Status as on- 19/03/2023
The National Company Law Appellate Tribunal, New Delhi (NCLAT) while adjudicating an appeal filed in the matter of Sunil Kumar Aggarwal vs New Okhla Industrial Development Authority has held that Explanation to Section 14(1)(d) of Insolvency and Bankruptcy Code, 2016 does not include lease premium or lease rent amount.
Background Facts:
On 19.08.2011, the New Okhla Industrial Development Authority (NOIDA) entered into a lease deed with M/s GSS Procon Pvt. Ltd. (Corporate Debtor), in respect of Plot No. GH-01/C in Sector 143B, Noida for the construction of the residential flats. As per the lease deed, the Corporate Debtor was obliged to pay a lease premium of Rs. 24, 29, 66,779 to NOIDA. While the Corporate Debtor 10% of the lease premium was paid to the NOIDA, the rest remaining amount i.e., 90% of the lease premium was to be paid after a moratorium of 24 months from the date of allotment. During the moratorium period, interest @ 11% per annum, compounded half-yearly was to be paid to NOIDA.
In the meanwhile, the Corporate Debtor was admitted into Corporate Insolvency Resolution Process (CIRP) on 10.10.2019 and the Resolution Plan was submitted by the Consortium of Home Buyers Association (Crossroad Welfare Society), which was approved by the Committee of Creditors on 04.12.2020 and was pending approval by the Adjudicating Authority. On 04.06.2021 NOIDA requested the Resolution Professional to pay (i) Lease premium dues, calculated from 11.10.2019 to 30.06.2021, amounting to Rs. 15,54,52,427/-; and (ii) Lease rent for the year 2020-2021 and 2021-2022 amounting to Rs. 60,74,170/-
When the payments were not received within 15 days, NOIDA presumed that the Resolution Professional has declined the claim. Subsequently, NOIDA filed an application before the Adjudicating Authority, seeking direction from the Resolution Professional to make the payment of the due amount.
On 12.04.2022, the Adjudicating Authority directed the Resolution Professional to make the payment to NOIDA within 6 months or include the said amount as the Corporate Insolvency Resolution Process Cost.
The Resolution Professional challenged the order dated 12.04.2022 before the National Company Law Appellate Tribunal, New Delhi.
ISSUE RAISED BEFORE THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL
That whether Lease Premium and Lease Rent are included in Section 14(1)(D) of the Insolvency and Bankruptcy Code, 2016?
DECISION HELD
The National Company Law Appellate Tribunal, New Delhi Bench has held that the lease premium and lease rent given to the Corporate Debtor is not included in Section 14(1)(D) of the Insolvency and Bankruptcy Code, 2016.
Disclaimer: The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinions before relying upon the article. For more information, please contact us at ibc@centrik.in.
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