In Absence of Initial Challenge, Parties cannot take the Shelter of the Question of Limitation: National Company Law Appellate Tribunal, Principal Bench, New Delhi
Whether where, the appellant has not challenged the original order admitting the application whereby CIRP was initiated, the appellant can subsequently take the shelter of the question of limitation, was considered by the NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI, before a bench consisting of Justice Anant Bijay Singh, Member (Judicial); and Ms. Shreesha Merla,  Member (Technical), in the matter of Amish Kumar Gupt vs. K Subhra Narayan Mohapatra &amp; Ors. [Company Appeal (AT) (Insolvency) No. 696 of 2020], on 25.01.22. The present appeal was preferred by the appellant – Amish Kumar Gupta being aggrieved and dissatisfied by the order dated 22.07.2020 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Principal Bench whereby and where under the application filed by the Resolution Professional under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 (IBC) was allowed and appointed Mr. K. Subhra Narayan Mohapatra as Liquidator. On 31.08.2012, the account of the Corporate Debtor was classified as Non-Performing Asset by the Financial Creditor with the outstanding amount of Rs. 812.60 lacs. On 25.09.2012, the Notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The Financial Creditor filed Original Application for an amount of Rs. 1912.60 Lakhs before DRT II, Delhi. In the month of April and August, 2013 the Financial Creditor sold two properties of the guarantors situated at Khurja (U.P.), before issuing a Section 13(4) notice on 17.05.2017 under the SARFAESI Act against the Company, Promoters, Directors, Guarantors. On 30.12.2014, without considering the reply submitted by the Corporate Debtor in light of the show cause dated 11.09.2013, the Financial Creditor vide it order dated 20.12.2014 classified the Corporate Debtor as to be the wilful defaulter on the ground that the Corporate Debtor failed to submit any representation on the show cause notice which was completely fake. It was averred that on 12.01.2015, the Financial Creditor took physical possession of the plant of the Corporate Debtor at Pant Nagar, District Udham Singh Nagar, forcibly/illegally by putting its own lock on the main gate of the plant. It was also averred that on 18.05.2018, the Petition was filed by the Financial Creditor under Section 7 of the IBC with a prayer to trigger the Corporate Insolvency Resolution Process against the Corporate Debtor. The Adjudicating Authority vide its order dated 02.07.2019, admitted the Petition filed by the Financial Creditor and appointed the Interim Resolution Professional for carrying out the Insolvency Resolution Process of the Corporate Debtor. Thereafter, the Resolution Professional / Respondent No. 1 herein filed an Application under Section 33(2) of the IBC based on the resolution dated 17.12.2019 by the Committee of Creditors for liquidation of the Corporate Debtor. The said application was allowed by the Adjudicating Authority and hence the present appeal. The Learned Counsel for the Appellants argued that although the appellant has not challenged the order dated 02.07.2019 whereby the Application under Section 7 of the IBC filed on 18.05.2018 by the Financial Creditor (Respondent No. 3) was allowed; the appellant has challenged the order dated 22.07.2020 passed by Adjudicating Authority whereby the Application under Section 33(2) of the IBC filed by Resolution Professional (Respondent No. 2) was allowed and appointed Mr. K. Subhra Narayan Mohapatra as Liquidator. It was further submitted that the Adjudicating Authority admitted the application filed under Section 7 of the IBC without considering an important aspect of Limitation under Article 137 of the Limitation Act, 1963. It was further submitted that the application under Section 7 of the IBC was filed on 18.05.2018, on the basis of purported NPA dated 31.08.2012. It was asserted that this ignores the fact that the application under Section 7 of the IBC would be time barred if it is not filed within three years from the date of the cause of action. The Learned Counsels for the Respondents argued that the Liquidator is doing his statutory duty as assigned by NCLT from the date of appointment as Liquidator vide liquidation order dated 22.07.2020, therefore, based on these submissions there is no merit in the Appeal, the Appeal is fit to be dismissed. It was further asserted that as the appellant chose not to avail the remedy provided under the IBC, the order passed by the Adjudicating Authority attained finality. It was further contended that no objection was raised or received, and that CIRP was conducted strictly in accordance with the provisions of the IBC. It was also submitted that the said Applications were filed with the most ulterior motive and mala file intentions, that too only after the liquidation application was filed by the Resolution Professional solely with the object of frustrating the proceedings under the IBC. The National