Dr Naveen Chaudhari vs Suraksha Asset Reconstruction Limited

Company Appeal (AT) (Ins) No.529 of 2020 [Arising out of Order dated 27.05.2020 passed by National Company Law Tribunal, New Delhi Bench - V in (IB) 2039 (ND)/2019)]

IN THE MATTER OF: Before NCLT Before NCLAT

Dr. Naveen Chaudhari .... Appellant S/o Sh. R.S. Chaudhri, R/o D-6, Sector 31, Noida, District Gautam Budh Nagar, Uttar Pradesh

Versus

1. Suraksha Asset Applicant/ Respondent No.1 Reconstruction Limited Financial Creditor Acting in capacity as a Trustee of Suraksha ARC-012, 20th Floor, 'A' Wing, Naman Midtown, Senapati Bapat Marg, Elphinstone Road, Mumbai Maharashtra-400013

2. Chandra Prakash IRP Respondent No.2 Interim Resolution Professional of Noida Medicate Centre Limited, 58-B, Pocket - 4, Mayur Vihar, Phase I, Delhi - 110092

For Appellant: Shri Prashant Katara, Advocate

For Respondents: Shri U.K. Chaudhary, Shri Chitranshul Sinha and Ms. Sonali Khanna, Advocates (R-1) 2

ORDER

08.06.2020 Heard Advocate Shri Prashant Katara for the Appellant.

Perused the record and the Impugned Order. The learned Counsel for the

Appellant is submitting that the Appellant is Director of the Corporate Debtor

namely, M/s. Noida Medicate Centre Ltd. The Respondent No.1 filed

Application under Section 7 of Insolvency and Bankruptcy Code, 2016 (IBC -

in short) having No. (IB) 2039 (ND)/2019) against the Corporate Debtor before

the National Company Law Tribunal, New Delhi Bench - V - Adjudicating

Authority. This Application under Section 7 came to be admitted. Respondent

No.1 (Applicant - Financial Creditor) claimed that the Corporate Debtor had

obtained credit facilities from Kotak Mahindra Bank and in the account, there

was default and the Corporate Debtor's account became NPA. The learned

Counsel for the Appellant states that the Account had become NPA on 30th

June, 2016.

2. It appears that the original Applicant - Financial Creditor claimed that

Kotak Mahindra Bank executed the Assignment Agreement dated 29.09.2017

(Page - 105) in favour of original Applicant. On the same date, according to

the learned Counsel for the Appellant, there was Restructuring Agreement

executed between the Corporate Debtor and the original Applicant. (Same is

at Page - 326). Learned Counsel for Appellant states that as per this

Restructuring Agreement, the corporate Debtor paid Rs.1.17 Crores against

the outstanding dues and Rs.33.50 Lakhs for processing fee. It is stated that

subsequently, the original Applicant - Financial Creditor sent letter dated 12th

February, 2019 (Page - 337) informing the Corporate Debtor as well as the

Appellant that there were defaults in repayment and the concessions given

Company Appeal (AT) (Ins) No.529 of 2020 3

under the Restructuring Agreement were being withdrawn and the same was

being revoked. Learned Counsel states that the original Applicant - Financial

Creditor started treating the Corporate Debtor for dues as under the

Assignment Deed and started claiming amounts on the basis of dues as with

the Kotak Mahindra Bank. Learned Counsel states that the Financial Creditor

started claiming dues of Rs.9 Crores as per the Assignment Deed which they

had in their favour from Kotak Mahindra Bank. We have asked the learned

Counsel as to how much according to the Corporate Debtor, are the dues

outstanding. The learned Counsel states that the same may be a little higher

than Rs.9 Crores but that would be as per Restructuring Agreement.

3. According to the Counsel, there are disputes with regard to steps taken

under the Restructuring Agreement and is referring to Section 37 of the Indian

Contract Act, 1872 which deals with obligations of parties under a contract.

The learned Counsel then refers to Section 55 of the Indian Contract Act, 1872

to submit that it would be necessary to deal with the effect of failure to perform

at a fixed time in contact in which time is essential. The learned Counsel

states that these provisions were required to be considered with the facts

involved between the parties, i.e. the original Applicant - Financial Creditor

and the Corporate Debtor as according to the learned Counsel, the Corporate

Debtor was not at fault while acting as per the Restructuring Agreement dated

29.09.2017. It is argued by the learned Counsel for the Appellant that in the

light of these aspects, the Adjudicating Authority erred in admitting the

Application under Section 7. Thus, the Appeal.

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4. We have gone through the record and the Impugned Order and in our

view, the fact remains that the loan was taken from Kotak Mahindra Bank

somewhere in 2015 and admittedly, the Account became NPA on 30th June,

2016. The Application under Section 7 has been filed on 16.07.2019. There is

no dispute that Kotak Mahindra Bank assigned its debts of five Accounts of

Corporate Debtor in favour of original Applicant - Financial Creditor which

were due from the Corporate Debtor as per the Assignment Deed dated

29.09.2017. When this is so, the original Applicant would step into the shoes

of Kotak Mahindra Bank with the Assignment Deed executed in its favour.

The subsequent Agreement between Kotak Mahindra Bank and the Corporate

Debtor as regards execution of the Restructuring Agreement and whether

there is default in the Restructuring Agreement or not, would not be issues

which will be necessary for the Adjudicating Authority to decide. It may have

been an effort by the Financial Creditor after the debt was assigned to it to

work out the restructuring between itself and the Corporate Debtor. If there

are disputes with regard to the actions taken on the basis of the Restructuring

of the Agreement, that issue is not necessary for the decision by the

Adjudicating Authority or this Appellate Tribunal in present set of facts. Broad

outline remains that financial debt of Kotak Mahindra Bank was outstanding

and the original Applicant - Financial Creditor took over the same by way of

Assignment Deed and the amounts are still outstanding which are more than

the benchmark under Section 4 of the IBC. There is debt due and default. We

find no reason to interfere with the Impugned Order so as to entertain the

Appeal.

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The Appeal is dismissed without admitting the same.

[Justice A.I.S. Cheema] Member (Judicial)

(Justice A.B. Singh) Member (Judicial)

[Kanthi Narahari] Member (Technical)

/rs/md

Company Appeal (AT) (Ins) No.529 of 2020