Kamlesh Govind Pansuriya vs Bank Of India

National Company Law Appellate Tribunal, New Delhi Principal Bench COMPANY APPEAL (AT) (Insolvency) No. 08of 2021 (Arising out of Order dated 18.12.2020 passed by National Company Law Tribunal, Ahmedabad Bench, Ahmedabad Court-2 in C.P. (I.B) No.380/NCLT/AHM/2019

IN THE MATTER OF:

KamleshGovindPansuriya Shareholder & Director of M/s. RaghukulCottex& Processing Pvt. Ltd. (Company under CIRP Process) Having his address at Sardar Patel Nagar, Atkot Road, .....Appellant B/h Ganga Bhuvan, Jasdan-360050. (Corporate Debtor) Versus

1.Bank of India Having its office address at High School Road, Near ST Bus Stand Villag: Atkot, Taluka :Jasdan, .....Respondent-1 District : Rajkot-360040. (Financial Creditor)

2. Shalabh Kumar Daga Interim Resolution Professional Reg. No. IBBI/IPA-001/ IP-P00071/2017-18/10157 Of M/s RaghukulCottex& Processing Pvt. Ltd. Having its Office address at: 405, Atlantis Enclave, Opp. Maruti Row House, Nr. SubhashChowkGurukul. .....Respondent-2 Ahmedabad-380052. (Financial Creditor)

Appellant: Mr. Keith Varghese, Advocate.

Respondent: Mr. Aditya Kumar, for R-1. Mr. C. George Thomas, for R-2/ IRP. 2

JUDGEMENT

AnantBijay Singh (J)

1. The Instant Appeal bearing Company Appeal (AT) (Insolvency) No. 08 of

2021 filed on behalf of the Corporate Debtor M/s RaghukulCottex& Processing

Pvt. Ltd. being aggrieved and dissatisfied by the Order dated 18.12.2020 by

National Company Law Tribunal, Ahmedabad Bench, Ahmedabad Court-2 in

C.P. (I.B) No. 380/NCLT/AHM/2019 whereby and where under the Learned

Tribunal on an Application filed on behalf of the Respondent No. 1(Financial

Creditor) under Section 7of the Insolvency and Bankruptcy Code, 2016 read

with Rule 4 of the Insolvency & Bankruptcy Code (Application to the

Adjudicating Authority) Rules, 2016 had passed the following orders. The

Application under Section 7 of the IB Code, was admitted and further

moratorium of sub-Section (2) and (3) and Section 14(1) of the IB Code was

also declared and following orders have passed with following directions.

"(1) Subject to provisions of sub-Section (2) and (3), on the Insolvency Commencement date, the Adjudicating Authority herein declares moratorium for prohibiting all of the following viz;-

(i) The institution of suits or continuation of pending suits or proceeding against the Corporate Debtor including execution of any judgment, decree, or order in any Court of Law, Tribunal, Arbitration Panel or other Authority.

(ii) Transferring, encumbering, alienating, or disposing of by the Corporate Debtor, any of its assets or any legal right or beneficial interest therein;

(iii) Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets

Company Appeal (AT) (Insolvency) No. 08 of 2021 3

and Enforcement of Security Interest Act, 2002 (54 of 2002);

(iv) The recovery of any property by an owner as lessor where such property is occupied by or in the possession of the Corporate Debtor.

(2) The supply of goods and essential services to the Corporate Debtor as may be specified shall not be terminated or suspended or interrupted during the moratorium period. (3) The provisions of sub-section (1) shall, however, not apply to such transactions as may be notified by the Central Government in consultation with any financial section regulator. (4) The order of moratorium shall have effect from the date of receipt of an authenticated copy of this order till the completion of the Corporate Insolvency Resolution Process or until this Bench approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under Section 33, as the case may be."

2. Further, the Adjudicating Authority have also appointed Mr. Shalabh

Kumar Daga having Registration No. IBBI/IPA-001/ IP-P00071/2017-

18/10157 to act as "Interim Resolution Professional" under Section 13(1)(b) of

the IB Code.

3. This Appeal was filed by Appellant on 29.12.2020. The case of Appellant

(Corporate Debtor) in short is as follows:-

(i) That the Appellant who is a director and a shareholder of M/s.

RaghukulCottex& Processing Pvt. Ltd.

