Axis Bank Limited vs Maharashtra Theatres Private Limited

Axis Bank Ltd. ...Appellant

Versus

Maharashtra Theatres Pvt. Ltd. ...Respondent

Present: For Appellant: Mr. Arjun Krishnan, Mr. Kaustav Som, Ms. Khushboo Mittal and Ms. Savani Gupte, Advocates.

For Respondent: Mr. Abhijeet Sinha, Mr. Kumar Anurag Singh, Ms. Aastha Shrestha, Mr. Zain A. Khan and Mr. Aniruth Purusothaman, Advocates.

ORDER

(Virtual Mode)

02.03.2022: Heard learned counsel for the Appellant and learned

counsel appearing for the Respondent. This Appeal has been filed against

order dated 08.10.2021 passed by the Adjudicating Authority (National

Company Law Tribunal), Court No. V, Mumbai Bench in C.P. No. 115/(IB)-

MB-V/2021. The Appellant - Financial Creditor has filed an application under

Section 7 of the Insolvency and Bankruptcy Code, 2016 for claiming the dues

of Rs.55,75,27,571/- including interest. The Application was filed on

30.12.2020. The Adjudicating Authority issued notice on the application.

Reply was filed by the Corporate Debtor. The Corporate Debtor in its Reply

has relied on Section 10A of the Code and submitted that since date of default

is 31.10.2020, no application for initiation of insolvency resolution process

could have been filed for any default on or after 25.03.2020. The Adjudicating

Cont'd.../ -2-

Authority after hearing the parties came to the conclusion that date of default

in Form-1 is 31.10.2020, hence, the application is barred by Section 10A. On

the aforesaid ground, the Adjudicating Authority has rejected the Application.

2. Learned counsel for the Appellant challenging the decision of the

Adjudicating Authority contends that in his application filed under Section 7

on 30.12.2020 he has clearly mentioned that the date of default is 29.01.2019,

which was the date when account of the Corporate Debtor was declared NPA.

It is submitted that the Adjudicating Authority wrongly assumed 31.10.2020

as the date when default was claimed. Learned counsel for the Appellant

referred to application under Section 7 which has been brought on record at

page 254 of the paper book.

3. Shri Abhijeet Sinha, learned counsel for the Respondent submits that

even if the submission of learned counsel for the Appellant is accepted that

the application was not barred by Section 10A, the matter needs to be remitted

back to the Adjudicating Authority to consider the matter afresh after hearing

the parties.

4. We have heard learned counsel for the parties and perused the record.

We are of the view that error has been committed by the Adjudicating Authority

in noticing the date of default. From the application filed before the

Adjudicating Authority, the date of default has been mentioned. Para 6 of the

synopsis indicates that the date of default is 29.01.2019 and 31.10.2010 was

Company Appeal (AT) (Insolvency) No. 963 of 2022 -3-

the date on which total amount was due and which is mentioned in Part IV

Item 2 of the Application. The Part IV Item 2 is to the following effect:

2. AMOUNT CLAIMED The total amount due and TO BE IN DEFAULT claimed as on 31/10/2020 is THE DATE ON Rs.55,75,27,571/- (Rupees Fifty WHICH THE Five Crore Seventy Five Lakh DEFAULT Twenty Seven Thousand Five OCCURRED Hundred Seventy One only), which includes unapplied interest and penal interest for default in payment. A break-up of the amount due as on 31/10/2020 has been explained in the document annexed herewith as Annexure 4.

5. When the Application under Section 7 is read in whole it is clear that

date of default was never claimed as 31.10.2020. The Adjudicating Authority

committed error is taking 31.10.2020 as the date of default and hence coming

to the wrong conclusion that the application is barred by Section 10A. We,

thus, are satisfied that Application was not barred by Section 10A. Further,

from the list of documents which was filed by the Applicant, the credit facility

recall notice dated 11.07.2019 is mentioned and brought on the record and

other notices have also been referred to which clearly indicate that 31.10.2020

was not date of default.

Company Appeal (AT) (Insolvency) No. 963 of 2022 -4-

6. In view of the aforesaid, the order dated 08.10.2021 is set aside. We

remit back the matter to the Adjudicating Authority to pass fresh order on

Section 7 Application after hearing the parties. Appeal is allowed accordingly.

[Justice Ashok Bhushan] Chairperson

[Dr. Alok Srivastava] Member (Technical) Archana/nn

Company Appeal (AT) (Insolvency) No. 963 of 2022