# In the matter of Rain Automotive India Pvt. Ltd. (IB)-1095(ND)-2019

> NCLT judgment dated 2019-06-14. Citation: TCN-2019-NCLT-02911. The Operational Creditor filed a petition against the Corporate Debtor for failing to liquidate…

- **Court:** NCLT
- **Order date:** 14 Jun 2019
- **Citation:** TCN-2019-NCLT-02911
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rain-automotive-india-pvt-ltd-ib-1095nd-2019-59adc106

## Summary

### Background

The Operational Creditor filed a petition against the Corporate Debtor for failing to liquidate its outstanding debt liability arising from unpaid rent. The Operational Creditor had leased an immovable premise to the Corporate Debtor under a registered lease deed dated 2016-10-18. The initial lease rent was Rs. 3,75,000/- + GST, subject to a 5% annual increase. The Corporate Debtor allegedly failed to deposit TDS from April 2018 to November 2018 and did not pay rent from December 2018 to March 2019, resulting in an outstanding liability of Rs. 23,04,284/-. Unpaid electricity bills amounted to Rs. 47,363/-. The Operational Creditor issued a demand notice on 2019-02-14 under Section 8 of the Insolvency & Bankruptcy Code, but received no reply.

## Facts

Ritu Tandon, the Operational Creditor, leased an industrial property to Rain Automotive India Pvt. Ltd., the Corporate Debtor, under a registered lease deed dated 2016-10-18. The agreed initial rent was Rs. 3,75,000 plus GST, with a 5% annual increase. The Corporate Debtor allegedly defaulted on TDS payments from April 2018 to November 2018 and rent payments from December 2018 to March 2019. The total outstanding liability, including unpaid electricity bills of Rs. 47,363, amounted to Rs. 23,04,284. The Operational Creditor issued a demand notice on 2019-02-14 under Section 8 of the IBC, but received no response. The Corporate Debtor did not appear in court despite being served notice, leading the court to proceed ex parte. The Operational Creditor sought initiation of

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## Issues and analysis

### Issue 1: Whether the petition filed by the Operational Creditor is admissible under the Insolvency and …

**Ratio:** Section 9 of the Insolvency and Bankruptcy Code, 2016 allows an operational creditor to

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**Reasoning:** The court observed that the petition complied with the requirements of Sections 9(3)(b)

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**Interpretation:** Section 9 provides the mechanism for operational creditors to recover

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**Application:** The Corporate Debtor's failure to pay rent and the absence of any dispute

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## Parties

- **Judges:** Ina Mal…; V.K. SUB…
- **Appellants:** Ritu Ta…
- **Respondents:** Rain Automotive…; M/s. Rain…
- **Advocates:** Nakul M…; Misha Ro…

## Timeline

- **2016-10-18 — Lease Deed Ex…**: A registered lease deed was executed between the Operational Creditor and the Corporate…
- **2018-04-01 — TDS Default…**: The Corporate Debtor allegedly…

## 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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