Mr. Raja Som Sehrawat vs Optiemus Infracom Limited

[Arising out of order dated 10.11.2023 passed by the National Company Law Tribunal, New Delhi Bench, Court-V in Company Petition No. (IB)- 229(ND)/2022]

IN THE MATTER OF:

Mr. Raja Som Sehrawat ...Appellant S/o Hanmat Singh Sehrawat H. No. 42, DDA House Kothi, Opposite Vandana International Sector-10, Dwarka, New Delhi-110075

Versus

Optiemus Infracom Limited ...Respondent Regd. Office: K-20, 2nd Floor, Lajpat Nagar-II, New Delhi. Also at: D-348, Sector-63, Noida, UP-201307

Present: For Appellant : Mr. Peeyoosh Kalra, Mr Yashwant Singh Baghel, Advocates.

For Respondents : Ms Gaurika Sood, Mr Nirmit Jadwani, Advocates.

JUDGMENT

(Hybrid Mode)

[Per: Ajai Das Mehrotra, Member (Technical)]

This appeal has been filed by Raja Som Sehrawat (hereinafter referred

to as the "Appellant") challenging the order of Ld. National Company Law

Tribunal, New Delhi, Court-V, dated 10.11.2023 in Company Petition No. (IB)-

229(ND)/2022 whereby the application filed under Section 7 of Insolvency 2

and Bankruptcy Code, 2016 (hereinafter referred to as "IBC, 2016")

requesting for initiating Corporate Insolvency Resolution Process (hereinafter

referred to as "CIRP") against Optiemus Infracom Limited (hereinafter referred

to as "Corporate Debtor") was dismissed by the Adjudicating Authority.

2. This is the second round of litigation relating to the said application

filed under Section 7 of IBC, 2016. Initially, vide order dated 28.07.2022, the

application under Section 7 of IBC, 2016 was rejected on the grounds that

cheque for the financial debt was in the name of Sehrawat Associates Private

Limited, who is not the Corporate Debtor. The said order dated 28.07.2022

was set aside by this Tribunal on 31.01.2023 with the following directions:

"5. In view of the fact that the Adjudicating Authority has rejected the Application on mis-reading the bank statement, we in the interest of justice, direct that the Application may be revived before the Adjudicating Authority for consideration in accordance with law.

6. In view of the above, order dated 28.07.2022 is set aside. Company Petition No. (IB) - 229(ND)/2022 is revived before the Adjudicating Authority to be heard and decided in accordance with law. We are not expressing any opinion on merit of the case on either of the parties. The appeal is allowed to the above extent."

3. Subsequently, the Ld. NCLT, vide impugned order dated 10.11.2023

dismissed the application under Section 7 of the IBC, 2016. The relevant

portion of the order is reproduced bellow:

"Analysis and Findings:

18. We have heard the submissions of both the parties and have perused the documents placed on record. The Respondent has objected to the Application mainly on the grounds that no default has been committed by the Respondent and the Application is barred by Section 10A of IBC, 2016.

Company Appeal (AT) (Insolvency) No. 184 of 2024 3

19. Before examining the other aspects we would like to examine whether the present Application is barred by Section 10A of IBC, 2016?

20. From perusal of Part IV of the Application it is observed that the applicant has mentioned date of default as 22.09.2021. However, we have to examine the issue in the light of other material available on record that when the debt became due and payable.

21. The Applicant has stated in the Application that loan was disbursed in the month of July, 2020 and was payable within 3 months. The said fact is also confirmed from the legal notice dated 30.9.2021 in which the Applicant had demanded Rs. 3,30,00,000 from the Respondent within 03 months of disbursement i.e., from 22.07.2020. It is further noticed that the Applicant had mentioned in the legal notice (annexed at Page 33) that the debt had became due and payable from 22.10.2020.

22. As narrated by the Applicant that the loan was re-payable within 03 months from the date of disbursement i.e., 22.07.2020 and even the demand notice in respect for the same was made by the Applicant from the Respondent.

23. We further observe that in view of the provisions under Section 10A, in case of a default, which occurred during the period (i.e, Covid period) excluded under Section 10A, no application under Section 7, 9 or 10 could ever be filed. Section 10A of the Code reads as:

"Suspension of initiations of corporate insolvency resolution process.

10A. Notwithstanding anything contained in Sections 7,9 and 10, no application for initiation of corporate insolvency resolution process of a corporate debtor shall be filed, for any default arising on or after 25th March, 2020 for a period of six months or such further period, not exceeding one year from such date, as may be notified in this behalf:

Provided that no application shall ever be filed for initiation of corporate insolvency resolution process of a corporate debtor for the said default occurring during the said period. Explanation. - For the removal of doubts, it is hereby clarified that the provisions of this section shall not apply to any default committed under the said sections before 25th March, 2020."

