Mascot Capital And Marketing Private ... vs Savair Energy Limited

Comp. App. (AT) (Ins) No. 1737 of 2024 & I.A. No. 7989 of 2024 & 485 of 2025 IN THE MATTER OF: Mascot Capital and Marketing Pvt. Ltd. (MCMPL) ...Appellant

Versus

Savair Energy Ltd. (SEL) ...Respondent

Present: For Appellant : Mr. Deepin Deepak Sahni, Varun Khetwani, Ananya Arora, Shreya Gupta, Vishal Navale, Adv. For Respondent : None

ORDER

(Virtual Mode)

Per: Justice Rakesh Kumar Jain; (Oral)

09.09.2025: This appeal is directed against the order dated 02.07.2024

by which an application filed by the Appellant under Section 7 of the Code

bearing RCP (IB) No. 10/MB/2023 connected to CP (IB) No. 4426/MB-

IV/2019 has been dismissed for non-prosecution.

2. Brief facts of this case are that the Appellant filed an application under

Section 7 of the code against the Corporate Debtor, namely, Savair Energy

Ltd. for the resolution of its debt of Rs. 3,70,00,000/-.

3. The application was initially dismissed by the Tribunal vide its order

dated 20.01.2023 observing that "i) From the perusal of the above definition,

it is clear that the transaction of Investment under a Joint Venture

arrangement does not qualify as a financial debt under Sec. 5(8) of the Code.

Nonetheless, even if it is admitted that this transaction took the character of

loan in terms of MOU dated 29th April, 2017 as pleaded by the Financial Creditor, the same does not bind the Corporate Debtor in view of Mr. Saji

Antony undertaking to pay the said amount in his personal capacity."

4. The said order dated 20.01.2023 was challenged by the Appellant before

this Court bearing CA (AT) (Ins) No. 309 of 2023. The said appeal was allowed

vide order dated 27.09.2023. This court while allowing the appeal made the

following observations : -

11. We have heard the Learned Counsel for the Appellant and have perused the records. There is no dispute regarding disbursal of Rs.3.20Crs. from the account of the Financial Creditor to the account of the Corporate Debtor. There is also no dispute that Application under Section 7 of IBC, 2016 was filed within limitation. The AA has erred in relying on the Joint Venture Agreement dated 04.03.2017, which was terminated by consent by both the parties on 29.04.2017 also noting therein that with this termination of MoU, none of the parties are bound by the terms and conditions of the MoU dated 04.03.2017. Even if we assume that payments have come under the Joint Venture, the subsequent two Agreements dated 29.04.2017 clearly establish that Joint Venture MoU was terminated, and fresh MoU for unsecured loan was executed and that it was mutually agreed by Corporate Debtor and Financial Creditor that they will not be bound by the Joint Venture MoU. The amounts paid by the Financial Creditor to the Corporate Debtor took the character of loan from Financial Creditor to Corporate Debtor. The Board of Directors had duly authorised Mr. Saji Anthony to avail unsecured loan from the Corporate Debtor. The liability to repay the loan primarily vested with the Corporate Debtor. The Corporate Debtor had accepted before the AA that it is not in a position to repay `debt' because of financial distress. The AA ought to have admitted the Application of the Appellant under Section 7 of the IBC, 2016 as there is no dispute about the `debt' or liability of the Corporate Debtor and the Corporate Debtor has admitted that it is defaulting in repayment of `debt' due to its financial condition.

12. Hence, this Appeal is allowed and the Impugned Order of the AA (National Company Law Tribunal, Mumbai Bench - IV) is set aside. We remand the matter back to the AA for consideration of the Application of Financial Creditor under Section 7 of the IBC, 2016. The Appellant is directed to appear before the AA on 12.10.2023 for this purpose.

5. After remand, the application filed under Section 7 was listed before the

Tribunal. The relevant order is dated 07.05.2024 which read as under:-

"1. Mr. Suhas Joshi a/w Mr. Pranav More, Ld. Counsel for the Financial Creditor present. No representation on the part of the Corporate Debtor.

