Whether Claim Of License Fee For Use And Occupation Of Immovable Premises Is An Operational Debt U/S 5(21), IBC? : NCLAT Refers To Larger Bench To Consider

The judgment of 7^th March 2022 of the NCLAT referred two questions for consideration before the 'Larger Bench' of 3 judges, which was constituted in the present case. The questions raised were as follows:

i. Whether the Judgment of this Tribunal in Company Appeal (AT) (Ins.) No. 331 of 2019 in the matter of 'Mr. M. Ravindranath Reddy Vs. Mr. G. Kishan & Ors.' Lays down the correct law.

ii. Whether claim of the Licensor for payment of License Fee for use and occupation of Immovable Premises for commercial purposes is a claim of 'Operational Debt' within the meaning of Section 5(21) of the Code.

The 2-judge Bench on 7^th March, 2022 expressed doubts about the correctness of the decision in the case of Mr. M. Ravindranath Reddy Vs. Mr. G. Kishan & Ors.

The three-judge Bench in the present case expressed similar doubts on the judgment in Mr. M. Ravindranath Reddy Vs. Mr. G. Kishan & Ors. on the ground that it did not notice the judgment of the Supreme Court in Mobilox Innovations (P)Ltd. Vs. Kirusa Software (P) Ltd.

The Appellate Tribunal referred the case to a Larger Bench for consideration of the questions framed in the judgement of 7^th March, 2022 and placed the matter before the Chairperson to constitute a Larger Bench.

Case Title: Jaipur Trade Expocentre Pvt. Ltd. v. Metro Jet Airways Training Pvt. Ltd

Counsel for the Appellant: Ms. Sanjana Saddy, Mr. Sanyat Lodha and Ms. Harshita Singhal and Hima Bhardwaj, Advocates

Counsel for the Respondent: Mr. Vikrant Arora, Advocate

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