Kashyap K. Mehta vs Idbi Trusteeship Services Limited And ...

Kashyap K. Mehta ....Appellant Vs. IDBI Trusteeship Services Ltd. and Anr. ...Respondents For Appellant: Mr. Arvind Nayar, Senior Advocate with Mr. Rajan Agarwal, Mr. Ayush Beotra, Mr. Akshay Joshi, Mr. Uddhav Khanna, Mr. Amish Tandon, Advocates. For Respondents: Mr. Rohan Rajadhyaksha, Mr. Siddharth Ranade, Ms. Ritika Ajitsaria, Ms. Samrudhi Chothani, Mr. Prakshal Jain, Advocates for R1.

ORDER

(Through Virtual Mode)

04.03.2022: Heard Shri Arvind Nayar, Learned Senior Counsel for the

Appellant and Shri Rohan Rajadhyaksha, Learned Counsel appearing for the

Respondent. With the consent of the parties, this Appeal is disposed of at the

admission stage.

2. This Appeal has been filed against the order dated 03.08.2021 passed

by the Adjudicating Authority (National Company Law Tribunal), Mumbai

Bench, Court No.5, by which the Adjudicating Authority, on an Application

filed by the Respondents under Section 95 of the Insolvency and Bankruptcy

Code, 2016 ("I&B Code' for short), has passed an order observing that

Resolution Professional shall exercise all powers as enumerated under

Section 99 and he was directed to make the recommendations with reasons

in writing for acceptance or rejection of the Application. 2

3. Learned Counsel for the Appellant contends that the Adjudicating

Authority without there being any report under Section 99 has returned

findings regarding default in paras 13 and 14 of the order which was

uncalled for. It is submitted that the findings regarding default by the

Appellant who is a personal guarantor can be considered only after report is

submitted under Section 99. It is submitted that in view of the said findings,

the Resolution Professional is also handicapped in giving an appropriate

report on the default.

4. Learned Counsel for the Respondents fairly submitted that in the facts

of the present case, since no order has yet been passed for admission or

rejection of the Application, the findings which are recorded in the impugned

order regarding default be set aside and the matter may be remitted to the

Adjudicating Authority for passing an order under Section 100. It is further

submitted that the observations regarding findings of default may be

expunged and Interim Resolution Professional may be asked to submit fresh

report.

5. We have considered the submissions of the Learned Counsel for the

parties and perused the record.

6. This Tribunal in "Kanchan Nanubhai Desai, Personal Guarantor

Anoushka Medicare & Diagnotics Pvt. Ltd. and Ors. Vs. Finquest

Financial Solutions Pvt. Ltd. and Ors.- Company App. (AT) (Ins.) Nos.

1089, 1090 & 1091 of 2021" has already taken the view that at the stage

before passing an order under Section 100, there was no occasion to record

Comp. App. (AT) (Ins.) No. 212 of 2022 3

any finding of default by the Adjudicating Authority. In the said judgment,

also this Tribunal has directed deletion of the observations of the

Adjudicating Authority regarding finding of the default. We are of the view

that the same course is to be followed in the present case also. In view of the

above, we hold that findings recorded regarding default are deleted from the

impugned judgment especially in paras 13 and 14. Let Resolution

Professional may submit a fresh report under Section 99 within two weeks.

The Adjudicating Authority after receiving the report shall take a decision

either admitting or rejecting the Application as contemplated under Section

100 of the I&B Code after hearing the parties.

7. With these observations, the Appeal is disposed of.

[Justice Ashok Bhushan] Chairperson

[Dr. Alok Srivastava] Member (Technical) Anjali/nn

Comp. App. (AT) (Ins.) No. 212 of 2022