2. At the time of hearing, this Bench noticed that the date of default has not been mentioned in the Part-IV. Counsel seeks some time to clarify for the same.

3. At the request of Counsel, the matter is adjourned to 19.06.2024 for further consideration."

6. The aforesaid order was followed by another order dated 19.06.2024

which is also reproduced as under: -

1. Mr. Pranav Mane i/b Ynz Legal, Ld. Counsel for the Petitioner present. None present for the Respondent.

2. On-going through the daily order sheet, it is seen that on 07.05.2024, this Bench noticed that the date of default has not been mentioned in the Part-IV and Counsel for the Petitioner sought time to clarify the same.

Today, Counsel for the Petitioner present, but he has not given any clarification on the date of default and submits that the arguing Counsel is not available today due to medical emergency and seeks adjournment. Final opportunity is granted to the Petitioner, failing which the matter will be dismissed for non-prosecution on the next date of hearing.

3. List this matter for further consideration on 02.07.2024.

7. Thereafter, the impugned order came to be passed on 02.07.2024. The

operative part of the said order is captured in para 5 to 7 which are

reproduced as under:-

8. Aggrieved against the order dated 02.07.2024, the present appeal has

been preferred under Section 61 of the Code.

9. Notice in the appeal was issued on 24.09.2024. The Respondent was

proceeded against ex-parte by an order of this Court on 25.03.2025 which is

reproduced as under;-

"25.03.2025: The sole respondent was ordered to be served by way of substituted service. The substituted service has been effected by way of publication and the affidavit in this regard has been filed. We have loudly called out the case for the respondent to appear but no one has put in appearance, therefore, the respondent is proceeded against ex-parte.

List this appeal for ex-parte arguments on 28.04.2025."

10. Counsel for the Appellant while arguing the ex-parte appeal has

submitted that the Appellant had prepared an affidavit dated 06.06.2024 of

Arvind Laxminarayan Kamath aged about 55 years in which the date of

default was mentioned as 29.07.2017 but the said affidavit could not be filed

before the Court due to circumstances beyond the control of the appellant as

the Counsel was not available due to medical emergency. The said affidavit is

also reproduced as under:-

11. It is further submitted that in the order passed by this Court in its

appeal it has been categorically held that "the CD had accepted before the AA

that it is not in a position to repay debt because of financial distress" which means that the debt is not in dispute. It is submitted that this Court further

observed that "the CD had admitted that that it is defaulting in repayment of

debt due to its financial condition" which means that default is also not in

dispute. It is submitted that once the debt and default has been proved having

been admitted by Respondent, the date of default looses its significance which

is otherwise mentioned by the Appellant in para 7 of the affidavit mentioned

herein before which could not be placed on record before the Court below

because of the non-availability of his lawyer.

12. We have heard Counsel for the Appellant and after examining the record

are of the considered opinion that the Tribunal while dismissing the

application has only referred to two orders dated 07.05.2024 and 19.06.2024

and has not taken into consideration the order passed by this Court in appeal

on 27.09.2023 in which this Court has held that the CD had admitted its debt

which could not be paid because of financial distress and also admitted that

it has defaulted in repayment of debt due to its financial condition.

13. Thus, in view of the fact that the debt and default has already been

established as the order dated 27.09.2023 was not further challenged by the

CD by way of an appeal before the Hon'ble Supreme Court which is appealable

to it under Section 62 of the Code, therefore, dismissal of the application

under Section 7 by the Tribunal only on the ground that the date of default

29.07.2017 is not mentioned is in consequential.

14. With these observations, the present appeal is found meritorious and

the same is allowed and the impugned order is set aside. The matter is

remanded back to the Tribunal to decide the application filed under Section

7 of the Code in accordance with law. No costs.

15. The parties are directed to appear before the Court on 15th October,

2025.

I.As, if any, pending are hereby closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Md. Faiz Alam Khan] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

Sc/RR