Atul Sharma vs Gudearth Homes Infracon Pvt. Ltd. & Anr

Present: For Appellant : Mr. Mukul Kumar Gupta and Mr. N.K. Singh, Advocates

For 1st Respondent: Ms. Anju Jain and Mr. Hitesh Sachar, Advocates

Mr. Sumnish Kr. Jain, RP

ORDER

06.03.2018 This appeal has been preferred by the Corporate Debtor -

Veebro Technoplast Private Limited against order dated 22nd September, 2017

passed by the Adjudicating Authority (National Company Law Tribunal),

Principal bench, New Delhi whereby and whereunder the application preferred

by the respondent - 'Gudearth Homes Infracon Private Limited' & Ors. (Financial

Creditors) under Section 7 of the Insolvency and Bankruptcy Code, 2016

(hereinafter referred to as the 'I&B Code') has been admitted, order of

moratorium has been passed and the Resolution Professional has been

appointed.

2. Learned counsel for the appellant submits that there is no 'debt' in the

eyes of the law as the amount was not paid to the Corporate Debtor. However,

from the record we find that Mr. Atul Sharma and Mr. Nipun Sharma, two 2

Directors of the Corporate Debtor were introduced through common friend in the

year 2013. At that time, Corporate Debtor needed financial assistance for a short

period, therefore, Corporate Debtor approached and requested the Financial

Creditor to help them out. Thereafter, on different dates as per the table

mentioned at Part IV of the application (Form I), sum of Rs. 51,750,000/- was

disbursed by the Financial Creditors which include sum of Rs. 25,00,000 given

by one Mr. Vinay Lakra. Therefore, the arguments advanced by the appellant

that no amount be given to the Corporate Debtor cannot be accepted.

Apart from the aforesaid fact we are of the view that the appeal preferred

by Corporate Debtor is not maintainable in view of the decision of the Hon'ble

Supreme Court in "M/s. Innoventive Industries Ltd. Vs. ICICI Bank & Anr.─

2017 SCC OnLine SC 1025",wherein Hon'ble Supreme Court observed as

follows:

"11. Having heard the learned counsel for both the parties,

we find substance in the plea taken by Shri Salve that the present

appeal at the behest of the erstwhile Directors of the appellant is

not maintainable. Dr Singhvi stated that this is a technical point

and he could move an application to amend the cause-title stating

that the erstwhile Directors do not represent the Company, but are

filing the appeal as persons aggrieved by the impugned order as

their management right of the Company has been taken away and

as they are otherwise affected as shareholders of the Company.

According to us, once an insolvency professional is appointed to

manage the Company, the erstwhile Directors who are no longer

Company Appeal (AT) (Insolvency) No. 308 of 2017 3

in management, obviously cannot maintain an appeal on behalf of

the Company. In the present case, the Company is the sole

appellant. This being the case, the present appeal is obviously not

maintainable. However, we are not inclined to dismiss the appeal

on this score alone. Having heard both the learned counsel at some

length, and because this is the very first application that has been

moved under the Code, we thought it necessary to deliver a

detailed judgment so that all courts and tribunals may take notice

of a paradigm shift in the law. Entrenched managements are no

longer allowed to continue in management if they cannot pay their

debts."

3. For the reasons aforesaid, we are not inclined to interfere with the

impugned order. The appeal is dismissed. However, in the facts and

circumstances of the case, there shall be no order as to cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/uk

Company Appeal (AT) (Insolvency) No. 308 of 2017