# 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-03444. The case involves a dispute over non-vacation/occupation of premises owned by the Appellants by…

- **Court:** NCLT
- **Order date:** 9 May 2023
- **Citation:** TCN-2023-NCLT-03444
- **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-2c7ad087

## Summary

### Background

The case involves a dispute over non-vacation/occupation of premises owned by the Appellants by the Respondent (Liquidator for Deltronix India Limited) and non-payment of arrears of rent during the CIRP period. The Appellants are the lawful owners of the premises, which were leased to the Corporate Debtor (Deltronix India Limited) by the Appellants' predecessor in title. The lease commenced on 04.04.2012 and ended on 04.04.2019. The Corporate Debtor defaulted on rent payments from January 2014, and stopped completely from December 2014. The Appellants' predecessor invoked the lease agreement and initiated arbitration, resulting in an award in favor of the Appellants. Execution proceedings were filed, and subsequently, Mr. Tarun Khanna filed a petition under Section 9

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## Facts

Mr. Tarun Khanna filed a Company Petition (IB)-2963(ND)/2019 under Section 9 of the IBC, 2016, leading to the Corporate Debtor, Deltronix India Limited, being admitted into CIRP on 03.02.2021. The Appellants, Mr. A. Guhan and A.G.S. Sumyuha, are the owners of an industrial building in Kuthambakkam Village, Thiruvallur District, which was leased to Deltronix India Limited. 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 starting January 2014 and ceased payments entirely from December 2014. The Appellants' predecessor in title invoked Clause 21(a) of the Lease Agreement and initiated arbitration, resulting in an award dated 07.09.2016, directing the

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## Issues and analysis

### Issue 1: Whether the Appellants are entitled to rent for …

**Ratio:** The entitlement to rent depends on whether the claim can be considered an 'Insolvency

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**Reasoning:** The court reasoned that the Appellants' claim for rent cannot be treated as CIRP cost

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**Interpretation:** The court interpreted that the moratorium under Section 14 of IBC is intended

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**Application:** In this case, the court applied the ratio to the facts by noting that the lease

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## Parties

- **Judges:** SH. ASHOK KUMAR…; SH. L. N.…
- **Appellants:** A. Gu…
- **Respondents:** Deltronix India…

## Timeline

- **2012-04-04 — Lease Comme…**: Lease agreement commenced between Mr. KR Appavoo (predecessor of the Appellants) and…
- **2014-01-01 — Rent Default…**: Deltronix India Limited started…

## 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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