Kwality Catering Services v. Vineeta Maheshwari

Factual and Procedural Background

This is an order sheet dated 06.07.2023 of the National Company Law Tribunal, Mumbai Bench (Court-IV) in C.P. (IB)/760(MB)/2021 between State Bank of India (Applicant) and Aaj Ka Anand Papers Limited (Respondent) under Section 7 and Section 60(5) of the Insolvency and Bankruptcy Code, 2016. Counsel for the Applicant and Respondent, and counsel for the suspended Board of Directors, were present. Two interlocutory applications were listed: IA-1121/2023 and IA-2773/2023. IA-1121/2023 involved the Applicant's reliance on an NCLAT decision and a contention that a Leave and Licence Agreement had been terminated pursuant to Clause 21. The Respondent raised multiple objections to that application. The Tribunal heard submissions, reserved orders in IA-1121/2023 and permitted filing of synopses. IA-2773/2023, which sought recall of an earlier order dated 04.05.2023 in IA-1121/2023, was held to have become infructuous and was dismissed.

Legal Issues Presented

1. Whether the Leave and Licence Agreement was terminated pursuant to Clause 21 of the Leave and Licence Agreement (as argued by the Applicant relying on an NCLAT decision).
2. Whether this Bench has jurisdiction/power to adjudicate the dispute between licensor and licensee.
3. Whether the notice requirement under Clause 21 was complied with (i.e., whether notices were received by the Respondent).
4. Whether the Leave and Licence Agreement's existence prior to commencement of CIRP affects the relief sought.
5. Whether the Applicant/Liquidator has determined amounts refundable or receivable arising from termination (as contended by the Respondent).
6. Whether the order dated 04.05.2023 in IA-1121/2023 should be recalled (issue raised in IA-2773/2023).

Arguments of the Parties

Applicant's Arguments

• Relied on the Hon'ble NCLAT decision in "Adinath Jewellery Exports Vs. Mr. Brijendra Kumar Mishra" to submit that the Leave and Licence Agreement came to be terminated pursuant to Clause 21 of the Leave and Licence Agreement.

Respondent's Arguments

• Objected that this Bench has no power to adjudicate the dispute between licensor and licensee.
• Contended that the notices stipulated in Clause 21 were never received, so compliance with Clause 21 did not occur and the Leave and Licence Agreement remains in force.
• Contended that the Leave and Licence Agreement came into existence prior to commencement of CIRP.
• Alleged the Liquidator is targeting the premises occupied by the Respondent to harass him instead of liquidating other assets in priority.
• Stated that even if termination is admitted, the Applicant has not determined the amount refundable or receivable from the Respondent.

Table of Precedents Cited

Court's Reasoning and Analysis

The Tribunal heard counsel for the parties and perused the records. For IA-1121/2023, the Applicant relied on the cited NCLAT decision and argued termination under Clause 21; the Respondent raised jurisdictional and factual objections including non-receipt of notices and non-determination of payable/refundable amounts. The Tribunal reserved orders on IA-1121/2023 and allowed both parties liberty to file a synopsis of arguments within seven working days (maximum two pages). For IA-2773/2023, which sought recall of the order dated 04.05.2023, the Tribunal held that nothing survives in the matter and therefore the application had become infructuous.

Holding and Implications

IA-1121/2023: RESERVED.

Direct effect: The Tribunal reserved final orders on IA-1121/2023 and directed both parties to file written synopses of arguments within seven working days (not more than two pages).

IA-2773/2023: DISMISSED AS INFRUCTUOUS.

Direct effect: IA-2773/2023 is dismissed. The opinion does not state any broader precedent or legal principle newly established; no wider implications were articulated beyond the direct effect on these interlocutory applications.