Durga Prasanna Mishra vs Piramal Capital & Housing Finance ...

[Arising out of Order dated 19.12.2025 passed by the Adjudicating Authority (National Company Law Tribunal), Cuttack Bench in C.P. (IB) No.19/CB/2025]

In the matter of: Durga Prasanna Mishra ...Appellant Vs. Piramal Capital & Housing Finance Ltd. & Anr. ...Respondents

For Appellant: Ms. Bhabna Das, Mr. Aripit Kumar Mishra, Advocates. For Respondents: Mr. Krishnendu Datta, Sr. Advocate with Ms. Devika Mohan, Mr. Akshay Sharma, Mr. Yash Tandon, Advocates for R-1. Mr. Santosh Kumar Ray, Ms. Rituparna Sanyal, Ms. Ashmita Lohia, Ms. Srishti Mahana, Advocates for RP.

JUDGMENT

(2nd March, 2026)

Ashok Bhushan, J.

This Appeal by a Suspended Director of the Corporate Debtor has been

filed challenging the order dated 19.12.2025 passed by the Adjudicating

Authority (National Company Law Tribunal) Cuttack Bench by which Section

7 application filed by 'Piramal Capital & Housing Finance Ltd.', the

Respondent No.1 herein has been admitted. Aggrieved by the order initiating 2

the Corporate Insolvency Resolution Process (CIRP) against the Corporate

Debtor- 'Shree Baladevjew Infrastructure Pvt. Ltd.', this Appeal has been filed.

2. Brief facts of the case necessary to be noticed for deciding the Appeal

are:-

2.1. The Corporate Debtor was sanctioned a loan on 17.05.2013 by Dewan

Housing Finance Corporation Limited (DHFL). Security documents were also

executed. The total amount of Rs.7.55 Crores was disbursed between

22.05.2013 to 29.01.2015. The Corporate Debtor committed default and

account was classified as NPA on 31.05.2015. A demand-cum-recall notice

was issued on 01.06.2015 to the Corporate Debtor, the co-borrower and the

guarantors. No payment having been made, notice under Section 13(2) of the

SARFAESI Act, 2002 was issued on 22.09.2015. Corporate Debtor vide letter

dated 02.11.2015 agreed to pay the irregular amount within one month but

also raised objections to notice under Section 13(2) of the SARFAESI Act. A

possession notice under Section 13(4) of the SARFAESI Act was issued on

06.01.2016 seeking possession of the secured assets. Corporate Debtor again

sought rescheduling by its letter received on 01.02.2016 which was refused

by the Financial Creditor. Possession was taken by the Financial Creditor on

08.06.2018. On 05.01.2018 & 28.09.2020, Corporate Debtor proposed One

Time Settlement. The CIRP process against the Financial Creditor itself was

initiated by the NCLT, Mumbai Bench on 03.02.2019. In the CIRP of the

Financial Creditor, Resolution Plan was approved on 07.06.2021 in favour of

'Piramal Capital & Housing Finance Ltd.', the Respondent No.1 herein.

Corporate Debtor again submitted an OTS proposal on 23.07.2024 which was

Company Appeal (AT) (Insolvency) No. 320 of 2026 3

not accepted. An application under Section 7 was filed by the Respondent on

01.03.2025 claiming total amount in default as Rs.36,08,97,240/- which

included principal interest and penal charges as on 15.02.2025. In the

application under Section 7 notice was issued to the Corporate Debtor which

returned with endorsement "addressee cannot be located". Adjudicating

Authority vide order dated 16.07.2025 directed for substituted service

through publication in a local newspaper. The notices were published on

08.08.2025. On 22.08.2025, counsel entered appearance on behalf of the

Corporate Debtor and sought time to file Vakalatnama and reply. Again on

16.09.2025, the same request was repeated by the counsel for the Corporate

Debtor on the ground that the Managing Director had been released from

judicial custody recently. Despite the opportunities granted, no appearance

on behalf of the Corporate Debtor or reply was filed. Adjudicating Authority

proceeded ex parte against the Corporate Debtor on 06.11.2025 and heard

the matter on 25.11.2025. The Adjudicating Authority by the impugned order

held that the Financial Creditor has been able to successfully prove debt and

default. Despite opportunity no reply having been filed, Adjudicating

Authority also held that the application filed by the Financial Creditor is

within limitation. Adjudicating Authority admitted Section 7 application by

appointing Mr. Soumitra Lahiri as Interim Resolution Professional.

3. We have heard Ms. Bhabna Das, Learned Counsel for the Appellant,

Shri Krishnendu Datta, Learned Senior Counsel for the Respondent No.1 and

Shri Santosh Kumar Ray, Learned Counsel for the Resolution Professional.

Company Appeal (AT) (Insolvency) No. 320 of 2026 4

4. Learned Counsel for the Appellant challenging the order submits that

the Managing Director of the Corporate Debtor was in Police/ judicial custody

from 05.05.2025 to 17.09.2025 and again w.e.f. 25.10.2025 till 26.11.2025.