(ii) Corporate Debtor/ M/s. RaghukulCottex& Processing Pvt. Ltd. had

availed credit facilities worth Rs. 14,85,00,000/- from Respondent

No. 1/ Bank of India on 31.03.2014.

Company Appeal (AT) (Insolvency) No. 08 of 2021 4

4. The Appellant (Corporate Debtor) wasfailed to pay the defaulted payment

of installment in January 2016 and consequently the account was declared as

Non-Performing Asset on 07.06.2016.

5. The Respondent No. 1 (Financial Creditor) through his Chief Manager

Mr. Raj Kumar Gautam filed an application under Section 7 of „I&B Code‟ read

with Rule 4 of the Insolvency & Bankruptcy Code, National Company Law

Tribunal, Ahmedabad Bench, Ahmedabad Court-2 in C.P. (I.B) No.

380/NCLT/AHM/2019 whereby the Appellant appeared and filed his Reply

Affidavit and after hearing the Adjudicating Authority National Company Law

Tribunal, Ahmedabad Bench, Ahmedabad Court-2 passed the Order dated

18.12.2020 as the Appeal.

6. Submissions on behalf of the Appellant:-

(i) Learned Counsel for the Appellant in his Written Submissions and

also in his Additional Written Submission filed during the course of

arguments submitted that the Respondent Bank has mentioned

the date of default as 07.06.2016. Under Section 7 an Application

was filed by Respondent Bank on 06.06.2019. Further, it was

submitted that the date of default is not pari-material to the date

of NPA declaration.

(ii) It is further submitted that the date of default is when default is

occurred as per the IBC, 2019 and it was submitted in the instant

Company Appeal (AT) (Insolvency) No. 08 of 2021 5

case, the date of default ought to be 28.01.2016 which the bank

has admitted in the DRT proceedings.

(iii) So, based upon these submissions it was submitted that the

application filed by Respondent under Section 7 is barred by

limitation.

(iv) It was further submitted by the Learned Counsel for the Appellant

while referring to Volume-II of the Appeal Paper Book relevant at

Page-266 which is shows that the acknowledgment signed by two

of the Directors dated 19.11.2018, whereby they had acknowledged

the debt. It was submitted that this document was not filed along

with the main application.

(v) It was submitted that no sooner the Appellant was made aware of

this document of acknowledgment on 01.10.2020 he prefers to

lodged a police complaint which is at Page-271 of the Appeal Paper

Book, Volume-IIfor forgery and purported acknowledgement of the

debt under signature of the Directors therein.

(vi) The Appellant immediately on 01.10.2020 preferred a written

police complaint at Page No. 271 of the Appeal Paper Book for

forgery against the purported acknowledgment dated 20.11.2018

disputing his signatures of the Director therein.

(vii) Learned Counsel for the Appellant further submitted that the

Respondent Bank did not file the purported acknowledgement

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dated 20.11.2018 marked at Page No. 264 of the Appeal Paper

Book with its application under Section 7 of the IBC but these

documents were filed at the belated stage of the argument before

the Adjudicating Authority.

(viii) It was submitted by the Learned Counsel for the Appellant relying

upon the Judgment of Hon'ble Supreme Court in

"BabulalVardharjiGurjar Vs Veer GurjarAluminium Industries

Private Limited" 2020 SCC OnLine SC 547 (Page 13) that under

Section 18 of the Limitation Act is not applicable in the IBC

proceedings and the purported acknowledgment dated 20.11.2018

cannot extend the limitation period.

(ix) So, based on these submissions Learned Counsel for the Appellant

submitted that the Impugned Order cannot be sustained of the

limitation and fit to be set aside the Appeal be allowed.

7. Submissions on behalf of the Respondent No. 1

(i) Learned Counsel for the Respondent No. 1 in his Reply Affidavit

and also in his Additional Written Submissions filed during the

course of the argument referred to Para-4 at Page-38 of the Appeal

Paper Book, Volume- I filed under Section 7 of the IBC before the

Adjudicating Authority, where date of default is mentioned on

07.06.2016 total outstanding amount payable was Rs.

23,07,58,224.09/- on 04.06.2019.

Company Appeal (AT) (Insolvency) No. 08 of 2021 7

(ii) An Application under Section 7 was filed by Respondent No. 1 on

06.06.2019. So, it is within the Limitation as it is filed within the

prescribed limitation period of three years as per Article 137 of the

Limitation Act, 1963.

