# In the matter of Rahul Gupta Vs. Mahesh Madhavan & Anr. CA (AT) No. 03-2018

> NCLAT judgment dated 2018-05-21. Citation: TCN-2018-NCLAT-00267. This is an appeal against the order dated 8th December, 2017, passed by the National Company…

- **Court:** NCLAT
- **Order date:** 21 May 2018
- **Citation:** TCN-2018-NCLAT-00267
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rahul-gupta-vs-mahesh-madhavan-anr-ca-23356953

## Summary

### Background

This is an appeal against the order dated 8th December, 2017, passed by the National Company Law Tribunal (NCLT), Chennai Bench, regarding an application preferred by Mahesh Madhavan under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code). The NCLT admitted the application, passed a moratorium order, and appointed a Resolution Professional. The appellant, Rahul Gupta, is challenging this order, arguing that the application under Section 9 was not maintainable against the second respondent, Black N Green Mobile Solutions Pvt. Ltd., as they were not the lessee or tenant of Mahesh Madhavan.

## Facts

Mahesh Madhavan (Operational Creditor) entered into a lease agreement on December 3, 2012, with Universal Power Systems Pvt. Ltd. for the lease of 8942 sq.ft. of premises. Subsequently, on March 27, 2015, another lease agreement was entered into between Kaneez Fathima Khader and others (Lessor) and Black N Green Mobile Solutions Pvt. Ltd. (Corporate Debtor), whereby the premises were sub-leased to Black N Green Mobile Solutions Pvt. Ltd. Mahesh Madhavan claimed that Black N Green Mobile Solutions Pvt. Ltd., as a sub-tenant, was directly paying part of the rent to him. Upon failure to pay the rent, Mahesh Madhavan filed an application under Section 9 of the I&B Code against Black N Green Mobile Solutions Pvt. Ltd. for a principal sum of Rs.28,04,553 along with 18%

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## Issues and analysis

### Issue 1: Whether a 'sub-tenant' can be treated as a 'Corporate Debtor' of the owner of the house (lessor) …

**Ratio:** A sub-tenant does not automatically become the 'Corporate Debtor' of the original lessor

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**Reasoning:** The court reasoned that merely because a sub-tenant occupies the premises, it does not

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**Interpretation:** The interpretation emphasizes the importance of privity of contract. The

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**Application:** In this case, Black N Green Mobile Solutions Pvt. Ltd. was a sub-tenant under a

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Rahul G…
- **Respondents:** Black N Green…; Mahesh Ma…

## Timeline

- **2012-12-03 — Lease Agr…**: Mahesh Madhavan and Universal Power Systems…
- **2015-03-27 — Sub-Lease Ag…**: Kaneez Fathima Khader and others entered into a sub-lease agreement with Black N Green…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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