Adjudicating Authority passed order to proceed ex parte during the aforesaid

period. The order passed by the Adjudicating Authority is in violation of

principle of natural justice. Due to Appellant being in judicial custody and he

was required to attend his ailing father, Appellant could not attend the

proceeding. Entire proceeding has been taken in absence of any

representation from the Corporate Debtor. It is submitted that out of loan

facility of Rs.8 Crore only Rs.7.5 Crore was disbursed. Corporate Debtor has

already completed around 45-50% of the project and some further investment

shall be able to complete the project and handover the same to the possession.

Corporate Debtor has also repaid an amount of Rs.2.85 Crore to DHFL. The

project was delayed due to several reasons. Section 7 proceeding cannot be

use for reviving dead claims. Application was required to be filed within three

years from first date of default which was 01.12.2014 and NPA was declared

on 31.05.2015. Application filed on 01.03.2025 was barred by time.

5. Counsel for the Respondent- Financial Creditor refuting the submission

of the Appellant submits that the disbursal having not been disputed, the

default was admittedly committed by the Corporate Debtor in repayment of

the loan. Various OTS proposals given by the Corporate Debtor from time to

time clearly proves the debt and default. Adjudicating Authority has rightly

admitted Section 7 application. It is submitted that the first date of default

mentioned in Part IV as 01.12.2014 being the first instalment not paid after

Company Appeal (AT) (Insolvency) No. 320 of 2026 5

which notices were issued on 22.09.2015 under Section 13(2) of the

SARFAESI Act calling upon the Corporate Debtor and guarantors to pay

amount where in response to which Corporate Debtor by letter dated

02.11.2015 agreed to pay irregular amount installment within one month.

There have been various letters given by the Corporate Debtor acknowledging

the debt and praying for restructuring. Application filed on 01.03.2025 was

within limitation period. Limitation period can be treated to be extended by

giving benefit of Section 18 of the Limitation Act. Corporate Debtor having not

paid the amount, the debt and default is fully proved.

6. We have considered the submissions of the Counsel for the parties and

perused the record. The first issue which need to be considered is as to

whether application filed was beyond period of limitation. In Part IV, Financial

Creditor has claimed first default in payment of installment on 01.12.2014.

In Part-IV of the application, details of default and relevant pleadings with

respect to facts and events have been narrated by the Financial Creditor. The

loan account was classified as NPA on 31.05.2015. It is useful to notice

pleadings in Part-IV Serial No.2 at Item Nos.7 to 10 where Corporate Debtor

by letter dated 02.11.2015 agreed to pay the irregular amount installment

within period of one month which can be treated as first acknowledgment:-

2. AMOUNT CLAIMED TO 7. Due to the default of re-

BE IN DEFAULT AND payment of the loan THE DATE ON WHICH instalments, the loan account THE DEFAULT was classified as Non- OCCURRED Performing Asset ("NPA") on (ATTACH 31.05.2015. WORKINGS FOR COMPUTATION OF

Company Appeal (AT) (Insolvency) No. 320 of 2026 6

AMOUNT AND DATES 8. Thereafter, DHFL vide letter OF DEFAULT IN dated 01.06.2015 issued a TABULAR FORM) demand cum recall notice to the Corporate Debtor, TSFPL and its guarantors, Mr. Gagan Bihari Mishra, Mr. Durga Prasanna Mishra and Mrs. Mitali M. Rath ("Demand cum Recall Notice"). Copy of the Demand cum Recall Notice is annexed herewith as ANNEXURE-14.

9. The Corporate Debtor, TSFPL and its guarantors failed to pay the outstanding debt in terms of the Demand cum Recall Notice, and therefore, DHFL was constrained to issue a Notice dated 22.09.2015 under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act"), calling upon the Corporate Debtor, TSFPL and its guarantors to pay the outstanding debt of Rs.8,19,52,704/- (Rupees Eight Crores Nineteen Lakhs Fifty Two Thousand Seven Hundred and Four Only) payable as on 22.09.2015 along with further interest, non-compliance charges, incidental expenses, costs and any other charges, etc. from 23.09.2015 till the date of repayment within 60 (sixty) days from the receipt of this notice ("Demand Notice"). A copy of the said Notice under Section 13(2) of the SARFAESI Act dated 22.09.2015 is annexed herewith as ANNEXURE-15.

10.The Corporate Debtor vide its letter dated 02.11.2015, inter alia agreed to pay the Company Appeal (AT) (Insolvency) No. 320 of 2026 7

irregular amount/instalment within a period of one month.

Copy of the letter dated 02.11.2015 is annexed herewith as ANNEXURE-16.

7. There have been further letters by the Corporate Debtor requesting for

restructuring. Prayer for restructuring was made by the Corporate Debtor by

letter dated 18.11.2015. Part IV also gives the details of OTS proposal received

from the Corporate Debtor on 05.01.2018 and thereafter various OTS

proposals letter dated 23.07.2024 and 23.08.2024. All the aforesaid

correspondences which is pleaded in Part IV was filed along with the Part IV

application. The details pertaining to CIRP initiation against DHFL has also

been pleaded in Part IV which proceedings came to an end by approval of the

Resolution Plan on 07.06.2021.