24. On 24th September, 2020 in exercise of the powers conferred by section 10A of the Insolvency and Bankruptcy Code, 2016(31 of 2016) [as inserted by section 2 of the Insolvency and Bankruptcy Code (Second Amendment) Act, 2020 (17 of 2020)], the Central Government hereby notifies further period of three

Company Appeal (AT) (Insolvency) No. 184 of 2024 4

months from the 25th September, 2020 for the purposes of the said section i.e Section 10A of IBC.

25. Again on 22nd December, 2020 in exercise of the powers conferred by section 10A of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Central government hereby notifies further period of three months from the 25th December, 2020, for the purposes of the said section.

26. The claim of the Applicant that the date of default is 22.09.2021 does not appear to be correct. As explained above, the date of default is 21.10.2020 which is the date relied on by the Applicant in his Legal Notice dated 30.09.2021 annexed at Page 32-33 of the Application, and as stated by the Applicant in the petition that the amount was to be paid by the Corporate Debtor on expiring of 03 months i.e. on 21.10.2020. There is no document to show that the repayment plan was rescheduled.

27. The default has been committed on 21.10.2020 and the said date falls within the Section 10A period (i.e. starting from 25th March 2020 to 24th March 2021), for which no application can ever be filed for initiating CIRP Process. Therefore; present application is not maintainable in terms of bar under section 10A of IBC,2016. It is made clear that we have not examined and commented; upon the other issues raised by the parties.

28. The Application is accordingly, dismissed."

4. In this case, the financial creditor (the Appellant herein) and the

Corporate Debtor (the Respondent herein) have different versions regarding

the same transaction. It is the say of the Appellant that he extended interest-

free loan of Rs. 3,30,00,000/- from his personal bank account, to the

Corporate Debtor on 21.07.2020 vide cheque no. 000029 drawn on Bank of

Baroda, Dwarka, New Delhi, which was credited to the account of the

Corporate Debtor on 22.07.2020 as a loan. It is stated that the said loan

amount was given on request of the Corporate Debtor for a period of 3 months.

It is worthwhile to note that there is no written agreement for the said loan.

5. The Appellant submitted that the time for re-payment of loan was

extended on the request of the Corporate Debtor from time to time. There are

Company Appeal (AT) (Insolvency) No. 184 of 2024 5

no documents regarding the request, or the extension of time limit. On

30.09.2021, demand notice in Form-3 was sent by the Appellant to the

Corporate Debtor, its CMD and director for payment in respect of unpaid

financial debt.

6. In response to the said demand notice, the Corporate Debtor replied

through letter dated 11.10.2021 stating therein as under:

1. At the outset, the Notice dated 30 September 2021 under the Code is a gross abuse of the provisions of the Code and is a malicious attempt to extort amounts from our Client which are neither due nor payable.

2. Your Client is neither a Financial Creditor nor had ever lent INR 3,30,00,000/- to Our Client as alleged. our Client is not the Corporate Debtor of your Client. Therefore, there is neither any question of default, not any obligation of repayment.

3. The payment of INR 3,30,00,000/- vide Chegue No. 000029 dated 21 July 2020 made by your client was towards interest on loan given by our Client to Sehrawat Associates Private Limited also by Telemart Communication India Pvt Ltd (amalgamated into Our Client) to Sparkle Breweries Pvt Ltd.

4. Sehrawat Associates Pvt Ltd. and Sparkle Breweries Pvt Ltd are entities owned, controlled and managed by your client.

5. Telemart Communication India Pvt Ltd had granted a loan of INR 95,00,000/- to Sehrawat Associates Pvt Ltd between 01 April 2009 to 18 January 2010 and the said loan was confirmed by Sehrawat Associates Pvt Ltd from time to time.

6. Our Client had granted loan of INR 50.00,000/- to Sparkle Breweries Pvt Ltd on 28 April 2012.

7. The loan to Sehrawat Associates Pvt Ltd and Sparkle Breweries Pvt Ltd were interest bearing @ 12% per annum quarterly rest and the total outstanding interest as on 21 July 2020 by the said two entities (Sehrawat Associates Pvt Ltd and Sparkle Breweries Pvt Lid) was INR 3,39,000. The said entities are entities of your client. (sic: the actual figure is 3,39,09,369).

8. Telemart Communication India Pvt Ltd merged with Optiemus Infracom Pvt Ltd (Our Client) vide Scheme of Amalgamation sanctioned by the Hon'ble Delhi High Court.

