Dharamveer Singh vs State Bank Of India & Anr

IN THE MATTER OF: Dharamveer Singh ...Appellant

Versus State Bank of India & Anr. ...Respondents

Present: For Appellant : Mr. Nikhil Nayyar, Sr. Advocate, with Mr. M.P. Srivignesh, Mr. Lakshman Raja T. and Mithun Kumar, Advocates

For Respondents : Mr. PBA Srinivasan, Mr. V. Aravind and Ms. Srishti Bansal, Advocates for R-1

ORDER

22.03.2023: Heard learned Counsel for the Appellant.

2. This is an appeal filed against an order dated 02.12.2022 by which order

Adjudicating Authority (NCLT Kolkata) has admitted Section 7 Application filed

by State Bank of India. This is the second round in which the Appellant has

come in this appeal. Earlier the Adjudicating Authority passed an order on

18.05.2022 by which the Adjudicating Authority had rejected the Application.

It was set aside by this Tribunal in Company Appeal (AT)(Insolvency) No. 1065

of 2022. This Appellate Tribunal, vide its judgment dated 31.10.2022 has set

aside the order dated 18.05.2022 passed by the Adjudicating Authority and

passed the following order:

"26. Now coming to the submission of Learned Counsel for the Respondent that application under Section 7 was nothing but the recovery mechanism resorted by the bank and cannot be said to be a bonafide application. Suffice it to say that that bank after declaration of account NPA taking steps for recovery of dues by invoking the provisions of SARFAESI Act, 2002 even after decree passed by the Debt Recovery Tribunal steps has been taken.

27. The IBC provides a forum for financial creditor to take steps for initiating insolvency resolution process. It is not the case that all the properties of the Corporate Debtor have been sold in the proceedings before the DRT.

28. The question as to whether there is any possibility to revive the Corporate Debtor is question which needs to be considered in the CIRP process. It is pre-mature to hold that it was not possible to revive the Corporate Debtor, and the application under Section 7 is to be rejected on this ground.

29. We thus are of the view that the submission of Learned Counsel for the Respondent that application was not bonafide cannot be accepted.

30. In view of the foregoing discussion we allow this appeal and set aside the impugned order dated 18.05.2022.

31. We direct the Adjudicating Authority to pass an order of the admission and all consequential orders within the period of one month from the date of copy of the order is produced.

32. We make it clear that the admission of Section 7 application shall not preclude the Corporate Debtor to submit any fresh proposal for OTS."

Company Appeal (AT)(Insolvency) No. 164 of 2023 & I.A. No. 621 of 2023 Page 2 of 4 3. Appellant challenged the aforesaid order of this Tribunal dated

31.10.2022 before the Hon'ble Supreme Court in Civil Appeal No. 03/2023

which appeal has been disposed of by Hon'ble Supreme Court by following

order dated 02.01.2023:

"ORDER Permission to file appeal is granted.

We do not find any good ground and reason to interfere with the impugned judgment/order and hence, the present appeal dismissed. We, however, clarify that the dismissal of the appeal has no bearing on the order dated 02.12.2022 and right of the appellant to challenge the same before the appellate tribunal in accordance with law.

Pending application(s), if any, shall stand disposed of."

4. It is to be noted that after the order of this Tribunal dated 31.10.2022,

Adjudicating Authority passed an order dated 02.12.2022 admitting Section 7

Application. Aggrieved by the said order dated 02.12.2022, this appeal has

been filed by the Appellant.

5. Learned Counsel for the Appellant submits that since the clarification

was granted by the Hon'ble Supreme Court that dismissal of the Appeal against

the order 31.10.2022 shall have no bearing on the order dated 02.12.2022 and

right of the Appellant to challenge the same in accordance with law.

6. Learned Counsel for the Appellant submits that in view of the above

clarification, this appeal has been filed. It is submitted that the Respondent in

fact are proceeding with recovery proceeding since Debt Recovery Tribunal has

already issued Sale Notice.

Company Appeal (AT)(Insolvency) No. 164 of 2023 & I.A. No. 621 of 2023 Page 3 of 4

7. We have considered the submissions of the parties and perused the

records. Order dated 02.12.2022 has been passed by the Adjudicating

Authority in consequence to the order passed by this Hon'ble Tribunal.

Submission which is now pressed by the Appellant that proceeding initiated by

Bank under Section 7 are only recovery proceeding, was the argument raised

before this Appellate Tribunal which was considered in its judgment dated

31.10.2022 and rejected in paragraphs 26 & 27, as noted above. We are of the

view the same submissions cannot be allowed to be made by Appellant to

question the admission of Section 7 Application by the Adjudicating Authority.

All other contentions were rejected by this Tribunal in its order dated

31.10.2022 which order has also been affirmed by Hon'ble Supreme Court.

There is no ground to entertain the appeal. The appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Mr. Barun Mitra] Member (Technical) akc/nn

Company Appeal (AT)(Insolvency) No. 164 of 2023 & I.A. No. 621 of 2023 Page 4 of 4