# In the matter of Leather World India Private Limited IA (IB) No.1687-KB-2019 in CP (IB) No.432-KB-2018

> NCLT judgment dated 2021-06-14. Citation: TCN-2021-NCLT-01973. The case involves a dispute between Anil Arora, the applicant, and Anil Agarwal, the liquidator…

- **Court:** NCLT
- **Order date:** 14 Jun 2021
- **Citation:** TCN-2021-NCLT-01973
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/leather-world-india-private-limited-ia-ib-no1687-kb-2019-in-cp-ib-no432-kb-2018-935d86f8

## Summary

### Background

The case involves a dispute between Anil Arora, the applicant, and Anil Agarwal, the liquidator of Leather World India Limited, regarding the tenancy and possession of a shop room at No.15, Lindsay Street, Kolkata. Anil Arora claims tenancy based on a commission agreement with Leather World India Limited, where the corporate debtor would utilize the premises for its leather business and pay commission. The corporate debtor defaulted on payments, leading to a civil suit filed by Anil Arora in the Calcutta High Court. Subsequently, Leather World India Limited went into liquidation, and Anil Arora filed an application seeking various reliefs, including disclaimer of the premises, direction for disbursement of admitted claims, and refund of amounts collected from a third

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## Facts

Hiralal Arora, the father of Anil Arora, took premises on rent in 1950 to run his business. Anil Arora entered into a commission agreement with Leather World India Limited on 2014-11-13, allowing them to use the premises for their leather business in exchange for a 3% commission on total sales, with a minimum guaranteed return of ₹2.00 lakh per month. Leather World India Limited defaulted on payments from April 2016 onwards, leading to outstanding dues of ₹30,19,513/- by November 2017. The corporate debtor sought to reduce the monthly guaranteed return to ₹1.10 lakh in June 2016 due to business losses. Anil Arora filed a civil suit (CS No.12/2018) in the Calcutta High Court to recover the dues. The corporate debtor allegedly transferred the premises to Vidhan Fashions,

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## Issues and analysis

### Issue 1: Whether the applicant is entitled to an order of disclaimer of the premises at No.15, Lindsay …

**Ratio:** A disclaimer of onerous covenants is not warranted if the covenants are not directly

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**Reasoning:** The court found that the commission agreement, even if taken at face value, did not

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**Interpretation:** The interpretation is that a disclaimer of onerous covenants is a remedy

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**Application:** The court applied this principle to the facts by noting that the commission

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** Anil Kumar Arora…
- **Respondents:** Leather World…; Anil Agarwal,…

## Timeline

- **1950-01-01 — Premises Taken…**: Hiralal Arora, the applicant's father, took…
- **2014-11-13 — Commission Ag…**: Anil Arora entered into a commission…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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