Gurushankar Raman vs City Union Bank Limited And Anr

[Arising out of the Impugned Order dated 27.09.2023 passed by the National Company Law Tribunal, Division Bench (Special) Court No. I Kolkata in C.P.(IB) No. 329(KB)2022]

In the matter of:

Gurushankar Raman Suspended Director and Shareholder of M/s. Amritpur Tea Company Limited Gate No. 5 Old No. 16 A & C, New No. 18 A & C, Director's Colony, Kodambakkam, Chennai-600024. ... Appellant Versus

1. City Union Bank Limited (Financial Creditor) 149, T.S.R. Big Street, Kumbakonam, Tanjore, Tamil Nadu-612001.

2. Amritapur Tea Company Ltd. Through its Insolvency Resolution Professional, Mr. Soumitra Lahiri Address: Flat 14 D & E, Tower 32, Genexxy Valley, Joka, Diamond Harbour Road, Kolkata, West Bengal-700104. Also at: Raipur Tea Estate, Post Office- Rangdhamali, Jalpaiguri, West Bengal 735121. ... Respondents Present: For Appellant : Mr. Gaurav Mitra, Mr. Shantanu Singh, Mr. Ravi Sehgal, Lavanya Pathak, Advocates For Respondents : Mr. Sumesh Dhawan, Ms. Vatsala Kak, Mr. Shaurya Shyam, Mr. Sagar Thakkar, Advocates for R-1. Mr. Vikram Wadehra, Advocate for R-2. 2

JUDGMENT

(Hybrid Mode)

[Per: Ajai Das Mehrotra, Member (Technical)]

This Appeal has been filed by Mr. Gurushankar Raman, Suspended

Director and shareholder of M/s. Amritpur Tea Company Ltd, herein after

referred to as the Appellant/Corporate Debtor against the order dated

27.09.2023 passed by the National Company Law Tribunal, Division Bench

(Special) Court No. I, Kolkata in C.P.(IB) No. 329(KB)2022 wherein application

filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter

referred as IBC, 2016) by City Union Bank Ltd, the Financial Creditor was

allowed admitting the Corporate Debtor in corporate insolvency resolution

process (hereinafter called 'CIRP').

2. Brief facts of this case, as narrated in the Order of learned NCLT, are that

the Corporate Debtor was incorporated on January 10, 1913. The Corporate

Debtor had taken loan from the Financial Creditor and the outstanding amount

as on September 1, 2022 was Rs.12,60,90,830/-. The Corporate Debtor was

declared a non-performing asset (NPA) by the Financial Creditor on December,

31, 2019 as per the record of default mentioned in Form - D of National e-

Governance Services Ltd. (hereinafter called 'NeSL'). The documents relating to

agreement of loan, hypothecation etc. in support of the credit given by the

Financial Creditor to the Corporate Debtor were filed with the learned NCLT. The

learned NCLT admitted the Corporate Debtor in CIRP and appointed Mr.

Soumitra Lahiri as the Interim Resolution Professional.

Company Appeal (AT) (Ins.) No. 1639 of 2023 Page 2 of 9 3

3. In his oral and written submissions, the learned Counsel for the Appellant

submitted that no Notice for hearing was served on the Corporate Debtor and

Corporate Debtor was in the dark regarding the proceedings. The Corporate

Debtor was wrongfully set ex parte by the Adjudicating Authority. It was

submitted that the learned NCLT vide Order dated 13th June, 2023 had directed

service of Notice through two newspaper publications, one in vernacular

language and one in English widely circulated in the State of West Bengal. It was

submitted that the newspaper editions in which the Notice was published were

being published from Kolkata, but not in Siliguri. The learned Counsel for the

Appellant filed Affidavit in support of his contentions that separate editions of

these papers are published from Siliguri which are circulated in Jalpaiguri,

where the registered office of the Corporate Debtor is situated. The learned

Counsel adverted to Rule 35 of NCLT Rules - 2016. The said Rule is reproduced

below for ready reference:-

"35. Advertisement detailing petition.- (1) Where any application, petition or reference is required to be advertised, it shall, unless the Tribunal otherwise orders, or these rules otherwise provide, be advertised in Form NCLT-3A, not less than fourteen days before the date fixed for hearing, at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situate, and at least once in English language in an English newspaper circulating in that district.