9. As a security for the loan granted by Telemart Communication India Pvt Ltd to Sehrawat Associates Pvt Ltd and our Client to Sparkle Breweries Pvt Ltd, Sehrawat Associates Pvt Ltd Company Appeal (AT) (Insolvency) No. 184 of 2024 6

mortgaged its property in favour of State Bank of India on the loan obtained by Telecare Networks India Private Limited @ 12.75% to 14.5% per annum.

10. In the books of accounts, for the year ending 31 March 2021 has adjusted INR 3,30,00,000/- as its income.

11. The falsehood in the letter dated 30 September 2021 is apparent from the fact there is not a single document annexed to the said Notice. It is improbable that a loan as alleged would have been granted without any documentation and at the end of Financial Year on 31 March 2021 no balance confirmation is obtained.

12. The allegation that the purported loan was due on 22 October 2020 is apparently false as no letter, correspondence or notice has been sent making the alleged demand."

Thus, the version of the Corporate Debtor is that it had granted loan of Rs.

95,00,000/- to Shehrawat Associates Pvt. Ltd. in the period 01.04.2009 to

18.01.2010 and loan of Rs. 50,00,000/- to Sparkle Breweries Pvt. Ltd. on

28.04.2012, and both these concerns are owned, controlled and managed by

the Appellant. It is the say of the Respondent that Rs. 3,30,00,000/- is

interest on these loans and the same has been shown as interest income by

the Respondent in its books of accounts.

7. In reply dated 13.05.2023 filed by the Respondent Corporate Debtor

before the Ld. NCLT it was submitted as under:

i. The petitioner is not a Financial Creditor and has no locus standi to file

the present petition under Section 7 of IBC, 2016.

ii. The petitioner has not filed any single document wherein the purported

transaction was recorded. Mere drawing of cheque does not constitute a

financial debt. In the present case the said purported cheque pertains to re-

payment of interest.

Company Appeal (AT) (Insolvency) No. 184 of 2024 7

iii. The Corporate Debtor is a financially sound company and a profit

making entity.

iv. The Corporate Debtor's equity shares are listed and traded on National

Stock Exchange and Bombay Stock Exchange.

v. The petitioner was convicted for corruption vide judgment dated

27.01.2017 by the Court of Special Judge (P.C. Act) (CBI), New Delhi.

vi. The Corporate Debtor (earlier known as Telemart Communication (I)

Pvt. Ltd.) had granted a loan of INR 95 lacs to Sehrawat Associates Pvt. Ltd.,

an entity controlled and managed by the petitioner.

vii. The said loan was granted from the period 2009 to 2010. In the year

2012, a loan of Rs. 50 lacs was granted to Sparkle Breweries Pvt. Ltd. which

is also owned and controlled by the Petitioner/Appellant herein.

viii. The Sehrawat Associates Pvt. Ltd. and Sparkle Breweries Pvt. Ltd. have

acknowledged the loans on several occasions. The outstanding interest as on

21.07.2022 payable by the said 2 entities was Rs. 3,39,09,369/-.

ix. The amount of Rs. 3,30,00,000/- which is now sought to be alleged as

a loan was actually repayment of interest due and payable by Sehrawat

Associates Pvt. Ltd. and Sparkle Breweries Pvt. Ltd. The said amount was

duly accounted for in the financial statements of the Corporate Debtor as

income.

8. While noting rival claims, the Ld. NCLT, vide order dated 10.11.2023

had dismissed the application under Section 7 of the IBC, 2016, on the

ground that the date of default is 21.10.2020 and the said date falls within

the period excluded as per the provisions of Section 10A. Company Appeal (AT) (Insolvency) No. 184 of 2024 8

9. The Ld. NCLT also noted that they have not examined and commented

upon other issues raised by the parties.

10. It is the claim of the Appellant that date of default does not fall within

the period excluded under Section 10A of IBC, 2016. It is the submissions of

the Appellant that initially the loan was repayable within three months, i.e.

by 20.10.2020. However, on the request of the Corporate Debtor, the

Appellant had agreed from time to time to extend the date of repayment. On

30.09.2021, the Appellant issued a legal notice to the Corporate Debtor

demanding payment of the unpaid financial debt. In the Form-1, Part-IV filed

with the application under Section 7 of the IBC, 2016, the date of default

shown by the Appellant is 22.09.2021. It is the submission of the Appellant

that the date of default is beyond the exclusion period prescribed under

Section 10A of the IBC, 2016 and the Ld. NCLT erred in taking the date of

default as falling within the period prescribed under Section 10A of the IBC,

2016.

