Abhijit Sinha vs Asset Reconstruction Company India ...

Abhijit Sinha ...Appellant

Versus

Asset Reconstruction Company (India) Ltd. ...Respondent

Present:

For Appellant: Mr. Ritesh Singh, Mr. Navneet Kishore Singh, Advocates For Respondent:

ORDER

15.09.2022: Heard Learned Counsel for the Appellant.

2. This Appeal has been filed against the Order dated 14th July, 2022

passed by the National Company Law Tribunal, Kolkata Bench, Kolkata.

Learned Counsel for the Appellant challenging the Order dated 14th July, 2022

contends that under Insolvency and Bankruptcy Board of India (Insolvency

Resolution Process for Corporate Persons) Regulations, 2016, Regulation 2-A,

the Appellant has not filed the necessary document to prove the evidence of

default. He submits that even though at the time of filing Application which

was in the year 2019, provision of Regulation 2-A was not there but when they

filed the Rejoinder-Affidavit in the proceeding, the same ought to have been

filed. He further submits that the admission of Rs. 2 Crores was only with

regard to the amount of Rs. 2 Crores and there is no liability of the Corporate -2-

Debtor to make payment beyond Rs. 2 Crores. It is further submitted that

there was no evidence filed by the Financial Creditor to prove the default.

3. We have considered the submissions of Learned Counsel for the

Appellant and have perused the record.

4. Coming to the Regulation 2-A, which has been inserted in Regulation by

notification dated 13.11.2020, the Regulation 2-A is as follows:

"2-A. Record or evidence of default by financial creditor.-For the purposes of clause (a) of sub- section(3) of section 7 of the Code, the financial creditor may furnish any of the following record or evidence of default, namely:-

(a) certified copy of entries in the relevant account in the banker's book as defined in clause (3) of section 2 of the Banker's Books Evidence Act, 1891 (18 of 1891);

(b) an order of a Court or tribunal that has adjudicated upon the non-payment of a debt, where the period of appeal against such order has expired."

5. The said Regulation cannot come to the help of the Appellant in any

manner since the Application was filed in 2019, at that time Regulation 2-A

was not there. The Financial Creditor was not obliged to comply the

Regulation. The mere fact that Rejoinder was filed subsequently shall not put

any statutory obligation on the Appellant to file the documents of evidence of

default as provided in Regulation 2-A.

Company Appeal (AT) (Insolvency) No. 1086/2022 -3-

6. Now coming to the submission of Learned Counsel for the Appellant that

admission of Rs. 2 Crores in the balance sheet does not make liable to the

Corporate Debtor to make payment more than Rs. 2 Crores which is admitted

by the Appellant, the question under admission of Section 7 Application is not

as to what is correct liability of the Corporate Debtor when admission was

there that the amount of more than One Crore was due, it was sufficient for

admission of Section 7 Application.

7. Last submission of Learned Counsel for the Appellant that there was no

document filed in support of the Financial Creditor's case that default was

there. The Adjudicating Authority has considered the Application and other

materials on record and has recorded a finding of 'debt and default'. We thus

do not find any error in the admission of the Section 7 Application. There is

no merit in the Appeal, the Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Mr. Barun Mitra] Member (Technical)

Basant/nn

Company Appeal (AT) (Insolvency) No. 1086/2022