Joginder Singh Lather vs Au Small Finance Bank Ltd
- CitationCompany Appeal (AT)(Insolvency) No. 375 of 2018
Ratio decidendi
The rule this decision rests on
The Appellate Tribunal has no power, in an appeal against an order admitting a Section 7 application, to adjudicate whether a document produced before the Adjudicating Authority is forged or fabricated; such an allegation is to be raised by an application under Section 65 of the Insolvency and Bankruptcy Code, 2016. A settlement reached between the parties after the impugned admission order does not, without more, furnish a ground for the Appellate Tribunal to set aside an order initiating the Corporate Insolvency Resolution Process where there is no infirmity or illegality in that order and the Tribunal has no power to grant relief on the basis of the settlement; the parties are left to approach an appropriate forum for relief.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Jaginder Singh Lather ...Appellant
Vs
AU Small Finance Bank Ltd. ....Respondent
Present: For Appellant: Mr. Sumesh Dhawan, Ms. Tannya Baranwal and Ms. Geethika Sharma, Advocates.
For Respondent: Mr. H.L. Tiku, Senior Advocate with Mr. Mrityunjay Kumar and Ms. Yashmeet Kaur, Advocates
ORDER
12.09.2018: The present appeal has been preferred by the Appellant, a
shareholder of M/s Prabhu Shanti Real Estate Private Limited ('Corporate
Debtor'), against the order dated 13th June, 2018 passed by the Adjudicating
Authority (National Company Law Tribunal), Principal Bench, New Delhi. By the
impugned order the application under Section 7 of the Insolvency & Bankruptcy
Code, 2016 (henceforth referred to as 'I&B Code') by the Respondent- 'AU Small
Finance Bank Limited' has been admitted, order of moratorium has been passed
and Resolution Professional has been appointed.
The Appellant took to the plea that the application under Section 7
of I&B Code was filed by the Respondent ('Financial Creditor') on the basis of
fabricated document where the name of the 'Corporate Debtor' has been shown
as 'principal borrower'. The Appellant had given the property on mortgage to the
Company Appeal(AT)(Insolvency) No. 375 of 2018 Page 1 of 2 'Financial Creditor'. However, it is accepted that the plea taken by the Appellant
was not raised before the Adjudicating Authority.
In the present appeal this Appellate Tribunal cannot decide issue
such as whether the document produced by a party is forged and fabricated or
not, though it is always open to aggrieved person to file an application under
Section 65 of the I & B Code with such allegation.
Learned Counsel for the Appellant submits that the 'Corporate
Debtor' being the mortgager agreed to settle the matter with the 'Financial
Creditor' and settlement has already been reached on 24th July, 2018.
Though we find that the parties have settled the claim but in
absence of any power vested with this Appellate Tribunal and in absence of any
infirmity or illegality in the impugned order, we cannot set aside the order
initiating of Corporate Insolvency Resolution Process against the 'Corporate
Debtor'. For the said reason, while we are not inclined to grant relief on the basis
of settlement, allow the Appellant or any other party to move before an
appropriate forum for appropriate relief.
Appeal stands disposed of with the aforesaid observation.
[Justice S.J. Mukhopadhaya] Chairperson
[Justice A.I.S. Cheema] (Member (Judicial) Akc/Gc
Company Appeal(AT)(Insolvency) No. 375 of 2018 Page 2 of 2
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