Amish Kumar Gupta vs K Subhra Narayan Mohapatra

[Arising out of order dated 22.07.2020 in CA-69(PB)/2020 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Principal Bench.]

IN THE MATTER OF: Amish kumar Gupta, C-103, Priyadarshini Apartment, I.P. Extension, Delhi-110092. ...... Appellant.

Versus

1. 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 ksnm72@hotmail.com Phone No. (838) 380-9699 ....... Respondent No. 1.

2. 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.

3. Punjab National Bank Through its Chief Manager Mr. Ramjeet Meena Pili Kothi, Hospital Road, Khurja (Bulandhahar) UP-203131 Email: bo0267@pnb.co.in Mobile No. 8171113351. ...... Respondent No. 3. 2

Present: 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

(25th January, 2022)

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 (National Company Law Tribunal), 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 (for short IBC) was allowed and appointed Mr. K.

Subhra Narayan Mohapatra as Liquidator.

2. The facts giving rise to this Appeal are as follows:

i) 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

lacs.

ii) 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. 135 of 2015.

iii) That in the month of April and August, 2013 the Financial Creditor sold

two properties of the guarantors situated at Khurja (U.P.), before issuing

Company Appeal (AT) (Insolvency) No. 696 of 2020 3 Section 13(4) notice on 17.05.2017 under the SARFAESI Act against the

Company, Promoters, Directors, Guarantors.

iv) 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.

v) 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.

vi) 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

fake.

vii) 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.

ix) 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 (AT) (Insolvency) No. 696 of 2020 4

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

3. 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 Creditor (Respondent No. 3) was 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 Professional (Respondent No. 2) was allowed and appointed Mr. K.

Subhra Narayan Mohapatra as Liquidator.

4. 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.

5. 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 (AT) (Insolvency) No. 696 of 2020 5

6. It is further submitted that the Hon'ble Supreme Court had passed the

judgments in the case of "Gaurav Hargovindbhai Dave Vs. Asset

Reconstruction Company (India) Ltd. & Anr. 2019 (10) SCC 572, Jignesh

Shah & Anr. Vs. Union of India & Anr. 2019 (10) SCC 750, B.K.

Educational Services Pvt. Ltd. Vs. Parag Gupta & Associates 2019 (11)

SCC 633 on the point of limitation.

7. 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

8. 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.

9. 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).

10. It is further submitted that on 20.09.2019, there was an MOU signed

between the Resolution Professional (Respondent No. 2) and Mr. Amish

Kumar (Appellant herein) that the Appellant will be the custodian of assets at

Rudrapur and allow valuer to visit the site for valuation.

Company Appeal (AT) (Insolvency) No. 696 of 2020 6

11. 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.

12. It is further submitted that no resolution plan received, with consent of

COC (Punjab National Bank with 100% voting) 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 Professional (Respondent No. 2) appointing

Mr. K. Subhra Narayan Mohapatra as Liquidator.

13. It is further submitted that the Liquidator (Respondent No. 1) received

the copy of the order from erstwhile Resolution Professional (Respondent No.

2) through 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 announcement (Form-B) on 01.08.2020 inviting

claims, intimated all the statutory authorities, filed e-Form 28 with ROC and

authorized with Income Tax e-Filing.

14. 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 Kumar (Appellant) to 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

undelivered.

Company Appeal (AT) (Insolvency) No. 696 of 2020 7

15. It is further submitted that after receiving claims, verified and

constituted stake holder consultation committee. The Liquidator visited

Punjab National Bank (Financial Creditor) 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.

16. 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.

17. 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. 3 (Punjab National Bank)

during 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 (AT) (Insolvency) No. 696 of 2020 8

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.

19. 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.

20. 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 (Annexure R3/D at page

48 of the Reply Affidavit filed by Respondent No. 3). In this regard moving of

an Application seeking liquidation of the Corporate Debtor on non-receipt of

any resolution plan was strictly in accordance with Section 33 of the Code as

such there was no infirmity or illegality whatsoever as alleged by the

Appellant. Once no resolution was received, the CoC was well within its rights

to take the decision to liquidate the Corporate Debtor.

21. It is further submitted that on 16.01.2020, the Corporate Debtor

erroneously, without any basis and much contrary to the provisions of the

Company Appeal (AT) (Insolvency) No. 696 of 2020 9

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.

22. 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.

23. 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 (AT) (Insolvency) No. 696 of 2020 10

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

dismissed.

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.

[Justice Anant Bijay Singh] Member (Judicial)

[Ms. Shreesha Merla] Member (Technical)

New Delhi 25th January, 2022 R. Nath

Company Appeal (AT) (Insolvency) No. 696 of 2020