# In the matter of Deltronix India Limited Company Appeal (IBC) No. 13-2023 in Company Petition No. (IB)-2963-(ND)-2019

> NCLT judgment dated 2023-05-09. Citation: TCN-2023-NCLT-03437. The case involves a dispute over unpaid rent and vacation of leased premises. The Appellants,…

- **Court:** NCLT
- **Order date:** 9 May 2023
- **Citation:** TCN-2023-NCLT-03437
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/deltronix-india-limited-company-appeal-ibc-no-13-2023-in-company-petition-no-ib-0852c251

## Summary

### Background

The case involves a dispute over unpaid rent and vacation of leased premises. The Appellants, owners of an industrial building, leased it to Deltronix India Limited (Corporate Debtor). The Corporate Debtor defaulted on rent payments starting in January 2014, and completely stopped paying in December 2014. The Appellants' predecessor in title terminated the lease agreement in 2015 and initiated arbitration proceedings, which resulted in an award in 2016 in favor of the Appellants. The Appellants then filed execution proceedings. During the pendency of the execution proceedings, CIRP was initiated against the Corporate Debtor. The Appellants filed a claim for unpaid rent with the Resolution Professional (RP), which was partially admitted. The Appellants then filed an

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## Facts

Mr. Tarun Khanna filed a petition against Deltronix India Limited (Corporate Debtor) under Section 9 of IBC, 2016, leading to the initiation of CIRP on 03.02.2021. The Appellants (Mr. A. Guhan and A.G.S. Sumyuha) are the owners of an industrial building that was leased to the Corporate Debtor. The lease commenced on 04.04.2012 for a term of seven years, ending on 04.04.2019, with a monthly rent of Rs. 21,83,000/-. The Corporate Debtor defaulted on rent payments from January 2014 and stopped completely in December 2014. The Appellants' predecessor in title terminated the lease agreement on 01.05.2015 and initiated arbitration proceedings. An arbitral award was passed on 07.09.2016, directing the Corporate Debtor to pay Rs. 1,26,95,876/- plus monthly damages of Rs.

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## Issues and analysis

### Issue 1: Whether the unpaid rent for the period during which CIRP was in effect (03.02.2021 to 18.10.2022) …

**Ratio:** CIRP cost is defined under Section 5(13) of the IBC, 2016, and includes costs incurred by

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**Reasoning:** The court reasoned that the Appellants' claim did not fall within the definition of CIRP

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**Interpretation:** The court interpreted the definition of CIRP cost narrowly, focusing on costs

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**Application:** The court applied the definition of CIRP cost to the specific facts of the

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## Parties

- **Judges:** SH. ASHOK KUMAR…; SH. L. N.…
- **Appellants:** A. Gu…
- **Respondents:** Deltronix India…
- **Advocates:** Abhinav Ha…; Sunita…; +4 more

## Timeline

- **2012-04-04 — Lease Comme…**: Lease agreement commenced between the Appellants and the Corporate Debtor for a term of…
- **2014-01-01 — Rent Default…**: The Corporate Debtor…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 42 — Appeal against the decision of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-42)

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