# In the matter of DLKH Hospitality Services Private Limited

> NCLT judgment dated 2024-02-19. Citation: TCN-2024-NCLT-02536. Dhanashree Electronics Limited, the operational creditor, filed an application under Section 9…

- **Court:** NCLT
- **Order date:** 19 Feb 2024
- **Citation:** TCN-2024-NCLT-02536
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/dlkh-hospitality-services-private-limited-7113141c

## Summary

### Background

Dhanashree Electronics Limited, the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against DLKH Hospitality Services Private Limited, the corporate debtor, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The operational creditor claimed a default of Rs. 1,35,36,900/- including interest till 01.10.2022. The application was filed due to non-payment of license fees, service charges, and electricity charges as per agreements between the parties. The corporate debtor failed to appear in the proceedings despite multiple notices.

## Facts

Dhanashree Electronics Limited (DEL), the operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, against DLKH Hospitality Services Private Limited (DLKH), the corporate debtor. DEL claimed a total default of Rs. 1,35,36,900/-, including interest till 01.10.2022. This amount comprised unpaid license fees, service charges, and electricity charges. DEL and DLKH had entered into a 'Leave and License' agreement and a 'Service Agreement' on 06.07.2017, under which DEL provided licensed premises and services to DLKH. DLKH initially paid monthly bills but stopped payments from January 2020. DEL issued a demand notice on 07.11.2022. The corporate debtor, DLKH, did not appear in court despite multiple notices, including

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 is maintainable …

**Ratio:** Section 4 of the I&B Code prescribes a minimum threshold for initiating CIRP. Section

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**Reasoning:** The court reasoned that a portion of the default claimed by the operational creditor fell

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**Interpretation:** Section 10A provides a temporary suspension of CIRP initiation for defaults

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**Application:** The court applied Section 10A by calculating the default amount that occurred

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## Parties

- **Judges:** BIDISHA BA…; SHRI. D.A…
- **Appellants:** Dhanashree…
- **Respondents:** DLKH Hospitality…
- **Advocates:** S. K. T…

## Timeline

- **2017-07-06 — Leave and License Agreement and Service…**: Dhanashree Electronics Limited and DLKH Hospitality Services Private Limited entered into…
- **2020-01-01 — Default in P…**: DLKH Hospitality Services Private Limited stopped payment of monthly bills from January…

## 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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