► Head notes :

Insolvency and Bankruptcy Code, 2016 - Section 105 - Appellant is the owner of the Leased Premises for its Hospital - Lease Deed was entered into between the Appellant and Dr. A.M. Arun for the period of 5 years at a monthly rent which was to be increased annually by 5%. - 2nd Floor was constructed on the premises for the eye clinic on the request of Dr. A.M. Arun, and in regard to that a Supplementary Lease Deed was executed and monthly rent was increased - Dr. A.M. Arun was the Corporate Debtor had paid only a sum of Rs.1,75,000/- and directed to pay the increased rent of Rs.2,25,000/- As against the Corporate Debtor, the Corporate Insolvency Resolution Process was initiated by the Adjudicating Authority and the same was stayed by the  Supreme Court of India - Stay was effected and the CIRP, was directed to be revived - Appellant submitted Form B  with a view to claim the payment of rental arrears, of Rs.2,48,48,227/- and the claimed sum was arbitrarily reduced to Rs.19,25,000/- as an admissible claim - Leased Period of 15 years got expired on 16.01.2022 and the Corporate Debtor had lost his right to remain in possession of the property But the Leased Premises was neither vacated nor the enhanced rent (which is outstanding) was paid to the Appellant till date - Appellant, filed the IA seeking to direct the Respondent to vacate the Leased out premises immediately, in view of the expiry of lease, as on 16.01.2022 - Upon calculation of the CIRP period directed the Respondent to pay all the leased rental dues of Rs.2,82,63,305/- as on 28.02.2022 to the Appellant forthwith - The Adjudicating Authority, disposed of the IA observing that the said Interlocutory Application is not maintainable, because of the fact that the Leased Deeds were unregistered, and further directed the Respondent to pay forthwith a total rent of Rs.2,25,000/- for the CIRP period - NCLAT - A Lease, more than 12 months has to be registered in the manner known to Law and in accordance with Law and an unregistered Lease / Documents cannot be looked into by a Court of Law / Tribunal even for a collateral purpose - Adjudicating Authority had in the impugned order had mentioned that Dr. A.M. Arun had already paid the amount towards the Lease Rental and came to the right conclusion that IA is not maintainable but had directed the Resolution Professional to pay the rent at Rs.2,25,000/- till the continuation of the Corporate Insolvency Resolution Process which was agreed to be paid - Appeal dismissed

► Name of Judge : Justice M. Venugopal Member (Judicial) & Shreesha Merla Member (Technical)

► Order:

Heard Ms. Aanchal Nichani, the Learned Counsel appearing for the ‘Applicant’ / ‘Appellant’ in IA No.1068/2022 in Comp. App. (AT)(CH)(Ins) No.429/2022.

According to the Learned Counsel for the ‘Applicant’ / ‘Appellant’ in IA No.1068/2022 in Comp. App. (AT)(CH)(Ins) No.429/2022, the impugned order passed by the ‘Adjudicating Authority’ (National

Company Law Tribunal, Division Bench -I, Chennai) on 19.10.2022 in

IA/434(CHE)/2022 in CA/1/IB/2017 and the same was uploaded on the ‘Tribunal’s’ website on 31.10.2022, and, thereafter, the ‘Applicant’ / ‘Appellant’, had applied for a ‘Certified Copy’ of the said ‘impugned order’, and the same was received on 11.11.2022.

It is further projected on the side of the ‘Applicant’ / ‘Appellant’ that he is a ‘Senior Citizen’, aged about 80 years, and there was a difficulty and delay in co-ordinating and obtaining his ‘signatures’ and in that process, there has occasioned a delay of ‘12 days’, in preferring the instant Comp. App. (AT)(CH)(Ins) No.429/2022.

