# French Motor Car Company Limited vs. V&RO Hospitality Private Limited

> NCLT judgment dated 2026-07-17. Citation: TCN-2026-NCLT-00651. French Motor Car Company Limited (Operational Creditor) initiated Corporate Insolvency…

- **Court:** NCLT
- **Order date:** 17 Jul 2026
- **Citation:** TCN-2026-NCLT-00651
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-bengaluru/french-motor-car-company-limited-vs-vro-hospitality-private-limited-7j18s

## Summary

### Background

French Motor Car Company Limited (Operational Creditor) initiated Corporate Insolvency Resolution Process (CIRP) against V&RO Hospitality Private Limited (Corporate Debtor) under Section 9 of the Insolvency and Bankruptcy Code, 2016, for an alleged operational debt of Rs.2,33,26,272/-. The debt arose from the sale of tangible assets following the termination of a lease and revenue-sharing agreement. The Corporate Debtor disputed the claim, alleging the sale agreement was a sham and no goods were delivered, citing pre-existing disputes related to the earlier agreements.

## Facts

French Motor Car Company Limited (Operational Creditor) filed a petition under Section 9 of the IBC, 2016, against V&RO Hospitality Private Limited (Corporate Debtor).

The petition sought initiation of CIRP for an alleged operational debt of Rs.2,33,26,272/-, with the date of default being 28.02.2025.

The Operational Creditor owned commercial premises in Kolkata, which were leased to the Corporate Debtor for operating a restaurant.

A registered Lease Deed and a Revenue Sharing Agreement were executed between the parties on 29.07.2022.

The Operational Creditor invested approximately Rs.2,25,00,000/- towards construction and purchase of tangible and movable assets for the restaurant.

…

## Issues and analysis

### Issue 1: Whether there exists a genuine pre-existing dispute regarding the operational debt claimed by …

**Ratio:** A genuine pre-existing dispute, not merely a feeble legal argument or unsupported

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**Reasoning:** The Corporate Debtor's defence primarily focused on disputes related to earlier lease and

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**Interpretation:** The NCLT interprets "pre-existing dispute" narrowly, requiring

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**Application:** The Corporate Debtor failed to provide material demonstrating a bona fide

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## Parties

- **Judges:** Sunil Kumar…; Radhakrishna…
- **Appellants:** French Motor Car…
- **Respondents:** V&RO Hospitality…
- **Other parties:** Committee of…; Nemaraj…; +1 more
- **Advocates:** Joy S…; Swathi D…; +1 more

## Timeline

- **2022-07-29 — Agreements E…**: Lease Deed and Revenue Sharing…
- **2024-12-08 — Agreements Te…**: Lease Deed and Revenue Sharing Agreement terminated due to breaches by the Corporate…

## 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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