(iii) Learned Counsel for the Respondent No. 1 further submitted that

while relying on the Judgment of the Hon‟ble Supreme Court in the

matter of "Gaurav Hargovindbhai Dave Vs. Asset

Reconstruction Company (India) Ltd." reported in (2019) 10

SCC 572, wherein Hon‟ble Supreme Court held the date of default

is the date of NPA and this view has been further in

Company Appeal (AT) (Insolvency) No. 08 of 2021 8

"BabulalVardharjiGurjar Vs Veer GurjarAluminium Industries

Private Limited" reported in (2019) 15 SCC 209.

(iv) Learned Counsel for the Respondent No. 1 further referred to the

Judgement of the Hon‟ble Supreme Court in "BishalJaiswalVs.

Asset Reconstruction Company (India) Limited" reported in

(2021) 224 CompCas 166. Wherein the Hon‟ble Supreme Court

has held the provision of Section 18 of the Limitation Act is

directed to the proceeding of the IBC.

(v) Learned Counsel for the Respondent referred to Annexure- A3

which is Reply Affidavit filed by the Learned Counsel for the

Appellant before the Adjudicating Authority relevant is at Page - 65

of the Appeal Paper Book, wherein it was categorically stated in

Para-4 stated that the account of Appellant was declared NPA by

the Respondent No. 1 on 07.06.2016. Although, the date of default

which stated by the Applicant bank on 07.06.2016 was denied.

(vi) It was submitted by the Learned Counsel for the Respondent No. 1

in the Judgements of the Hon‟ble Supreme Court in

"BabulalVardharjiGurjar Vs Veer GurjarAluminium Industries

Private Limited" reported in (2019) 15 SCC 209.

"35. Apart from the above and even if it be assumed that the principles relating to acknowledgment as per Section 18 of the Limitation Act are applicable for extension of time for the purpose of the application under Section 7 of the Code, in our view, neither the said provision and principles come in operation in the

Company Appeal (AT) (Insolvency) No. 08 of 2021 9

present case nor do they ensure to the benefit of Respondent No. 12 for the fundamental reason that in the application made before NCLT, Respondent No. 2 specifically stated the date of default as "8-7-2011 being the date of NPA". It remains indisputable that neither has any other date of default been stated in the application nor has any suggestion about any acknowledgment been made. As noticed, even in Part V of the application, Respondent 2 was required to state the particulars of financial debt with documents and evidence on record. In the variety of descriptions which could have been given by the applicant in the said Part V of the application and even in residuary Point 8 therein, nothing was at all stated at any place about the so-called acknowledgment or any other date of default".

(vii) In the instant case also the Learned Adjudicating Authority have

considered the fact that in Part 4 of the application under Section

7 filed by Respondent relevant at Page-38 of the Appeal Paper

Book. Date of default is given as 07.06.2016 provision of section

and the application within time.

(viii) It was further argued that in view of the acknowledgment referred

to Page- 264 of Volume - II of the Appeal Paper Book while relevant

acknowledgment of the debt marked at Page-266, whereby on

19.11.2018 two Directors have acknowledged of the Appellant‟s

Company in the provision of Section 18 of the Limitation will be

acknowledged and there is no question of Limitations and the

application filed by Respondent No. 1 under Section 7 of IBC is

within Limitation which as follows: -

Company Appeal (AT) (Insolvency) No. 08 of 2021 10

Company Appeal (AT) (Insolvency) No. 08 of 2021 11

(ix) Learned Counsel for the Respondent No. 1 further submitted that

so far lodged of a police complaint by the Appellant is concerned in

oral argument and also in his Written Submission and only after

this document was produced before the Adjudicating Authority, the

police complaint was lodged on 01.10.2020 marked at Page 271,

Volume-II of the Appeal Paper Book. A written complaint was

given to Police Sub Inspector at Atkot Police Station, Atkot, Dist.

Rajkot.

(x) It was submitted by Learned Counsel for the Respondent No. 1

that this police complaint was lodged on the legal advice only when

the Respondent No. 1 produced the acknowledgment before the

Adjudicating Authority. So, no reliance could be placed on this

document, which is an afterthought.