To be noted that, as per Section 61 (2) of the Insolvency & Bankruptcy Code, 2016, ‘Every Appeal’ is to be filed within ‘30 Days’, before the ‘National Company Law Tribunal’, from the date of the ‘Order’, being passed by the ‘Adjudicating Authority’, (Tribunal). Further, as per Section 61 (2) of the I&B Code, 2016, the ‘Appellate Tribunal’ is bestowed with the right of ‘condoning the delay’ of preferring an ‘Appeal’ (after the expiry of ‘30 Days’) by not exceeding ‘15 days’, ofcourse, if it is satisfied that there was a ‘Sufficient Cause’, for not preferring an ‘Appeal’.

In the instant Case, Comp. App. (AT)(CH)(Ins) No.429/2022 was filed, admittedly, with a delay of ‘12 Days’, after the expiry of ‘30 Days’ from the date of passing of the ‘impugned order’ by the ‘Adjudicating Authority’, (Tribunal) and this ‘delay’, viz. 30+12 = 42 Days, is within the ‘permissible limit’ of 30+15=45 Days. As such, this ‘Tribunal’, taking note of the fact that the ‘Applicant’ / ‘Appellant’, being a ‘senior citizen’ and because of the ‘Old Age’, there was a delay in co-ordinating and obtaining the ‘signatures’ of him, by taking a lenient, liberal, purposeful, practical, pragmatic and rational approach, this ‘Tribunal’, ‘condones the delay of 12 Days’, by not adopting a pedantic and hyper-technical approach, but, taking a ‘sympathetic approach’ in extending its ‘Judicial Arm of Generosity’. Viewed in that perspective, the ‘Condonation of Delay’, IA No.1068/2022 in Comp. App. (AT)(CH)(Ins) No.429/2022 is Allowed. No Costs.

Company Appeal (AT)(CH)(Ins) No.429/2022 IANo.1069/2022

 (Under Section 61 of the Insolvency and Bankruptcy Code, 2016) (Arising out of the Impugned Order dated 19.10.2022 in IA/434(CHE)/2022 in CA/1/IB/2017

 passed by the ‘Adjudicating Authority’ (National Company Law Tribunal, Division Bench -I, Chennai)

In the matter of:

Mr. N. Nallusamy       …Appellant

V

Mr. S. Rajendran & Anr.        Respondents

Present :

For Appellant  :           Ms. Aanchal Nichani, Advocate For Respondents     :           Mr. Vijay Kumar, Advocate

ORDER

(Virtual Mode)

22.12.2022: Heard Ms. Aanchal Nichani, the Learned Counsel appearing

for the ‘Appellant’.

The ‘Adjudicating Authority’, (Tribunal), while passing the impugned order in IA/434(CHE)/2022 in CA/1/IB/2017 had observed the following :-

“The Application has been filed by the Applicant with the following

reliefs

1. Directing the Respondents to forthwith handover vacant and peaceful possession of the leased-out Premises belonging to the Applicant immediately in view of expiry of the lease as on January 16, 2022. Alternatively, upon conclusion of CIRP period.
2. Directing the Respondent to make payment of the Lease Rental and dues of Rs.2,82,63,405/- (Rupees two crores eighty two lakhs sixty three thousand four hundred and five only) (as set in para 9) as on 28.02.2022 to the Applicant forthwith.
3. Such further or other orders based on the facts and circumstances as the Hon’ble NCLT shall deem fit, in the interest of justice and equity.”

The substratum of this Application is a lease agreement at Annexure 3 & 4, the lease deed dated 16.01.2007 and supplementary lease agreement dated 21.07.2009 both for a period of 15 years. Admittedly none of the lease deed was registered. Therefore there is a violation of law. Be that as it may the Applicant has enjoyed the benefit of the period of unregistered lease deed and erstwhile Dr.

A.M. Arun has already paid the amount towards the lease rental. In

so far as the present application the claim is concerned is not maintainable. However, we direct the RP to pay the rent @ Rs.2,25,000/- till the CIRP continues, as agreed.”

and ‘disposed of’ the said ‘Application’, and directed that all ‘other Applications’ are to be listed on 10.11.2022 for ‘Physical Hearing’.