Company Law Appellate Tribunal, Principal Bench, New Delhi, after considering the facts, arguments presented, and placing reliance on several precedents, held that admittedly, the appellant has not challenged the original order dated 02.07.2019 passed by Adjudicating Authority admitted the Application filed by the Respondent No. 3 whereby the CIRP was initiated, so the Appellant cannot now take the shelter of the question of limitation. From the conduct of the appellant which has been mentioned therein above in the submissions of the Respondent No. 1 and 3, the tribunal was of the view that the appellant was taking all steps to delay the process. The tribunal did not find any illegality in the impugned order. Accordingly, the impugned order dated 22.07.2020 passed by the Ld. Adjudicating Authority (National Company Law Tribunal), New Delhi, Principal Bench was affirmed. The appeal was held to be devoid of merit and was accordingly dismissed.
NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI Company Appeal(Insolvency) No. 6920 Arising out of order dated 22.07.2020 in CA 69(PB) 2020 passed by the Adjudicating Authority New Delhi Principal Bench.] IN THE MATTER OF: Amish kumar Gupta C 103 Priyadarshini Apartment I.P. Extension Delhi 110092. Appellant. K Subhra Narayan Mohapatra Liquidator and Erstwhile Resolution Professional of General Power Limited 5 Ground Floor F 21 Lado Sarai Behind Kalimata Mandir New Delhi 110030 Email: liquidator.gpcpl@gamil.com Phone No.380 9699 ....... Respondent No. 1. General Power Company Private Limited Represented through erstwhile resolution professional K Subhra Nrayan Mohapatra 406 E International Trade Tower Nehru Place New Delhi 110019 Email: info@generalpowerindia.com ...... Respondent No. 2. Punjab National Bank Through its Chief Manager Mr. Ramjeet Meena Pili Kothi Hospital Road KhurjaUP 203131 Email: bo0267@pnb.co.in Mobile No. 8171113351. ...... Respondent No. 3 For Appellant: Mr. Abhijeet Sinha Mr. Avishkar Singhvi Mr. Nipun Katyal and Mr. Aditya Shukla Advocates. Mr. Amish Kumar Gupta party in person. For Respondent: Mr. K Subhra Narayan Mohaptra in person Liquidator. Mr. Apoorv Sarvaria and Mr. Prakhar Shrivastava Advocates for R 3. JUDGMENT Justice Anant Bijay Singh This Appeal has been preferred by the Appellant Amish Kumar Gupta being aggrieved and dissatisfied by the order dated 22.07.2020 passed by the Ld. Adjudicating Authority New Delhi Principal Bench in CP 69(PB) 2020 whereby and where under the Application filed by the Resolution Professional under Section 33(2) of the Insolvency and Bankruptcy Code 2016 was allowed and appointed Mr. K. Subhra Narayan Mohapatra as Liquidator. 2. The facts giving rise to this Appeal are as follows: On 31.08.2012 the account of the Corporate Debtor was classified as NPA by the Financial Creditor with the outstanding amount of Rs. 812.60 On 25.09.2012 the Notice issued under Section 13(2) of SARFAESI Act. The Financial Creditor filed Original Application for an amount of Rs. 1912.60 Lakhs before DRT II Delhi being T.A. No. 1315. That in the month of April and August 2013 the Financial Creditor sold two properties of the guarantors situated at Khurja before issuing Company Appeal(Insolvency) No. 6920 Section 13(4) notice on 17.05.2017 under the SARFAESI Act against the Company Promoters Directors Guarantors. That on 11.09.2013 the Financial Creditor had issued a show Cause Notice to the Corporate Debtor for adopting recourse identification of wilful defaulter of the loan transaction. The compliance of the show cause to be made within 15 days from the receipt of the show cause. After receipt of the show cause notice the Corporate Debtor submitted a representation dated 16.09.2013 by registered post by serving on the Financial Creditor personally on 16.09.2013 it was specifically pleaded for declaration of wilful defaulter and a process has to be followed as per the guidelines of Reserve Bank of India dated 01.07.2014. That on 30.12.2014 without considering the reply submitted by the Corporate Debtor in light of the show cause dated 11.09.2013 the Financial Creditor vide it order dated 20.12.2014 classified the Corporate Debtor as to be the wilful defaulter on the ground that the Corporate Debtor failed to submit any representation on the show cause notice which was completely That on 12.01.2015 the Financial Creditor took physical possession of the plant of the Corporate Debtor at Pant Nagar District Udham Singh Nagar forcibly illegally by putting its own lock on the main gate of the plant. viii) That on 18.05.2018 the Petition was filed by the Financial Creditor under Section 7 of the IBC with a prayer to trigger the Corporate Insolvency Resolution Process against the Corporate Debtor. The Ld. Adjudicating Authority vide its order dated 02.07.2019 admitted the Petition filed by the Financial Creditor and appointed the Interim Company Appeal(Insolvency) No. 6920 Resolution Professional for carrying out the Insolvency Resolution Process of the Corporate Debtor. Thereafter the Resolution Professional