initiated the CIR Process against the Corporate Debtor and the order for liquidation was passed on 3rd of April, 2019."

6. The Adjudicating Authority after going through the Report of the Valuer,

concluded that the Report shows that there is no structural damage to the

building and the damage could not be attributed to negligence/

misdemeanour. The Adjudicating Authority referred to the Lease Agreement

Para -14 and thus, declined to accept the claim of the Appellant.

7. In our view, when the matter is in liquidation, such claims which are

not already liquidated cannot be gone into in a manner Civil Court would

examine disputes being raised which would require recording of evidence.

Valuer could not give opinion if Corporate Debtor caused the damages, as is

being argued. The liquidation proceedings cannot be converted into Landlord

Tenant dispute. We have seen the reasons given by Liquidator regarding the

various claims, which are reproduced in the Impugned Order. In the set of

facts which we have before us, going through the reasons recorded by the

Adjudicating Authority, we do not find any reason to interfere.

There is no substance in the Appeal. The Appeal is dismissed.

[Justice A.I.S. Cheema] Member (Judicial)

[Shreesha Merla] Member (Technical) rs/md

Company Appeal (AT) (Ins) No.627 of 2020