Operational debt includes lease rent for business premises; unsupported pre-existing dispute cannot bar section 9 insolvency action.

Rent and allied lease charges for business premises were treated as operational debt, and the lessor was accepted as an operational creditor because tenancy-related dues fall within the Insolvency and Bankruptcy Code. Applying the Mobilox standard, the tribunal found no real and pre-existing dispute: objections over assignment of lease, conversion charges, later notices, and subsequent proceedings were unsupported, inconsistent with the lease terms, or arose after the demand notice. The lessee was held responsible for conversion charges under the lease deed. The section 9 application was therefore maintainable, and initiation of CIRP was upheld.

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Issues: (i) Whether lease rent and allied charges payable under the lease arrangement constituted operational debt and whether the claimant had the status of operational creditor; (ii) Whether there existed a real and pre-existing dispute so as to bar admission of the section 9 application under the Insolvency and Bankruptcy Code, 2016.

Issue (i): Whether lease rent and allied charges payable under the lease arrangement constituted operational debt and whether the claimant had the status of operational creditor.

Analysis: Rent and licence-fee dues for use of premises for business purposes fall within operational debt. The provisions defining operational creditor and operational debt were applied to hold that tenancy-related dues are covered by the Code. The claimant's status as lessor was also accepted on the basis of the materials placed, and the objection that the claim could not be maintained against the corporate debtor on that score was rejected.

Conclusion: The dues constituted operational debt and the claimant was entitled to proceed as an operational creditor.

Issue (ii): Whether there existed a real and pre-existing dispute so as to bar admission of the section 9 application under the Insolvency and Bankruptcy Code, 2016.

Analysis: The Mobilox standard was applied to test whether there was a genuine dispute or merely a feeble, unsupported defence. The alleged disputes regarding assignment of lease, non-payment of conversion charges, later legal notice, and subsequent commercial proceedings were found insufficient, being either unsupported, inconsistent with the lease terms, or arising after the demand notice and application. The lease deed placed the burden of conversion charges on the lessee, and the later materials did not establish a real dispute existing before the demand notice.

Conclusion: No real and pre-existing dispute was shown, and the bar to admission under section 9 did not operate.

Final Conclusion: The admission of the insolvency application and initiation of CIRP were upheld, and the appeal failed.

Ratio Decidendi: Lease rent or similar charges for business use are operational debt, and where no real pre-existing dispute is shown under the Mobilox test, a section 9 application is maintainable.

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