Hdfc Bank Ltd vs Bhagwan Das Auto Finance Ltd

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI Company Appeal (AT) (Insolvency) No. 1329 of 2019 IN THE MATTER OF: HDFC Bank Ltd. ...Appellant Vs Bhagwan Das Auto Finance Ltd. ...Respondent Present: For Appellant: Mr. Sanjeev Pathak, Advocate. For Respondent: ORDER

09.12.2019: 'HDFC Bank Ltd.' moved application under Section 7 of the

Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency

Resolution Process against 'M/s Bhawan Das Auto Finance Ltd.' (Corporate

Debtor). The Adjudicating Authority (National Company Law Tribunal), Kolkata

Bench, Kolkata dismissed the application under Section 7 being barred by

limitation.

2. Admittedly, the account of 'M/s Bhawan Das Auto Finance Ltd.' was

declared NPA by the Appellant Bank in the year 2010. If it is counted from the

date of NPA, application under Section 7 is barred by limitation.

3. The Appellant has taken plea that there is an Arbitral Award passed by

the Arbitral Tribunal on 31st March, 2017 in favour of the Appellant Bank and

against the Corporate Debtor for a sum of Rs.7,00,88,809.56/- with interest.

4. From the record we find that initially pursuant to an agreement dated

26th September, 2006 one Arbitral Award was passed by the Hon'ble Sole

Arbitrator on 27th January, 2014. Subsequently, another award was passed by

the Hon'ble Sole Arbitrator on 31st March, 2017. Therein apart from the -2-

amount of Rs.7,00,88,809.56/- the Arbitral Tribunal awarded interest @ 18%

from the date of award till date of payment by the Respondent or realization

thereof. Therefore, if the Appellant intends to rely on the award, we hold that

there is no default and thereon application under Section 7 is not

maintainable.

5. From plain reading of the application, we find that the Appellant wants

execution of award. Section 65 of the I&B Code reads as follows:-

"Fraudulent or malicious initiation of proceedings.

65(1) If, any person initiates the insolvency resolution

process or liquidation proceedings fraudulently or with

malicious intent for any purpose other than for the resolution

of insolvency, or liquidation, as the case may be, the

adjudicating authority may impose upon such person a

penalty which shall not be less than one lakh rupees, but

may extend to one core rupees.

(2) If, any person initiates voluntary liquidation proceedings

with the intent to defraud any person, the adjudicating

authority may impose upon such person a penalty which

shall not less than one lakh rupees but may extend to one

crore rupees."

Company Appeal (AT) (Insolvency) No. 1329 of 2019 -3-

6. If it is treated as application under Section 7 for execution of award, in

said case it is to be held that the application was filed with malicious intent not

for purpose of resolution of insolvency or liquidation. However, we are not

giving such finding in case of the Bank and hold that the application under

Section 7 was barred by limitation.

7. For the reasons aforesaid, while we condone the delay of 13 days in

preferring the appeal, dismiss the appeal on merit. I. A. No. 3792 of 2019

stands disposed of.

[Justice S. J. Mukhopadhaya] Chairperson

[Justice Bansi Lal Bhat] Member (Judicial)

[Justice Venugopal M.] Member (Judicial) am/gc

Company Appeal (AT) (Insolvency) No. 1329 of 2019