8. The details as mentioned in Part IV of Section7 application which was

supported by relevant letters and the OTS clearly contained acknowledgment

within the meaning of Section 18 of the Limitation Act. The Financial Creditor

itself was under CIRP from 03.02.2019 to 07.06.2021 and further the order

passed by the Hon'ble Supreme Court in Suo Moto Writ Petition No.3 of 2020

shall enure to the benefit of the Financial Creditor. Adjudicating Authority

has noticed the OTS proposals and has held that the limitation for filing the

application was to expire on 23.08.2027. Last OTS proposal having been given

on 23.08.2024, we thus are of the view that there are sufficient materials on

the record to give the benefit of Section 18 of the Limitation Act.

Company Appeal (AT) (Insolvency) No. 320 of 2026 8

9. From the letter accepting the acknowledgment and praying for

restructuring which was issued as early as in 2015 which was issued on

02.11.2015 and 18.11.2015 shall give extension of limitation under Section

18. Further OTS proposal was given on 05.01.2018 shall also give extension

of the limitation and thereafter OTS proposals given on 28.09.2020,

23.07.2024 shall clearly extend the limitation. Benefit of the Financial

Creditor being under CIRP and order passed by the Hon'ble Supreme Court

in Suo Moto Writ Petition No.03 of 2020 shall also clearly enure to benefit of

the Financial Creditor. We, thus, uphold the finding of the Adjudicating

Authority that the application was filed within the limitation.

10. Now coming to the submission of the Appellant that Managing Director

was under police/judicial custody. The Adjudicating Authority in Paragraphs

11 to 13 of the impugned order had noticed following:-

"11. The notice issued to the Corporate Debtor having been returned with the endorsement "addressee cannot be located", as recorded in the orders dated 21.05.2025 and 09.07.2025, this Adjudicating Authority, vide order dated 16.07.2025, directed effecting substituted service through publication in a local Odia daily newspaper. In compliance with the said direction, the Financial Creditor effected publication in the Odia daily "Sambad", Bhubaneswar and Cuttack Edition, dated 08.08.2025, and thereafter filed an affidavit of compliance dated 12.08.2025 enclosing a copy of the said publication, thereby evidencing due compliance with the directions of this Adjudicating Authority.

Company Appeal (AT) (Insolvency) No. 320 of 2026 9

12. Subsequently, on 22.08.2025, Mr. Bijay Jena, learned counsel, entered appearance on behalf of the Corporate Debtor and sought time to file his Vakalatnama and reply. On the next date of hearing, 16.09.2025, the learned counsel reiterated the request for adjournment, submitting that the Managing Director of the Corporate Debtor had recently been released from judicial custody. Considering the submission, this Adjudicating Authority granted opportunity of two weeks to file the reply. a final

13. Despite the opportunities granted, there was no appearance on behalf of the Corporate Debtor on 07.10.2025, nor was any reply filed. Accordingly, vide order dated 06.11.2025, the Corporate Debtor was proceeded against ex-parte. The matter was thereafter heard finally on 25.11.2025 in the absence of the Corporate Debtor, and upon completion of arguments, the order was reserved."

11. When the notice was published by substituted service in the Newspaper

on 08.08.2025 and the Corporate Debtor appeared through counsel on

22.08.2025, the Corporate Debtor shall be presumed to have well aware of

the proceeding. Twice the Counsel for the Corporate Debtor asked for time to

file reply but no reply was filed which is noted by the Adjudicating Authority

in aforesaid paragraphs. The above clearly indicate that despite opportunity

the Corporate Debtor did not file reply, hence, present is not a case of any

violation of principle of natural justice. The Appellant being in custody from

25.10.2025 till 26.11.2025 cannot be any ground for alleging violation of

principle of natural justice when on 22.08.2025, Counsel for the Corporate

Debtor has appeared and prayed for time to file reply. We thus, are satisfied Company Appeal (AT) (Insolvency) No. 320 of 2026 10

that ample opportunity was given to the Corporate Debtor to file reply which

was not availed of.

12. The disbursement of the loan is not even denied. The default on the part

of the Corporate Debtor is writ large which is clearly reflected from various

restructuring and OTS proposals submitted by the Corporate Debtor. When

Corporate Debtor had submitted various OTS proposals, it is a clear

acknowledgment of debt. The findings recorded by the Adjudicating Authority

of debt and default, thus, are fully supported by relevant materials on the

record in which no error can be found.

13. In view of the foregoing discussions, we are of the view that the

Adjudicating Authority on materials on record having found debt and default

has admitted Section 7 application. No grounds have been made out to

interfere with the order impugned. The Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Indevar Pandey] Member (Technical) New Delhi

Anjali

Company Appeal (AT) (Insolvency) No. 320 of 2026