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

> NCLT judgment dated 2019-06-14. Citation: TCN-2019-NCLT-02902. The petition was filed by the Operational Creditor against the Corporate Debtor for failing to…

- **Court:** NCLT
- **Order date:** 14 Jun 2019
- **Citation:** TCN-2019-NCLT-02902
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rain-automotive-india-pvt-ltd-ib-1095nd-2019-aa4fb192

## Summary

### Background

The petition was filed by the Operational Creditor 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 via 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 dated 2019-02-14 under Section 8 of the Insolvency & Bankruptcy Code, but received no reply.

## Facts

The Operational Creditor, Ritu Tandon, leased an industrial property to the Corporate Debtor, Rain Automotive India Pvt. Ltd., 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 was Rs. 23,04,284, in addition to unpaid electricity bills of Rs. 47,363. 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 to an ex parte proceeding. These facts establish the debt and default, forming

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## Issues and analysis

### Issue 1: Whether the petition filed by the Operational Creditor is maintainable under Section 9 of the …

**Ratio:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a corporate

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**Reasoning:** The court observed that the petition was filed in the required format and complied with

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**Interpretation:** Section 9 of the IBC provides the framework for operational creditors to

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**Application:** The court applied the provisions of Section 9 to the facts of the case, noting

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## Parties

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

## Timeline

- **2016-10-18 — Lease Deed E…**: Registered lease deed executed between Ritu…
- **2018-04-01 — Default on TDS Payments…**: Corporate Debtor allegedly…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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