# In the matter of CS Hospitality and Management Services Private Limited

> NCLT judgment dated 2024-03-21. Citation: TCN-2024-NCLT-01990. The case involves an application filed by Kavita Kumar, the Operational Creditor/Petitioner,…

- **Court:** NCLT
- **Order date:** 21 Mar 2024
- **Citation:** TCN-2024-NCLT-01990
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/cs-hospitality-and-management-services-private-limited-9bcd48c3

## Summary

### Background

The case involves an application filed by Kavita Kumar, the Operational Creditor/Petitioner, under Section 9 of the Insolvency and Bankruptcy Code, 2016, against C. S. Hospitality and Management Services, the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor, along with her husband Sarwan Kumar, owns a unit that was leased to the Corporate Debtor from 2007 onwards, with a lease agreement entered in 2009. The Operational Creditor alleges a breach of payment of rent by the Corporate Debtor, while the Corporate Debtor denies the outstanding dues.

## Facts

Kavita Kumar, along with her husband Sarwan Kumar, owns Unit No. 503 at C.T.S. No. 381/1-8, Swaroop Enclave, Andheri (East), Mumbai. The unit was leased to C. S. Hospitality and Management Services from 2007 onwards, with a lease agreement formalized in 2009 for 114 months. Clause 4 of the agreement stipulated rent payments with a 10% yearly increase and an interest-free deposit of Rs. 1,50,000. The Operational Creditor (Kavita Kumar) alleges that the Corporate Debtor (C. S. Hospitality) defaulted on rent payments after April 2010. The Operational Creditor approached the Corporate Debtor for a certificate confirming the outstanding rent, which the Corporate Debtor issued in July 2011, acknowledging the lessor-lessee relationship since 2007 and the outstanding rent.

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## Issues and analysis

### Issue 1: Whether the claim of the Operational Creditor qualifies as an 'operational debt' under the …

**Ratio:** The Hon'ble NCLAT in Jaipur Trade Expocentre Pvt. Ltd. Vs. M/s. Metro Jet Airways

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**Reasoning:** The court relied on the NCLAT's decision in Jaipur Trade Expocentre Pvt. Ltd. Vs. M/s.

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**Interpretation:** Section 5(21) of the IB Code defines 'operational debt' as a debt in respect of

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

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## Parties

- **Judges:** V.G. B…; Prabhat…
- **Appellants:** Kavita…
- **Respondents:** C. S. Hospitality…

## Timeline

- **2007-01-01 — Lease Comme…**: The Operational Creditor granted lease of the unit to the Corporate Debtor from 2007…
- **2009-09-14 — Lease Agr…**: Lease agreement entered into…

## 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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