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2025 Supreme(Online)(NCLT) 8078
NATIONAL COMPANY LAW TRIBUNAL
SH. NILESH SHARMA, Member (Judicial), SH. CHARANJEET SINGH GULATI, Member (Technical)
Kapishvar Silicates Pvt Ltd – Appellant
Versus
VXL Instruments Limited – Respondent
IN CP (IB) NO. 570/MB/2024 | IA/3033/2025
For the Applicant: Adv. Deepak Shukla, Adv. Yohaann Limathwalla, Mr. Sharad Bansal, Ms. Shweta Thakur
For the Respondent: Adv. Aditya Mishra, G. Aniruth Purusotham, Sunny Gangar
Claims for rent as CIRP costs need a lawful lease backing; absence of lease nullifies the rent claim under the IBC.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 60(5) - Lease termination and possession disputes - The Application by the lessor for possession of the leased property after lease termination prior to CIRP initiation - The Tribunal finds no legal instrument supports the monthly rent's claim as CIRP costs, stating it lacks lawful backing due to the absence of a subsisting lease agreement during CIRP. (Paras 30-40)
(B) The court reiterates that claims for damages or loss require proper adjudication and substantial evidence, thus falling outside the NCLT's jurisdiction under the IBC for determination. (Paras 35-39)
Facts of the case:
The case involves a lease agreement between the applicant and the corporate debtor, which was terminated before the commencement of CIRP. The corporate debtor failed to vacate despite termination, prompting this application for possession and rent as CIRP costs.
Findings of Court:
The request for payment of monthly rent as CIRP costs was denied given the lack of a valid lease and operations by the corporate debtor.
Issues: The key issue centers around the rights to property possession post-lease termination and classification of rent as CIRP costs.
Ratio Decidendi: The court concluded that because the property was not required for ongoing operations and was not actively leased post-termination, the claim for rent as CIRP costs was unjustified and lacked legal instrument backing.
Result: IA is partly allowed and disposed of.
| Table of Content |
|---|
| 1. lease details and timeline of events related to the title. (Para 2 , 3 , 4) |
| 2. arguments regarding lease termination and entitlement to possession. (Para 6) |
ORDER
IA (IBC) NO. 3033 OF 2025
1. This I.A. is filed by M/s. Avon Data Cables Private Limited (“the Applicant”) under Section 60 (5) of the Insolvency and Bankruptcy Code, 2016 (“IBC/the Code”) with the following prayers:
a. Direct the Respondent to handover quiet, vacant and peaceful possession of the Property (as defined above) to the Applicant forthwith;
b. Direct the Respondent to treat the monthly sum of Rs.l,85,000/-from 26.11.2024 till the date of handover of possession of the Property as CIRP costs and pay such amount to the Applicant forthwith;
c. Pass such other orders in the interests of justice as this Hon'ble Tribunal deems fit.
Brief Facts as per the Application:
2. The Company Petition CP (IB) No. 570/MB/2024 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“the Code”) filed by M/s. Kapishvar Silicates Private Limited (“Petitioner/Financial Creditor”)for initiation of Corporate Insolvency Resolution Process (“CIRP”) of the M/s. VXL Instruments Limited (“Corporate Debtor”) was admitted vide order dated 26.11.2024 and Mr. Jayantilal Jain (“Respondent/ Resolution Professional”) bearing Registration No. IBBI/IPA-001/IP- P-01792/2019-2020/12845 was appointed as the Interim Resolution Professional for conducting CIRP proceedings of the Corporate Debtor.
3. M/s. Avon Data Cables Private Limited (“the Applicant”) leased the premises located at No. 74/C, Electronic City, Hosur Road, Bengaluru – 560100 to the Corporate Debtor under a Lease Deed dated 22.08.2020, which was subsequently renewed on 18.10.2023 for a further period of 36 months commencing from 01.10.2023. However, the Applicant terminated the lease vide notice dated 15.06.2024, effective from 15.09.2024.
4. Despite termination of the lease, the Corporate Debtor failed to vacate the property, and thereafter, the Corporate Debtor was admitted into CIRP on 26.11.2024.
5. Consequently, the present IA dated 14.03.2025 has been filed under Section 60 (5) of the Code by the Applicant seeking directions against the Respondent for handing over vacant possession of the said property and payment of the monthly rent with effect from 26.11.2024 as the CIRP Cost.
Submissions of the Applicant, in brief:
6. M/s. Avon Data Cables Private Limited, the Applicant, being the absolute owner of the premises bearing No. 74/C, Electronic City, Hosur Road, Bengaluru – 560100 (Property), entered into a Lease Deed with the Corporate Debtor on 22.08.2020 (Lease Deed 2020), whereby the Property was given on lease for a period of 36 months commencing from 1.10.2020, as per the agreed terms and conditions. The Applicant submits that the Corporate Debtor, being engaged in the business of developing hardware and software, was utilizing the Property for assembling computer hardware and installing its software on the said hardware.
7. It is submitted that the 36-month period under the Lease Deed 2020 expired on 30.09.2023. Thereafter, the lease was renewed, and a fresh Lease Deed was executed between the parties on 18.10.2023 (Lease Deed). As per the terms of the renewed Lease Deed:
a. The duration of the lease was 36 months commencing from 01.10.2023.
b. The monthly rental payable by the Corporate Debtor to the Applicant was Rs. 1,85,000/- with an escalation of 5% each year. This amount was payable on or before the l0th day of the subsequent month.
c. The Corporate Debtor paid interest free refundable security deposit of Rs. 9,00,000/- (Security Deposit) to the Applicant. The refundable amount is to be paid by the Applicant to the Corporate Debtor simultaneously, at the time of handover of vacant possession of the Property by the Corporate Debtor to be Applicant in the event of expiration or termination of the lease. The Applicant had the right to adjust the amount due and payable by the Corporate Debtor to the Applicant a
