# In the matter of Maharashtra Bio Fertilisers (India) Pvt. Ltd.

> NCLT judgment dated 2024-04-03. Citation: TCN-2024-NCLT-01843. Alliance Spaces Private Limited, the Operational Creditor, filed a petition under Section 9 of…

- **Court:** NCLT
- **Order date:** 3 Apr 2024
- **Citation:** TCN-2024-NCLT-01843
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/maharashtra-bio-fertilisers-india-pvt-ltd-0ad67619

## Summary

### Background

Alliance Spaces Private Limited, the Operational Creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Maharashtra Bio Fertilisers (India) Pvt. Ltd., the Corporate Debtor, due to unpaid license fees. The default arose from a Leave and License Agreement dated 30.11.2018, where the Corporate Debtor defaulted on payments since June 2020. The Operational Creditor served a demand notice on 03.03.2022, which the Corporate Debtor replied to on 17.03.2022, disputing the liability. The Corporate Debtor also claimed a pre-existing dispute based on a suit filed in the Court of Small Causes, Pune.

## Facts

Alliance Spaces Private Limited (Operational Creditor) and Maharashtra Bio Fertilisers (India) Pvt. Ltd. (Corporate Debtor) entered into a registered Leave and License Agreement on 30.11.2018 for premises in Pune. The license was for 60 months, from 15.01.2019 to 14.01.2024. The Corporate Debtor defaulted on monthly license fees since June 2020. The Operational Creditor issued a notice on 05.03.2021, stating the default constituted a breach. The Corporate Debtor communicated intent to vacate the premises before 30.09.2021 via email on 06.09.2021. A Statutory Demand Notice was served on 03.03.2022, replied to on 17.03.2022. The Corporate Debtor filed a suit in the Court of Small Causes, Pune, on 24.09.2021 (Suit No. 441/2021), before the demand notice. The Operational

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## Issues and analysis

### Issue 1: Whether the unpaid license fees constitute an 'operational debt' under the Insolvency and …

**Ratio:** Operational debt is defined under Section 5(21) of the IBC as a debt in respect of the

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**Reasoning:** The NCLT considered the terms of the Leave and License Agreement and the nature of the

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**Interpretation:** The NCLT interpreted the Leave and License Agreement as creating a commercial

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**Application:** The NCLT applied the definition of operational debt to the facts and found that

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## Parties

- **Judges:** ANIL RAJ C…; Kuldip Kumar…
- **Appellants:** Alliance Spaces…
- **Respondents:** Maharashtra Bio…
- **Advocates:** Nausher…; Nidhi C…; +3 more

## Timeline

- **2018-11-30 — Leave and License…**: Alliance Spaces Private Limited and Maharashtra Bio Fertilisers (India) Pvt. Ltd. entered…
- **2019-01-15 — Commencement o…**: The tenure of 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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