# In the matter of R Square Shri Sai Baba Abhikaran Pvt. Ltd. TP-MP-30 of 2019 {CP (IB) No. 510-9-NCLT-AHM-2019}

> NCLT judgment dated 2021-01-18. Citation: TCN-2021-NCLT-03286. The case involves an application filed by Saiom Developers Pvt Ltd, the Operational Creditor,…

- **Court:** NCLT
- **Order date:** 18 Jan 2021
- **Citation:** TCN-2021-NCLT-03286
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/r-square-shri-sai-baba-abhikaran-pvt-ltd-tp-mp-30-of-2019-cp-ib-no-510-9-nclt-ah-a821c368

## Summary

### Background

The case involves an application filed by Saiom Developers Pvt Ltd, the Operational Creditor, under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against R Square Shri Saibaba Abhikaran Private Ltd, the Corporate Debtor, due to a default of Rs. 52,74,056/-. The default pertains to unpaid compensation, common area maintenance charges, electricity dues, and parking charges related to leave and license agreements for units in 'K-Stars Mall' in Mumbai. The Corporate Debtor contested the application, arguing that the rent was not an operational debt, there was a pre-existing dispute, the claim was time-barred, and the Operational Creditor was in breach of contract.

## Facts

Saiom Developers Pvt Ltd (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against R Square Shri Saibaba Abhikaran Private Ltd (Corporate Debtor). The claim was for Rs. 52,74,056/-, comprising compensation, common area maintenance charges, electricity dues, and parking charges. These dues arose from leave and license agreements dated 2016-02-18 and 2014-04-21, for units in 'K-Stars Mall' in Chembur, Mumbai. The Operational Creditor argued that the Corporate Debtor defaulted on payments, leading to the application. The Corporate Debtor contested the application, claiming that the rent was not an operational debt, there was a pre-existing dispute, the claim was time-barred, and the Operational Creditor was in breach

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## Issues and analysis

### Issue 1: Whether the outstanding dues constitute an 'operational debt' under the Insolvency and Bankruptcy …

**Ratio:** Section 5(21) of the Insolvency and Bankruptcy Code, 2016 defines 'operational debt' as a

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**Reasoning:** The NCLT reasoned that letting out premises on rent is nothing but providing services.

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**Interpretation:** The interpretation of 'operational debt' under Section 5(21) of the IBC is

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**Application:** In this case, the Corporate Debtor had taken the premises on lease based on the

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Saiom Developers…
- **Respondents:** R Square Shri…; R Square Shri Sai…

## Timeline

- **2019-01-01 — TP/MP/30 o…**: Application filed under Section 9 of IBC by Saiom Developers Pvt Ltd against R Square…
- **2021-01-01 — Order Res…**: Order reserved by NCLT…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(21) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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