# In the matter of Atluri Foods Pvt. Limited

> NCLT judgment dated 2024-09-03. Citation: TCN-2024-NCLT-00689. Hindustan Builders, the Operational Creditor (OC), filed a petition under Section 9 of the…

- **Court:** NCLT
- **Order date:** 3 Sept 2024
- **Citation:** TCN-2024-NCLT-00689
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/atluri-foods-pvt-limited-eaa4671e

## Summary

### Background

Hindustan Builders, the Operational Creditor (OC), filed a petition under Section 9 of the Insolvency and Bankruptcy Code (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Atluri Foods Pvt Limited, the Corporate Debtor (CD), for defaulting on rent payments totaling Rs. 1,89,26,177. The OC claimed that the CD was irregular in rent payments from the beginning of the lease, with Rs. 1,64,74,500 as the principal sum and Rs. 24,51,677 as interest due as of April 1, 2022. The CD argued that the amount did not qualify as an 'operational debt' and that the default period fell under Section 10A of the IBC, which stipulates that amounts due during the COVID-19 period do not constitute a default. The CD also claimed to have vacated the premises due to the

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## Facts

Hindustan Builders (Operational Creditor) filed a petition under Section 9 of the IBC against Atluri Foods Pvt Ltd (Corporate Debtor) for defaulting on rent payments totaling Rs. 1,89,26,177. The OC is the owner of a property leased to the CD for a monthly rent of Rs. 10,50,000. A lease agreement was executed on 06.03.2018, with rent to commence from September 2018. The OC claimed the CD was irregular in rent payments, with Rs. 1,64,74,500 as principal and Rs. 24,51,677 as interest due as of 01.04.2022. The OC issued a demand notice on 08.04.2022. The CD argued that the amount did not qualify as an 'operational debt' and that the default period fell under Section 10A of the IBC (COVID-19 period). The CD also claimed to have vacated the premises on 07.05.2021 due to the

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## Issues and analysis

### Issue 1: Whether the unpaid lease rent qualifies as an …

**Ratio:** The claim of a licensor for payment of license fee for the use of demised premises for

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**Reasoning:** The court relied on the NCLAT's decision in Jaipur Trade Expocentre, which clarified that

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**Interpretation:** Section 5(21) of the IBC defines 'operational debt'. The interpretation hinges

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**Application:** The court applied the ratio from Jaipur Trade Expocentre to the present case,

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Hindustan B…
- **Respondents:** Atluri Foods Pvt…; Atluri Foods Pvt…

## Timeline

- **2018-03-06 — Lease Agreement…**: A registered lease agreement was…
- **2018-04-01 — Commencemen…**: The 'commencement date' in the…

## 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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