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Judgment
O R D E R
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.