Matter: Jaipur Trade Exposure Pvt. Ltd. v. Metro Jet Airways Training Pvt. Ltd
Order date: 7 March 2022
Summary:
Jaipur Trade Exposure Pvt. Ltd. (JTEPL), the appellant, entered into a license agreement (Agreement) with Metro Jet Airways Training Pvt. Ltd. (MJATPL) for the purposes of running an educational establishment on the premises owned by JTEPL. The Agreement was entered for an initial period of five years at an agreed fee of INR 4 lakhs per month. It is the case of JTEPL that a part payment was received by it towards the outstanding license fee in November 2017 and thereafter some cheques, amounting to INR 20 Lakhs were handed over to it by MJATPL. The cheques which were handed over by MJATPL were dishonored and despite several reminders, MJATPL did not clear the outstanding payment towards licensee fee. Consequently, a demand notice was issued by JTEPL to MJATPL claiming outstanding dues along with the interest amount. Since no reply was received to the said demand notice, JTEPL preferred an application before the NCLT. The application was rejected by NCLT on the ground that a claim arising out of a grant of license to use immovable property does not fall within the category of ‘operational debt’. Aggrieved by the findings of the NCLT, JTEPL preferred an appeal before NCLAT.
The NCLAT considering the aspects of the present matter analyzed the definitions of ‘operational creditor’ and ‘debt’ and observed that having taken the premises for commercial purposes from JTEPL for the purposes of running an educational institute, the parties are included under the expression ‘provision of services’. It further held that the failure to pay the license fee by MJATPL is nothing but a ‘debt’ which has been defaulted. However, the NCLAT observed that a coordinate bench of the NCLAT had taken a divergent view in the matter of M. Ravindranath Reddy v. G. Kishan & Ors. Accordingly, the NCLAT referred the issue to a larger
bench of three judges to resolve the conflict in opinions.
The matter is now pending before the chairperson on the administrative side for constitution of a larger bench.