(xi) Learned Counsel for the Respondent No. 1 referred to Para-16 & 17

marked at Page- 25 of the Impugned Order, Volume-I of the Appeal

Paper Book which is placed in Volume- I of the Appeal Paper Book

and it wasfurther submitted that the reason given by the Learned

Adjudicating Authority in accordance with law and the Appeal is

devoid of merit and fit to be dismissed.

"16. It is noted that the last date of the transaction in the Bank account is on 27.01.2016 and an Affidavit is filed with a copy of the Acknowledgment

Company Appeal (AT) (Insolvency) No. 08 of 2021 12

of debt dated 20.11.2018 signed by the two directors of the Respondent/ Corporate Debtor. In view of this and in line with the decision of Hon'ble NCLAT in Yogesh Kumar Jaswantlal Thakkar Vs. Indian Overseas Bank, the application filed under section 7 of IB Code filed on 06.06.2019 is within time.

17. In an affidavit filed on 08.10.2020 the respondent- Corporate Debtor has submitted that the additional affidavit filed by the petitioner should not be taken on record at such belated stage and stated the acknowledgment letter signed by Mr. Kamlesh G. Pansuriya is forged and it was never signed by Mr. Kamlesh G. Pansuriya. The petitioner also enclosed a copy of the complaint sent to the police sub- Inspector by Post along with the Affidavit. However, it is noticed that the acknowledgment of the debt is signed by two directors and not one and on the face of it, the signature matches with that of the two directors who have signed the loan documents. Hence, the objections of the respondent are not sustainable".

8. FINDINGS

After hearing Learned Counsel for the Appellant and Learned Counsel for

the Respondent and after perusing the records and including the Written

Submissions and oral arguments advanced on behalf of the parties. We are of

the considered view that following facts are admitted as follows: -

(i) An application under Section 7 of the IBC was filed by Respondent

No. 1/ Financial Creditor, namely, the Bank of India on

04.06.2019. Further, from the perusal of the application Part-4

Volume-I of the Appeal Paper Book marked at Page-38 the date of

default is mentioned as 07.06.2016.

Company Appeal (AT) (Insolvency) No. 08 of 2021 13

(ii) The Appellant in the Reply Affidavit filed before the Adjudicating

Authority Para 4 at Page- 65 of the Appeal Paper Book, Volume- I

has already stated that 07.06.2016 is the date when the account of

the Appellant was declared NPA. And in Para-9 of the Reply

Affidavit marked at Page- 67 of the Appeal Paper Book, they have

admitted that the installment of month of January, 2019 remain

unpaid so the default date started on 30.01.2016.

(iii) Subsequently, through Additional Affidavit filed by the Respondent

No. 1 before the Adjudication Authority at Annexure-A/8 Page-262

of the Appeal Paper Book, Volume-II relevant at Page-266 that

Respondent No. 1 produced the acknowledgment dated 19.11.2018

signed by two of the Directors mentioned herein above. This

acknowledgement shows that two of the Directors have

acknowledged the debt of Sum of Rs. 13,87,48,994.57/-. Although

the Learned Counsel for the Appellant tried to repudiate this

document while stating that soon after this document came into

knowledge after police complaint was lodged marked at Page-271,

Volume-II of the Appeal Paper Book. And this fact has been dealt

with in the Impugned Order passed by the Learned Adjudicating

Authority in Para 16 & 17 and we don‟t find any reason to interfere

in the findings of the Adjudicating Authority.

Company Appeal (AT) (Insolvency) No. 08 of 2021 14

(iv) There is a clear acknowledgment on behalf of two Directors one

who have died subsequently.

9. We are of the view that there is no illegality in the Impugned Judgement

passed by the Adjudicating Authority and Impugned Judgement is hereby

affirmed.

10. Accordingly, there is no merit in this Appeal.

11. And the Appeal is dismissed without costs.

12. Further, the period spent during pendency of this Appeal shall be

excluded from the period of CIRP.

13. The Registry is directed to upload this Judgement on the website of this

Appellate Tribunal.

14. Registry is directed to send a copy of the Judgement to the National

Company Law Tribunal, Ahmedabad Bench.

[Justice AnantBijay Singh] Member (Judicial)

[Ms. ShreeshaMerla] Member (Technical) NEW DELHI 08thJuly, 2021 Sim.

Company Appeal (AT) (Insolvency) No. 08 of 2021