According to the Learned Counsel for the ‘Appellant’, the ‘Appellant’ is the owner of the ‘Leased Premises’ i.e., being used for ‘Vasan Health Care Pvt. Ltd., for its Hospital in Tiruchirapalli and based on the request of Dr. A.M. Arun, who represented himself as Proprietor of the Vasan Eye Care Hospital to let out his premises (Ground Floor and First Floor Originally) on a monthly rent for the purpose of establishing and running an ‘eye clinic’.

It is represented on behalf of the ‘Appellant’ that a ‘Lease Deed’ dated 16.01.2007 was entered into between the ‘Appellant’ and Dr. A.M. Arun for the period of ‘5 years’ at a monthly rent of Rs.1,75,000/-, which was to be increased annually by 5%.

According to the ‘Appellant’, the 2^nd Floor was constructed on the premises for the eye clinic on the request of Dr. A.M. Arun, and in regard to that a ‘Supplementary Lease Deed’ was executed on 21.07.2009 and monthly rent was increased to Rs.50,000/- and the total monthly rent payable to the ‘Appellant’, was Rs.2,25,000/-, which was effective from 28.07.2010, and the enhanced rent shall be increased by 5% on an annual basis. It is projected on the side of the ‘Appellant’ that Dr. A.M. Arun was the ‘Corporate Debtor’ had paid only a sum of Rs.1,75,000/- and directed to pay the increased rent of Rs.2,25,000/- from 28.07.2010.

As against the Corporate Debtor, the Corporate Insolvency Resolution Process (CIRP) was initiated in CA/1/IB/2017 by the ‘Adjudicating Authority’ (‘Tribunal’) and the same was ‘stayed’ by the Hon’ble Supreme Court of India on 04.05.2017 and on 05.09.2019, the ‘Stay’ was effected and the ‘CIRP’, was directed to be revived.

The clear cut stand of the ‘Appellant’ is that, he had submitted Form B on 14.10.2019, with a view to claim the ‘payment’ of ‘rental arrears’, of Rs.2,48,48,227/- and the ‘calim sum’ was arbitrarily reduced to Rs.19,25,000/- as an ‘admissible claim’. In fact, the ‘Adjudicating Authority’ (‘Tribunal’), had appointed the Respondent, as the ‘Resolution Professional’ of M/s. Vasan Health Care Pvt. Ltd.

It comes to be known that the ‘Leased Period’ of 15 years got expired on 16.01.2022 and the ‘Corporate Debtor’ had lost his right to remain in possession of the property. But the ‘Leased Premises’ was neither vacated nor the enhanced rent (which is outstanding) was paid to the ‘Appellant’ till date.

In the above background, the ‘Appellant’, had filed the IA/434(CHE)/2022 in CA/1/IB/2017, seeking to direct the ‘Respondent’ to vacate the Leased out premises immediately, in view of the expiry of lease’, as on 16.01.2022. Alternatively, upon calculation of the CIRP period directed the ‘Respondent’ to pay all the leased rental dues of Rs.2,82,63,305/- as on 28.02.2022 to the ‘Appellant’ forthwith.

The ‘Adjudicating Authority’, (‘Tribunal’) had ‘disposed of’ the IA/434(CHE)/2022 in CA/1/IB/2017 observing that the said ‘Interlocutory Application’ is not maintainable, because of the fact that the ‘Leased Deeds’ were unregistered, and further directed the ‘Respondent’ to pay forthwith a total rent of Rs.2,25,000/- for the ‘CIRP’ period.