(2) Every such advertisement shall state;-

(a) the date on which the application, petition or reference was presented;

Company Appeal (AT) (Ins.) No. 1639 of 2023 Page 3 of 9 4

(b) the name and address of the applicant, petitioner and his authorised representative, if any;

(c) the nature and substance of application, petition or reference;

(d) the date fixed for hearing;

(e) a statement to the effect that any person whose interest is likely to be affected by the proposed petition or who intends either to oppose or support the petition or reference at the hearing shall send a notice of his intention to the concerned Bench and the petitioner or his authorised representative, if any, indicating the nature of interest and grounds of opposition so as to reach him not later than two days previous to the day fixed for hearing.

(3) Where the advertisement is being given by the company, then the same may also be placed on the website of the company, if any.

(4) An affidavit shall be filed to the Tribunal, not less than three days before the date fixed for hearing, stating whether the petition has been advertised in accordance with this rule and whether the notices, if any, have been duly served upon the persons required to be served:

Provided that the affidavit shall be accompanied with such proof of advertisement or of the service, as may be available.

(5) Where the requirements of this rule or the direction of the Tribunal, as regards the advertisement and service of petition, are not complied with, the Tribunal may either dismiss the petition or give such further directions as it thinks fit.

(6) The Tribunal may, if it thinks fit, and upon an application being made by the party, may dispense with any advertisement required to be published under this rule."

Company Appeal (AT) (Ins.) No. 1639 of 2023 Page 4 of 9 5 4. Learned Counsel for the Appellant submitted that since the newspapers

were not being circulated in the District of Jalpaiguri, the substituted service

through publication was not proper. The second defence taken by the Corporate

Debtor is that the loan was disbursed to the Corporate Debtor in three tranches

and the third tranche of Rs.1,50,00,000/- was disbursed on 30th December,

2019 and the bank, on the very next day, i.e. 31st December, 2019 declared the

loan facility as "non-performing asset" (NPA) which on the face of it appears

incorrect as NPA was declared on the very next day of sanction of new tranche

of loan.

5. In his oral and written submissions, the Learned Counsel for the

Respondent No. 1 (Financial Creditor-City Union Bank Ltd.) submitted that the

Corporate Debtor was liable to pay Rs. 12,60,90,830/- as on 01.09.2022 towards

loan disbursed in the period from 27.07.2015 to 30.12.2019, including interest

due thereon. It was submitted that the Appellant repeatedly defaulted and the

loan facility was declared as NPA on 31.12.2019, as instead of regularising the

earlier loan facility it utilised the 3rd facility to make part payment of the previous

loans.

6. The details of the loan disbursed are as under:

Default Amount S. No. Account Number Disbursed Date Of With Interest Amount Disbursement [As On 01.09.2022]

1. 512120020005361 4,00,00,000/- 27.07.2015 5,05,28,894/-

70,00,000/- 30.12.2018 2. 501812080011182 6,00,00,000/- 29.06.2015 3,66,46,975/-

Company Appeal (AT) (Ins.) No. 1639 of 2023 Page 5 of 9 6

3. 501812080059393 1,50,00,000/- 30.12.2019 1,50,02,875/- TOTAL 12,60,90,830/-

7. It was submitted that the Appellant has not denied that it has defaulted

in the payment of dues. There are proceedings against the Corporate Debtor

under SARFAESI Act, 2002 for taking over the symbolic possession of the

secured assets of the Corporate Debtor and even at that stage no dispute was

ever raised by the Corporate Debtor. The Corporate Debtor had not raised any

dispute even before NeSL and the Record of Default i.e., the record maintained

with the Information Utility NeSL, reflects that various intimations were sent

regarding the default through email, which were opened as well as authenticated

by the Corporate Debtor, however, no dispute was ever raised to the existence of

default.

8. It was submitted that Court notice has been duly delivered and served on

the Corporate Debtor through both mode, namely, Speed Post and Email issued

by the Registry of the Ld. NCLT itself and there cannot be any dispute qua the

service of notice of Section 7 petition. It was submitted that the Corporate Debtor

has deliberately not joined the proceedings before the Ld. NCLT, and is making

frivolous attempts to mislead and evade its liability towards the Respondent No.

1. It was submitted that publication in newspaper was in addition to the notice

which was duly served and any frivolous controversy regarding it cannot deny

the fact that service was duly affected, both through Speed Post and Email on

the Corporate Debtor. It was submitted that even during the DRT proceedings

and before this Appellate Tribunal, the Appellant and the Corporate Debtor had

Company Appeal (AT) (Ins.) No. 1639 of 2023 Page 6 of 9 7

failed to say that they are willing to pay the debt, even when specific queries were

raised regarding it.

