Committee of Creditors Complies with Rent Payment Order, Contempt Application Dismissed

The Tribunal found that the Committee of Creditors had paid the rent as directed from 01.12.2018 to 13.06.2019, totaling Rs. 3,02,11,464. Consequently, the Applicant received the rent in compliance with the Tribunal's order, leading to the dismissal of the contempt application against the Committee of Creditors and the Resolution Professional.

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Issues Involved:
1. Initiation of Contempt Proceedings
2. Payment of Rent During CIRP
3. Definition of Moratorium Period
4. Inclusion of Rent in CIRP Costs
5. Jurisdiction and Application of Rule 11 of NCLAT Rules, 2016

Issue-wise Detailed Analysis:

1. Initiation of Contempt Proceedings:
The Applicant sought initiation of contempt proceedings against the Committee of Creditors (CoC) and the Resolution Professional (RP) for willful and deliberate disobedience of the order dated 31.01.2019, which directed the CoC to pay the rent for the leased premises from 01.12.2018 onwards. Despite these directions, as of the application date, a significant portion of the rent remained unpaid, compelling the Applicant to file for contempt.

2. Payment of Rent During CIRP:
The Corporate Insolvency Resolution Process (CIRP) was initiated on 25.07.2018 against the Corporate Debtor. The Adjudicating Authority directed the CoC to pay the rent from 01.12.2018 onwards. The CoC's appeal against this order was dismissed by the Appellate Tribunal on 31.01.2019, which upheld the payment directive. The Applicant argued that the Respondents continued to utilize the leased premises without paying the rent, leading to significant financial distress for the Applicant.

3. Definition of Moratorium Period:
The core dispute revolved around the definition of the moratorium period. The Applicant argued that the moratorium continued until the completion of liquidation, while the Respondents contended that it ended with the liquidation order on 14.06.2019. The Tribunal clarified that the moratorium ceased upon the initiation of liquidation, as per Section 14(4) of the Insolvency and Bankruptcy Code (IBC).

4. Inclusion of Rent in CIRP Costs:
The Tribunal examined whether rent could be included in CIRP costs. It referred to Section 5(13) of the IBC and Regulation 31 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which include amounts due to a person whose rights are prejudicially affected by the moratorium. The Tribunal concluded that the lessor's right to recover rent was affected by the moratorium, thus qualifying it as CIRP costs.

5. Jurisdiction and Application of Rule 11 of NCLAT Rules, 2016:
The Respondents raised a preliminary objection regarding the jurisdiction, arguing that the application should have been filed under Section 425 of the Companies Act, 2013, rather than Rule 11 of NCLAT Rules, 2016. The Tribunal dismissed this objection, stating that the mere mention of a wrong provision does not affect the merits of the case.

Conclusion:
The Tribunal found that the CoC had paid the rent for the period from 01.12.2018 to 13.06.2019, amounting to Rs. 3,02,11,464/-. The Applicant had received the rent as per the Tribunal's order. Therefore, no case was made out to punish the Respondents for contempt. The contempt application was disposed of without any order as to costs.

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