The Learned Counsel for the ‘Appellant’ seeks in aid of the ‘Judgment’ of the Hon’ble Supreme Court of India in M/s. Park Street Properties (Pvt.) Ltd. V Dipak Kumar Singh & Anr. in Civil Appeal No.8361 of 2016 (arising out of SLP © No.24486 of 2014) wherein at Paragraph 11, it is observed as under:-

“ It is also a well settled position of law that in the absence of a registered instrument, the courts are not precluded from determining the factum of tenancy from the other evidence on record as well as the conduct of the parties. A three Judge bench of this Court in the case of Anthony v. KC Ittoop & Sons4, held as under:

“A lease of immovable property is defined in Section 105 of the TP Act. A transfer of a right to enjoy a property in consideration of a price paid or promised to be rendered periodically or on specified occasions is the basic fabric for a valid lease. The provision says that such a transfer can be made expressly or by implication. Once there is such a transfer of right to enjoy the property a lease stands created. What is mentioned in the three paragraphs of the first part of Section 107 of the TP Act are only the different modes of how leases are created. The first paragraph has been extracted above and it deals with the mode of creating the particular kinds of leases mentioned therein. The third paragraph can be read along with the above as it contains a condition to be complied with 4 (2000) 6 SCC 394 C.A.@SLP(C) No. 24486 of 2014 17 if the parties choose to create a lease as per a registered instrument mentioned therein. All other leases, if created, necessarily fall within the ambit of the second paragraph. Thus, dehors the instrument parties can create a lease as envisaged in the second paragraph of Section 107 which reads thus……… When lease is a transfer of a right to enjoy the property and such transfer can be made expressly or by implication, the mere fact that an unregistered instrument came into existence would not stand in the way of the court to determine whether there was in fact a lease otherwise than through such deed. ……………… Taking a different view would be contrary to the reality when parties clearly intended to create a lease though the document which they executed had not gone into the processes of registration. That lacuna had affected the validity of the document, but what had happened between the parties in respect of the property became a reality. Non registration of the document had caused only two consequences. One is that no lease exceeding one year was created. Second is that the instrument became useless so far as creation of the lease is concerned. Nonetheless the presumption that a lease not exceeding one year stood created by conduct of parties remains un-rebutted.” (emphasis laid by this Court) Thus, in the absence of registration of a document, what is deemed to be created is a month to month tenancy, the termination of which is governed by Section 106 of the Act.”

Despite the fact that the Hon’ble Learned Counsel for the ‘Appellant’ has relied upon the ‘aforesaid Supreme Court Judgment’, this ‘Tribunal’, on going through the impugned order in IA/434(CHE)/2022 in CA/1/IB/2017 is of the considered view that in the instant case, there is no simmering doubt that the Lease deed dated 16.01.2007 and ‘supplementary ‘Lease Agreement’ dated 21.07.2009 for a period of 15 years were unregistered and it is also not in dispute, that the ‘Lease’, got expired in January 2022.

Considering the fact, that a ‘Lease’, more than 12 months has to be registered in the manner known to Law and in accordance with Law and an unregistered Lease / Documents cannot be looked into by a ‘Court of Law’ / ‘Tribunal’ even for a collateral purpose, this ‘Tribunal’ comes to a resultant conclusion that the ‘Adjudicating Authority’ (‘Tribunal’) had in the ‘impugned order’ had mentioned that Dr. A.M. Arun had already paid the amount towards the ‘Lease Rental’ and came to the right conclusion that IA/434(CHE)/2022 in CA/1/IB/2017 is not maintainable but had directed the ‘Resolution Professional’ to pay the rent at Rs.2,25,000/- till

the continuation of the ‘Corporate Insolvency Resolution Process’ (CIRP), which was agreed to be paid.

Looking at from any point of view the instant Comp. App. (AT)(CH)(Ins) No.429/2022 is ‘devoid of merits’ and it fails.

In fine, the instant Comp. App. (AT)(CH)(Ins) No.429/2022 is ‘dismissed’. The connected IA/1069/2022 is Closed

► Summery :

NCLAT, Chennai - A Lease, more than 12 months has to be registered in the manner known to Law and in accordance with Law and an unregistered Lease / Documents cannot be looked into by a Court of Law / Tribunal even for a collateral purpose. Adjudicating Authority had in the impugned order had mentioned that Dr. A.M. Arun had already paid the amount towards the Lease Rental and came to the right conclusion that IA is not maintainable but had directed the Resolution Professional to pay the rent at Rs.2,25,000/- till the continuation of the Corporate Insolvency Resolution Process which was agreed to be paid.