Respondent No. 1 herein filed an Application under Section 33(2) of the IBC based on the resolution dated 17.12.2019 by the Committee of Creditors for liquidation of the Corporate Debtor. The said Application was allowed by the Ld. Adjudicating Authority and hence this Appeal. Submissions on behalf of the Appellant The Learned Counsel for the Appellant during the course of argument and in his memo of Appeal along with Written Submissions submitted that although the Appellant has not challenged the order dated 02.07.2019 whereby the Application under Section 7 of the IBC filed on 18.05.2018 by the Financial Creditorwas allowed rather the Appellant has challenged the order dated 22.07.2020 passed by Ld. Adjudicating Authority whereby the Application under Section 33(2) of the IBC filed by Resolution Professionalwas allowed and appointed Mr. K. Subhra Narayan Mohapatra as Liquidator. It is further submitted that the Ld. Adjudicating Authority admitted the Application filed under Section 7 of the IBC without considering an important aspect of Limitation under Article 137 of the Limitation Act. It is further submitted that the Application under Section 7 of the IBC was filed on 18.05.2018 on the basis of purported NPA dated 31.08.2012. This Application ignores the fact that the Application under Section 7 of the IBC would be time barred if it is not filed within three years from the date of the cause of action. Company Appeal(Insolvency) No. 6920 It is further submitted that the Hon ble Supreme Court had passed the judgments in the case of "Gaurav Hargovindbhai Dave Vs. Asset Reconstruction CompanyLtd. & Anr. 2019SCC 572 Jignesh Shah & Anr. Vs. Union of India & Anr. 2019 SCC 750 B.K. Educational Services Pvt. Ltd. Vs. Parag Gupta & Associates 2019 SCC 633 on the point of limitation. It is further submitted that the Ld. Adjudicating Authority has mechanically allowed the liquidation process therefore the impugned order is fit to be set aside and the Appeal be allowed. Submissions of the Respondent No. 1 The Liquidator during the course of argument and his Reply Affidavit along with Written Submissions submitted that an Application under Section 7 of the IBC was filed by Punjab National Bank the Financial Creditor Respondent No. 3) for initiation of CIRP of General Power Company Private Limited the Corporate Debtor. The said Application was heard on 02.07.2019 with order of initiation of CIRP of the Corporate Debtor. It is further submitted that a bailable warrant issued under Section 19(2) of the IBC by the Ld. Adjudicating Authority against Ex Directors Appellant) on 20.08.2019 for co operation with the Resolution Professional Respondent No.2). It is further submitted that on 20.09.2019 there was an MOU signed between the Resolution Professional and Mr. Amish Kumarthat the Appellant will be the custodian of assets at Rudrapur and allow valuer to visit the site for valuation. Company Appeal(Insolvency) No. 6920 It is further submitted that the Resolution Professional filed Application under Section 43 & 66 of the IBC before the Ld. Adjudicating Authority for avoidable and fraudulent transactions. It is further submitted that no resolution plan received with consent of COC vide COC meeting dated 17.12.2019 the Resolution Professional filed an Application under Section 33(2) of the IBC for initiation of Liquidation of Corporate Debtor. The liquidation order passed by Ld. Adjudicating Authority on 22.07.2020 with the resignation of said Resolution Professionalappointing Mr. K. Subhra Narayan Mohapatra as Liquidator. It is further submitted that the Liquidatorreceived the copy of the order from erstwhile Resolution Professionalthrough mail but there was no handover of assets which are with Ex Directors financial records and business operation by the Respondent No. 2 to Respondent No. 1. Immediately necessary steps under IBC were taken by the Liquidator made public announcementon 01.08.2020 inviting claims intimated all the statutory authorities filed e Form 28 with ROC and authorized with Income Tax e Filing. It is further submitted that the Liquidator visited the Registered office at Nehru Place New Delhi and found the door closed outside. Thereafter contacted Mr. Amish Kumarto handover the possession of assets and financial records but he did not get any response. The Liquidator mailed atinfo@generalpowerindia.com info@insulatorindia.com vipul424@yahoo.com and also sent the liquidation order through speed post which returned Company Appeal(Insolvency) No. 6920 It is further submitted that after receiving claims verified and constituted stake holder consultation committee. The Liquidator visited Punjab National Bank and opened escrow a c for liquidation and also visited the plant at Rudrapur but no one from Corporate Debtor was present at the site despite giving prior notice through e mail and sms. Due to non co operation from Ex Directors the Liquidator filed an Application under Section 19(2) of IBC. It is further submitted that during possession of Regd. Office caretaker of Ex Directors filed