# In the matter of KK Ropeways Limited Vs. Billion Smiles Hospitality Private Limited Company Appeal (AT) (CH) (Ins) No. 246-2021

> NCLAT judgment dated 2023-06-12. Citation: TCN-2023-NCLAT-00443. The case involves an appeal against an order passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 12 Jun 2023
- **Citation:** TCN-2023-NCLAT-00443
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/kk-ropeways-limited-vs-billion-smiles-hospitality-private-limited-company-appeal-71475436

## Summary

### Background

The case involves an appeal against an order passed by the National Company Law Tribunal (NCLT), Bengaluru Bench, which dismissed an application filed by KK Ropeways Limited (Operational Creditor) against Billion Smiles Hospitality Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The application was based on an arbitral award obtained by KK Ropeways against Billion Smiles for non-payment of lease rentals and other charges related to a lease agreement for operating a food court. The NCLT dismissed the application, holding that there was a pre-existing dispute because Billion Smiles had filed an appeal against the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996.

## Facts

KK Ropeways Limited (KKR) and Billion Smiles Hospitality Private Limited (BSH) entered into a lease agreement on 2015-03-09, where BSH was to operate a food court under the name 'UPSOUTH' in a complex owned by KKR. BSH was obligated to pay a minimum guarantee of Rs. 40,000 per month. BSH defaulted on payments, leading KKR to issue reminders. On 2017-06-20, BSH expressed its desire to terminate the agreement and vacate the premises by 2017-09-22. KKR issued a notice on 2017-08-25 invoking Clause 13 of the agreement. BSH admitted its dues on 2017-09-14 and offered payment methods. KKR initiated arbitration proceedings, resulting in an ex-parte award on 2018-11-29 in favor of KKR for Rs. 26,33,022 plus interest. BSH challenged the award by filing an appeal under Section

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## Issues and analysis

### Issue 1: Whether the existence of a pending appeal under Section 34 of the Arbitration and Conciliation Act, …

**Ratio:** The existence of a pre-existing dispute, as evidenced by a pending Section 34 appeal

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**Reasoning:** The tribunal reasoned that the object of the IBC is not to be used as a debt recovery

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**Interpretation:** The term 'dispute' under the IBC is interpreted broadly to include any

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**Application:** In this case, the Corporate Debtor had filed an appeal under Section 34 of the

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## Parties

- **Judges:** M. Venu…; Shreesha…
- **Appellants:** Vinod S…
- **Respondents:** M/s. Billion…
- **Advocates:** Manu Kul…; Madhur A.…; +1 more

## Timeline

- **2015-03-09 — Lease Agr…**: KK Ropeways Limited and Billion Smiles Hospitality Private Limited entered into a lease…
- **2017-06-20 — Termination…**: Billion Smiles Hospitality Private Limited expressed its desire to terminate the lease…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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