Gaurav Hargovindbhai Dave vs Asset Reconstruction Company ...

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI COMPANY APPEAL (AT)(INSOLVENCY) NO.655 OF 2018 (Arising out of Order dated 15.10.2018 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Mumbai in CP 1882/I&BP/NCLT/MAH/2018. In the matter of: Gaurav Hargovindbhai Dave, (Shareholder) Male Age:57 years, A/G/1, Parshwa Padmavati Apartment, Dr. Jivraj Mehta Hospital Road, Vasna,Ahmedabad-380007 Appellant

Versus

1. Asset Reconstruction Company (I) Ltd Acting in its capacity as Trustees of Arcil-AST IV Trust, The Ruby, 10th Floor, 29, Senapati Bapat Marg, Dadar (W), Mumbai -40028

2. Shivam Water Treaters P Ltd, Through IRP, Ms Hema Shah, Purshottam Khandelwal & Co, Chartered Accountants, 216, Madhupura Vyapar Bhawan, Nr. Gunj Bazaar, Madhupura, Ahmedabad-380004 Respondents

Present: For Appellant: Mr. Vishwas K. Shah with Ms Bhavna V. Shah, Ms Aastha Mehta, Mr. Divyang Chandiramani, Advocates.

For Respondents: Mr. Ramji Srinivasan, Senior Advocate with Ms Neha Naik and Ms Sylona Mohapatra, Advocates. Mr. Mudit Sharma, CRP.

JUDGMENT

SUDHANSU JYOTI MUKHOPADHAYA, J.

Asset Reconstruction Company (India) Limited (hereinafter referred to

as 'ARCIL'), Financial Creditor, filed an application under Section 7 of

Company Appeal (AT) (Insolvency) No.655 of 2018 2

Insolvency & Bankruptcy Code, 2016 (IBC) against Shivam Water Treaters

Private Limited (Corporate Debtor), which has been admitted by the

Adjudicating Authority (National Company Law Tribunal), Mumbai Bench,

Mumbai vide order dated 15th October, 2018.

2. Learned counsel appearing on behalf of the appellant submitted that

the Debt Recovery Tribunal, Ahmedabad has already held that the assignment

deed in favour of Respondent, ARCIL (Financial Creditor), was invalid,

therefore, the application under Section 7 of I&B Code was not maintainable.

3. Further according to the counsel for the appellant, the money claim

being barred by limitation, there is no debt payable in the eyes of law and,

therefore, application under Section 7 of the I&B Code was not maintainable.

Learned counsel for the appellant referred to the decision of Debt Recovery

Tribunal, Ahmedabad dated 10.6.2016 passed in SA No.24/2016 under

Section 17 of the Securitisation and reconstruction and Enforcement of

Security Interest Act, 2002 whereby assignment deed dated 28.3.2014 in

favour of Respondent, ARCIL, has been declared to be invalid. Learned

counsel submitted that the Respondent, ARCIL, has moved before the Hon'ble

Gujarat High Court in SCA No.1550 of 2016 but the case has been admitted

without any order of stay.

4. Further it was stated that the deed of assignment dated 28.3.2014 was

assigned prior to Board Resolution which was taken in July, 2014, and

assignment deed having inked without power and without authority being

also insufficiently stamped was declared to be invalid. Reliance has been

placed on the decision of the Hon'ble Supreme Court in the case of B.K.

Educational Services Private Limited Vs. Parag Gupta and Associates

Company Appeal (AT) (Insolvency) No.655 of 2018 3

to suggest that the Limitation Act is applicable to applications filed under

Sections 7 and 9 of the I&B Code from the inception of the Code, Article 137

of the Limitation Act gets attracted.

5. Learned counsel appearing on behalf of the Respondent, ARCIL

submitted that there is no denial of debt and default by Corporate Debtor or

the appellant. It is submitted that the order passed by the Debt Recovery

Tribunal, Ahmedabad as relied by the appellant has already been set aside

and quashed by the Hon'ble Gujarat High Court which fact has been

suppressed by the appellant. It was further submitted that for the purpose of

assignment there is no requirement of Board Resolution. The Power of

Attorney of the relevant officer of ARCIL is on record filed with the petition. In

so far debt is concerned it was submitted that the debt is not barred by

limitation as the Corporate Debtor offered three settlement proposals to

ARCIL dated 24.2.2015, 29.4.2015 and 26.6.2015 to clear the debts. Further

it has been brought to our notice that the petition under Section 7 was filed

by ARCIL in October, 2017. This Appellate Tribunal in the case of Pushpa

Shah & Anr Vs IL&FS Financial Services & Anr in Company Appeal (AT)

No.521 of 2018 dealt with the provisions of Article 137 of Part II of the

'Limitation Act' 1963 which reads as follows:

Part II-Other Applications

Description of application Period of limitation Time from which Period begins to run

137. Any other application Three years When the right to For which no period of apply accrues Limitation is provided Elsewhere in this Division.

Company Appeal (AT) (Insolvency) No.655 of 2018 4

In the said case the Appellate Tribunal has held that I&B Code having come

into force on 1st December, 2016, the right to file application under Section

7 accrues on or after 1st December, 2016 and therefore, the application under

Section 7 cannot be held to be barred by limitation.

6. The question whether the claim is barred by limitation to see that there

is no debt payable in law, we hold that the claim of ARCIL is not barred by

limitation, as the assignment deed was made in favour of ARCIL on 28.3.2014

which was declared invalid by DRT, Ahmedabad by an order dated 10.6.2016

and thereafter having revived pursuant to Hon'ble Gujarat High Court order.

Apart from the above fact, we find that the Corporate Debtor offered three

settlement proposals for payment of debt on 24.2.2015, 29.4.2015 and

26.6.2015 to ARCIL.

7. In view of the aforesaid finding no relief can be granted to the appellant.

The appeal is accordingly dismissed. No order as to costs.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice Bansi Lal Bhat) Member (Judicial) Dated: 02-5-2019

New Delhi

Bm

Company Appeal (AT) (Insolvency) No.655 of 2018