a complaint with the National Human Rights Commission against Liquidator and Police the Liquidator unable to take possession. Due to non cooperation from Ex Director Liquidator is unable to do his statutory duty which is time bound under IBC. The Liquidator is not able to file claim with the Company with security deposit and accounts receivable outstanding. Some are under CIRP Liquidator unable to file claim due to unavailability of financial records to Liquidator which are with Ex Directors. It is further submitted that the Liquidator is doing his statutory duty as assigned by Ld. NCLT from the date of appointment as Liquidator vide liquidation order dated 22.07.2020 therefore based on these submissions there is no merit in the Appeal the Appeal is fit to be dismissed. Submissions on behalf of the Respondent No. 3. 18. The Learned Counsel for the Respondent No. 3during the course of argument and his Reply Affidavit along with Written Submissions submitted that the Appellant never filed an Appeal against the original order dated 02.07.2019 passed by the Ld. Adjudicating Authority Company Appeal(Insolvency) No. 6920 admitted the Application under Section 7 of the IBC. As the Appellant chose not to avail the remedy provided under the IBC the order passed by the Ld. Adjudicating Authority attained finality. It is further submitted that CIRP was conducted strictly in accordance with the provisions of the Code. The interim resolution professional received the claims only from Punjab National Bank and the Committee of Creditors was constituted with Punjab National Bank as the sole member. The CoC in its 6th CoC meeting dated 17.12.2019 decided to liquidate the Corporate Debtor as no resolution plan was received and it was resolved that the Resolution Professional will move liquidation application before the Ld. Adjudicating Authority. The minutes of 6th CoC meeting were also circulated to the Corporate Debtor but again no objection was raised or received. It is further submitted that consequently an Application bearing No. 69 2020 under Section 33 of the Code was filed by the Resolution Professional before the Ld. Adjudicating Authority on 21.12.2019 with a prayer to liquidate the Corporate Debtor. The said Application was also forwarded to the Counsel for the Corporate Debtor vide email dated 21.12.2019(Insolvency) No. 6920 Code filed an Application bearing no. 567 2020 for recall of orders dated 02.07.2019 and another Application bearing no. 566 2020 for stay of proceedings. The said Applications were filed with the most ulterior motive and mala file intentions that too only after the liquidation Application was filed by the Resolution Professional solely with the object of frustrating the proceedings under the Code. It is further submitted that an Application bearing no. 2307 2020 was filed for replacement of the liquidator. The said Application was listed before the Ld. Adjudicating Authority on 28.06.2020. On the said date Ld. Adjudicating Authority directed that the said Application will be heard with the liquidation Application. On 22.07.2020 the Ld. Adjudicating Authority passed the order on the liquidation Application and also replaced the proposed Liquidator. The details link of hearing dated 22.07.2020 was also shared with the Counsel for the Corporate Debtor and on the date of hearing no objection whatsoever was raised by the Counsel for the Corporate Debtor. In the impugned order dated 22.07.2020 the attendance of Sh. Amit Goyal Advocate for the Corporate Debtor is marked which shows that the liquidation order was passed in the presence of the Counsel for the Corporate Debtor. It is further submitted that the present Appeal is filed with the object to defeat and frustrate the CIRP. Based on these submissions the Appeal is fit to be dismissed with costs. FINDINGS 24. After hearing the parties and having gone through the pleadings and also submissions we are of the considered opinion that admittedly the Appellant has not challenged the original order dated 02.07.2019 passed by Company Appeal(Insolvency) No. 6920 Ld. Adjudicating Authority admitted the Application filed by the Respondent No. 3 whereby the CIRP was initiated so the Appellant cannot now take the shelter of the question of limitation. 25. From the conduct of the Appellant which has been mentioned hereinabove in the submissions of the Respondent No. 1 and 3 we are of the view that the Appellant is taking all steps to delay the process. 26. We do not find any illegality in the impugned order. Accordingly the impugned order dated 22.07.2020 passed by the Ld. Adjudicating Authority National Company Law Tribunal) New Delhi Principal Bench in CP 69(PB) 2020 is hereby affirmed. The Appeal being devoid of merit is 27. Registry to upload the Judgment on the website of this Appellate Tribunal and send the copy of this Judgment to the Ld. Adjudicating Authority National Company Law Tribunal) New Delhi Principal Bench forthwith. Member[Ms. Shreesha Merla] MemberNew Delhi R. Nath 25th January 2022 Company Appeal(Insolvency) No. 6920 