Dr Arabinda Kumar Rath vs India Sme Asset Reconstruction Company ...

Dr. Arabinda Kumar Rath ....Appellant Vs. India SME Asset Reconstruction Company Ltd. & Anr. ...Respondents

For Appellant: Mr. Ganesh Ch. Pandey, Advocate. For Respondents: Mr. Shivanshu Kumar, Ms. Sonam Malik, Advocates for R1.

ORDER

(Through Virtual Mode)

02.02.2022: Heard Shri Ganesh Ch. Pandey, Learned Counsel

appearing for the Appellant.

2. This Appeal has been filed against the order dated 08.12.2021 passed

by the Adjudicating Authority (National Company Law Tribunal), New Delhi

Bench-II by which order petition under Section 7 of the Insolvency and

Bankruptcy Code, 2016 ("Code" for short) filed by the Respondent No.1 has

been admitted. Application at the earlier round was rejected by the

Adjudicating Authority against which an Appeal was filed in this Appellate

Tribunal which Appeal was allowed by judgment and order dated

19.12.2018. Against which order, Appellant before us has filed a Civil Appeal

No. 8289 of 2019 before the Hon'ble Supreme Court which was dismissed by

judgment dated 08.11.2019. The matter was thereafter taken by the 2

Adjudicating Authority again and by the impugned judgment the Application

under Section 7 has been admitted.

3. Learned Counsel for the Appellant challenging the order of the

Adjudicating Authority has made two submissions. He submits that the

assignment on the basis of which the Application was filed by the

Respondents was under challenge before the High Court of Orissa in W.P. (C)

No. 17155/2019 where an interim order was passed by the High Court on

17.04.2019. Hence, assignee could not have filed Application under Section

7. He further submits that although this Tribunal rejected the submissions

of the Appellant that Application was barred by time but against the said

judgment Appeal was filed before the Hon'ble Supreme Court and the

Hon'ble Supreme Court had granted liberty to file objection to Appellant

which objection were raised but has not been considered by the Adjudicating

Authority. He further submits that there were efforts at earlier stages to

settle the matter with the Bank which did not fructified any useful order. It

is submitted that efforts were made for settlement in the year 2010-2019 but

no settlement could be arrived at.

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

Appellant and perused the record.

5. Insofar as the submissions of the Learned Counsel for the Appellant

that assignment in favour of the Respondent No.1 who was Applicant before

the Adjudicating Authority was under challenge in W.P. (C) No. 17155/2019,

Comp. App. (AT) (Ins.) No. 1098 of 2021 3

the order passed by the High Court dated 17.04.2019 has been quoted by

the Adjudicating Authority in its impugned judgment which is to the

following effect:-

"17.04.2019 Heard.

Petitioner has filed this writ petition to quash the assignment agreement and direct the opposite party-bank to allow the petitioner to exercise its right of redemption at the assignment value.

Learned counsel for the petitioner submitted that petitioner is ready and willing to settle the matter by giving a proposal to the opposite party- bank authority in view of subsequent development made during pendency of the writ petition.

Considering the above, in case the petitioner gives a proposal to the opposite party-bank authority within a period of ten days from today to settle the dispute in such event the opposite party-bank authority shall consider the offer of the petitioner within a period of two weeks from the date of giving of proposal. Result thereof shall be communicated to the petitioner.

Put up this matter on 15th May, 2019.

No coercive action shall be taken against the petitioner till the next listing."

Comp. App. (AT) (Ins.) No. 1098 of 2021 4

6. The only interim order granted by the High Court was that no coercive

action shall be taken against the petitioner till the next listing. The said

order cannot be read to mean that assignment in favour of the Respondent

was stayed by the High Court. Thus, we do not find any illegality in filing

Application by Respondent No.1 under Section 7. Thus, the said submission

does not help the Appellant.

7. Now, the second submissions of the Counsel for the Appellant is that

objections were raised by the Appellant regarding question of limitation in

pursuance of the liberty granted by the Hon'ble Supreme Court on

08.11.2019 which has not been considered on merits by the Adjudicating

Authority. As noted above, the Application under Section 7 was earlier

rejected by the Adjudicating Authority against which the Appeal was filed

before this Tribunal. This Tribunal vide its judgment dated 19.12.2018 had

allowed the Application filed by the Respondent No.1 and held that

Application was not barred by time. The question of limitation was answered

in favour of Respondent No.1 against which Appeal No. 8289 of 2019 was

filed by the present Appellant. The order of the Hon'ble Supreme Court dated

08.11.2019 in Civil Appeal No(s). 8289/2019 has also been extracted by the

Adjudicating Authority in its order, which is to the following effect:-

"1. Learned senior counsel appearing for the appellant has submitted that the direction has been issued to admit the appeal and there are certain objections to be raised by the appellant.

Comp. App. (AT) (Ins.) No. 1098 of 2021 5

2. The appellant is free to raised objections, which are permissible, in accordance with law.

3. The appeal is, accordingly, dismissed.

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

8. The Appeal was dismissed by the Hon'ble Supreme Court affirming the

judgment of this Appellate Tribunal meaning thereby the view of the

Appellate Tribunal that Application is not barred by time was upheld. The

fact that liberty was granted to raise certain objections by the Appellant

cannot be read to mean that Appellant was permitted to re-agitate the

question of limitation again before the Adjudicating Authority which had

become final. We thus, do not find any substance in the submission that

objection of limitation could have been raised by the Appellant before the

Adjudicating Authority. The question of limitation has become final between

the parties since judgment of this Appellate Tribunal was affirmed by the

Hon'ble Supreme Court.

9. Now coming to the submission of the Learned Counsel for that

Appellant that efforts were made by the Appellant for settlement with the

Bank, it is always open for the Appellant to settle the matter and file an

appropriate Application under Section 12A before the Adjudicating Authority,

who if satisfies, can always consider the Application and pass appropriate

order.

Comp. App. (AT) (Ins.) No. 1098 of 2021 6

10. We do not find any merit in this Appeal. The Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

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

Comp. App. (AT) (Ins.) No. 1098 of 2021