Mr. Nitin Chandrakant Desai vs Edelweiss Asset Reconstruction ...

Nitin Chandrakant Desai ...Appellant

Versus

Edelweiss Asset Reconstruction Ltd. & Anr. ...Respondents

Present: For Appellant: Advocate Anju Jain, Advocate Hitesh Sachar For Respondent: Advocate R.P. Agrawal, Advocate Vidhisha Haritwal, For R-1

ORDER

01.08.2023: Heard Learned Counsel for the Appellant. Learned Counsel

for the Respondent is also present.

2. This Appeal has been filed against the Order dated 25th July, 2023 by

which order the Adjudicating Authority has admitted Section 7 Application

filed by the Respondent.

3. Learned Counsel for the Appellant submits the Application was barred

by Section 10A which submission has wrongly been rejected.

4. We have considered the submissions and perused the record.

5. The Adjudicating Authority has considered the submission of Appellant

and dealt with it in paragraph 8:

"The Financial Creditor has successfully proved the existence of "debt" and "default" through the record of default issued by the NESL apart from other security -2-

documents and loan documents. The date of default is mentioned as 31.01.2020 in the NESL Certificate in the record of default and the above Company Petition being filed on 26.07.2022 is well within limitation. Certainly the above date of default does not fall within 10A period and the argument of Corporate Debtor with regard to the default during 10A period needs to be rejected on merits. The Financial Creditor has also suggested the name of Mr. Jitender Kothari as proposed IRP to be appointed in this matter and thus the above Company Petition satisfies all the legal requirements for admission and this Bench did not find any valid reason to dismiss the same."

6. The Adjudicating Authority has noticed and returned a finding that the

default recorded in the NESL is 31.01.2020. The default on 31.01.2020 is

obviously prior to the Section 10 A period. When default has been committed

by the Corporate Debtor prior to Section 10A period, any default committed

during the Section 10A period can not be held to bar the application which is

filed on the basis of default prior to Section 10A and subsequent to Section

10A period.

7. Learned Counsel for the Appellant submits that restructuring was also

permitted on 17.08.2020. The restructuring itself indicated that there has

been default subsequent to Section 10A period i.e. 31st March, 2021 which is

mentioned in paragraph 7.8. The Application which has been filed under

Section 7 gives the detail for Part-IV of the Application which part of the appeal

itself indicate the date of default as 31.01.2020. Learned Counsel for the

Appellant has referred to Page 83 and 84 of the Appeal Paper Book. At page

Company Appeal (AT) (Insolvency) No. 1022/2023 -3-

84, date of default due date has been mentioned as 31st March, 2019 for the

financial year 2018-19. Reading of the Application indicates that default was

committed by the Corporate Debtor prior to Section 10A period.

8. We are satisfied that no error has been committed by the Adjudicating

Authority in admitting Section 7 Application. There is no merit in the Appeal,

the Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Mr. Barun Mitra] Member (Technical)

Basant/nn

Company Appeal (AT) (Insolvency) No. 1022/2023