Eurotherm Hema Radiators India Ltd vs Phl Fininvest Private Limited

IN THE MATTER OF: Kay Jay Leasing Ltd. ...Appellant

Versus Piramal Enterprises Ltd. ...Respondent (Formerly PHL Fininvest Pvt. Ltd.)

Present: For Appellant: Mr. Vikas Dutta, Mr. Siddharth Silwal, Ms. Shivani Sharma, Advocates. For Respondent: Mr. Krishnendu Datta, Sr. Advocate, Mr. Nikhil Mehndiratta, Mr. Agastya Sen, Advocates.

With

Company Appeal (AT) (Ins) No. 177 & 178 of 2024 & I.A. No. 570, 571, 572, 573, 574, 2605, 2606 of 2024

IN THE MATTER OF: Eurotherm Hema Radiators India Ltd. ...Appellant

Versus Piramal Enterprises Ltd. ...Respondent (Formerly PHL Fininvest Pvt. Ltd.)

Present: For Appellant: Mr. Vikas Dutta, Mr. Siddharth Silwal, Ms. Shivani Sharma, Advocates. For Respondent: Mr. Krishnendu Datta, Sr. Advocate, Mr. Nikhil Mehndiratta, Mr. Agastya Sen, Advocates.

Company Appeal (AT) (Ins) No. 175 & 176 and 177 & 178 of 2024 -2-

ORDER

(Hybrid Mode)

Per: Justice Rakesh Kumar Jain (Oral)

26.07.2024: This order shall dispose of two appeals bearing

Company Appeal (AT) (Ins) No. 175 & 176 of 2024 titled as 'Kay Jay

Leasing Ltd. Vs. Piramal Enterprises Ltd. (hereinafter referred to the 1st

appeal) and Company Appeal (AT) (Ins) No. 177 & 178 of 2024 titled as

'Eurotherm Hema Radiators India Ltd. Vs. Piramal Enterprises Ltd.'

(hereinafter referred to the 2nd appeal). Both the appeals have arisen from

the order dated 05.12.2023, dismissing the application filed by the

appellant under Section 7 of the Insolvency & Bankruptcy Code, 2016

('Code') on the ground that the date and default falls within the period

prescribed therein and dismissed the application of the Corporate

Guarantor and allowed the application of the Corporate Debtor seeking

amendment of the date of default.

2. Shorn of unnecessary details, application under Section 7 of the

Code was filed by Piramal Enterprises Ltd. against Kay Jay Leasing Ltd.

bearing C.P. (I.B) No. 359/ND/2021 (herein after referred to as the 1st

appeal) and Piramal Enterprises Ltd. filed an application under section 7

Company Appeal (AT) (Ins) No. 175 & 176 and 177 & 178 of 2024 -3-

bearing C.P. (I.B) No. 335/ND/2021 against Eurotherm Hema Radiators

India Ltd.

3. In both the applications, the respondent herein mentioned that the

default commenced w.e.f 30.09.2020 and it continued. It was mentioned

that the amount in default is Rs.443,36,21,727/-. The demand letter was

sent on 24.02.2021 in both the cases.

4. It is pertinent to mention that the main Corporate Debtor, namely,

Hema Engineering Industries Ltd. is already into insolvency w.e.f

05.04.2021 and now it is in liquidation.

5. The appellant filed an application bearing I.A. No. 1452 of 2023 on

13.03.2023 for dismissal of the application filed under Section 7, inter

alia, on the ground that the date of default was within the period

prescribed under Section 10A of the Code.

6. At the same time, the respondent filed an application bearing I.A.

No. 1547 of 2023 on 15.03.2023 seeking amendment in Part-IV of the

application filed under Section 7, much less the date of default alleging

that the date of default shall be read as 05.04.2021 in view of Clause 14

(e) of the loan agreement as it has to correlate with the insolvency of the

principal borrower.

Company Appeal (AT) (Ins) No. 175 & 176 and 177 & 178 of 2024 -4-

7. In the second appeal, the appellant filed an application bearing I.A.

No. 1447 of 2023 for dismissal of the application filed under Section 7 on

the same ground that the date of default falls within the period

prescribed under Section 10A of the code whereas an application bearing

I.A. No. 1503 of 2023 was filed by the respondent for seeking amendment

in CP (IB) No. 335/ND/2021 for an order to change the date of default.

8. However, in the second appeal the application bearing I.A. No.1503

of 2023 was dismissed on 21.03.2023 not only for non-appearance of the

appellant but also on merit.

9. In the second appeal another application no. 1673 of 2023 was

filed on 21.03.2023 which has now been allowed by the impugned order.

10. Counsels for the appellant has vehemently argued that the Ld.

Tribunal while dismissing the application of the appellant has not

referred to the arguments and the law relied upon in his favour and only

discussed the argument of the respondent as well as the Judgment relied

upon by them and thus committed a patent error as it is against the

principle of natural justice as the order is non-speaking.

11. While arguing before us, counsel for the appellant has referred to

various documents on record, namely, deed of guarantee, invocation of

Company Appeal (AT) (Ins) No. 175 & 176 and 177 & 178 of 2024 -5-

the Corporate guarantee, demand notice etc. and also various judgments

in support of his submissions which are conspicuous by its absence in

the findings recorded by the Tribunal in the impugned order. He has

thus submitted that the Tribunal has not applied its mind to the

contention raised by the appellant and thus the order is non-speaking.

12. Counsel appearing on behalf of the respondent could not deny this

fact because it is apparent from the finding recorded in the impugned

order.

13. In such circumstances, we are of the unanimous view that this is

one case in which the impugned order deserves to be set aside and the

matter deserves to be remanded back to the Tribunal who is seized of the

matter to decide it again after taking into consideration the pleadings as

well as the entire evidence brought on record along with the law relied

upon by both the parties and then pass a considered order.

14. At this stage, counsel for the appellant has pointed out that

arguments in the main application filed under Section 7 has already

been heard and the order is likely to be pronounced at any time. It was

submitted that until and unless a direction is issued by this court to the

Tribunal to keep the order in abeyance which is to be passed on the

Company Appeal (AT) (Ins) No. 175 & 176 and 177 & 178 of 2024 -6-

application under Section 7, the remand of this case shall be

meaningless.

15. The submissions made by the appellant is logical, therefore, while

setting aside the impugned order in both the cases, remanding the

matter back while restoring the applications filed by both the parties

which has been disposed of by the impugned order, we direct the Ld.

Tribunal, seized of this matter, not to pronounce the order before the

aforesaid four applications are deciding in accordance with law, after

affording opportunity of hearing to both the parties, and by passing a

speaking order. The parties are directed to appear before the Tribunal on

the date which is already fixed i.e. 07.08.2024.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

[Mr. Indevar Pandey] Member (Technical)

sa/rr

Company Appeal (AT) (Ins) No. 175 & 176 and 177 & 178 of 2024