9. We have heard the Learned Counsels for both the sides and have perused

the documents.

10. In its order dated 28.12.2022, the Ld. NCLT had directed Registry to issue

notice to the Respondents by Speed Post and Email and place tracking

information on record. Further in its order dated 31.01.2023, the Ld. NCLT has

recorded that notice was issued to the Corporate Debtor and has been served

upon them. However, as none had appeared for the Corporate Debtor, the

Registry was directed to issue fresh notice and petitioners were also directed to

take the notice for service and file a service affidavit. Since the Respondent-

Corporate Debtor was not appearing, an I.A. was filed by the Financial Creditor

requesting for permission to publish service of notice through two newspapers

which was allowed on 13th June, 2023 by the Ld. NCLT. The publication was

done in the two newspapers, one in vernacular language and one in English in

dailies widely circulated in the State of West Bengal. An affidavit was filed by the

petitioner before the Ld. NCLT for placing on record the copy of publication made

in two newspapers, namely, "The Statesman" and "Aajkal" for effecting service

upon the Corporate Debtor. Since even after publication, nobody appeared for

the Corporate Debtor, the Corporate Debtor was set ex-parte vide order dated

09.08.2023 by the Ld. NCLT.

11. We have gone through the records and find that service through email

and by Speed Post has been made at the declared address of the Corporate

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Debtor and the relevant documents have been filed, which are at page 502-503

of the Affidavit in Compliance filed on 29.07.2024.

12. We find that NeSL had repeatedly informed the Corporate Debtor about

the outstanding debt and had sent emails at its registered email ID-

raipurte@gmail.com. The said email ID is given in the master data of the

company maintained with the Ministry of Corporate Affairs and evidence of the

same has been submitted at page 20 of reply affidavit by the Respondent No. 1.

The Learned Counsel for the Respondent has also informed that the resolution

plan for the Corporate Debtor has already been approved by the Ld. NCLT vide

its order dated 20.12.2024.

13. We find that at no stage the Corporate Debtor had denied its liability to

pay to the Respondent bank. The feeble argument raised is that the publication

of notice was in Kolkata editions of the newspaper, which are not readily available

in Jalpaiguri, where the registered office of the Corporate Debtor is situated.

However, we find that advance notice of the application has been served on the

Corporate Debtor. Further, the notice issued by the Registry through Speed Post

and Email has been duly served upon the Corporate Debtor. The Corporate

Debtor was admittedly served on earlier occasions and since none appeared on

its behalf, it was only as an abundant caution the service by publication was

ordered. Now the Corporate Debtor cannot say that earlier service was invalid or

withdrawn because of reservice being ordered. We also find that the debt and

default are recorded in the records of the Information Utility (NeSL). The record

of NeSL has been filed along with Affidavit in Compliance filed on 29.07.2024

and is available at page 171 to 177. According to the records submitted, it is

Company Appeal (AT) (Ins.) No. 1639 of 2023 Page 8 of 9 9

reflecting that intimations were sent by NeSL to the Corporate Debtor at its

registered email ID- raipurte@gmail.com on 07.09.2022 at 09:49:16 AM,

07.09.2022 at 09:52:02 AM, 12.09.2022 at 14:14:45 PM, 12.09.2022 at 14:19:59

PM, 17.09.2022 at 18:59:27 PM, 17.09.2022 at 19:02:26 PM, 24.09.2022 at

08:07:20 AM and 24.09.2022 at 08:10:35 AM. All the emails were delivered and

opened by the addressee. However, the debt has been authenticated by NeSL

with the description "default submission" indicating that no response had come

from the Corporate Debtor. Apparently, it is the Corporate Debtor who has

chosen not to join the proceedings. Even during the appeal proceedings, on

query, the Corporate Debtor was unable to commit to the repayment of debt. This

case meets all the ingredients required for admission under Section 7 of the IBC,

2016, including existence of debt, failure to repay the debt leading to default and

application filed under Section 7 within the limitation. We find no reason to

interfere in the orders of Ld. NCLT in admitting the Corporate Debtor under CIRP.

We find no merits in the present appeal, and it is accordingly dismissed. All

pending application(s) are closed. No order as to costs.

[Justice Yogesh Khanna] Member (Judicial)

[Mr. Ajai Das Mehrotra] Member (Technical)

Place: New Delhi Dated: 06.02.2025 Ram N.

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