11. In its reply dated 26.04.2024, the Respondent has firstly re-iterated its

earlier position before the Ld. NCLT that the said amount of Rs. 3,30,00,000/-

is actually payment of interest on loans granted to Sehrawat Associates Pvt.

Ltd. and Sparkle Breweries Pvt. Ltd. by the Respondent. The Respondent

denied that any extension of time was sought from the Appellant. The

Respondent relied on the reply dated 11.10.2021 to the legal notice issued by

the Appellant wherein it had replied that the amount of Rs. 3,30,00,000/- is

the interest due on earlier loans given to Sehrawat Associates Pvt. Ltd. and

Sparkle Breweries Pvt. Ltd.

Company Appeal (AT) (Insolvency) No. 184 of 2024 9

12. During the course of hearing, the Learned Counsel for the Respondent

took us through Form-1, especially, Part-IV, where even as per the case of the

Appellant, the said loan amount was given on 21.07.2020 for a period of 3

months. In the notice dated 30.09.2021 also it is noted that "the date from

which the debt fell due is 22.10.2020" (at page 75 of the Appeal Paper Book).

It is the submission of the Learned Counsel for the Respondent that there is

absolutely no evidence regarding extension of time for repayment of loan to

the Corporate Debtor as there is no written agreement or even correspondence

regarding it. There is no correspondence to indicate that any extension of time

was sought by the Corporate Debtor or was granted by the Appellant

regarding repayment of loan.

13. The Learned Counsel for the Appellant submitted that inadvertent error

in the legal demand notice should not be held against the Appellant and cited

the judgment in the case of "Rajendra Bhai Panchal v. Jay Manak Steels

Through its Sole Proprietor & Anr., (2020) SCC OnLine NCLAT 730. The relevant

para nos. 41 and 42 of the said judgment are reproduced below:

"41. It is to be remembered that a mistake in a "Demand Notice does not necessarily mean that it is defective. If a 'Corporate Debtor' wants to question the validity of the demand it is for it to show that the prejudice was suffered by it as a result of defect.

42. If there is a mistake in the demand but the creditor is clearly owed the statutory minimum figure or more, the fact that the debt is mis stated may not automatically invalidate the demand as per decision Cardiff Preserved Coal & Coke Co. v. Norton, 36 L Ch 451. Further, the Court will take into account whether any injustice was caused to the 'Debtor' and even a grossly overstated statutory demand may not automatically be set aside as per decision Re a Debtor (No 490/SD/1991), (1992) 2 All ER 664 (ChD)."

Company Appeal (AT) (Insolvency) No. 184 of 2024 10

14. Another judgment in the case of Raj Television Network Limited v.

Thaicom Public Company Limited, (2023) SCC OnLine NCLAT 2790 was cited

by the Appellant. The relevant para 19 is reproduced below:

"19. According to the Respondent/Petitioner, an 'inadvertent, error', is neither 'wilful', nor 'wanton', but due to the 'bonafide' mistake, as mentioned supra. If the 'Amendment', is not permitted, 'serious prejudice' and 'irreparable loss', will be caused to the Respondent/Petitioner. Also, the Respondent/Petitioner, is not setting up any 'new cause of action' or new pleadings, hence, 'no prejudice', will be caused to the 'Corporate Debtor'. Therefore, the Respondent/Petitioner, had prayed, for allowing of the 'amendment of Part IV(1)(b) & IV(2) in Form 5' as per Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016."

15. The Learned Counsel for the Appellant submitted that default includes

two components "due" and "payable". Both the components are necessary to

establish default. As per the legal notice, the debt may have fallen due after

three months of extending the loan, but it would have become payable only

on demand. Since, the loan extended was on account of verbal agreement

between the parties, the debt in question was payable on demand, which

demand was made only on 30.09.2021 in writing and the default occurred

after ten days when despite demand the respondent failed to pay the amount.

In this regard the Appellant relied upon the judgment of JC Flowers Asset

Reconstruction Pvt. Ltd. v. Laxmi Oil and Vanaspati Pvt. Ltd. (2024 SCC Online

NCLAT 532) as under:

"49. Thus default takes place when any part or instalment of debt has became "Due and Payable" and not "paid". We consciously note that word is "Due and Payable" and not 'Due' or 'Due and Payable'. This signifies that both events should have happened to establish default."

Company Appeal (AT) (Insolvency) No. 184 of 2024 11

16. We have heard both the sides and have perused the record. In this case

there is serious dispute regarding the nature of receipt of Rs. 3.3 crores by

the Corporate Debtor. The Appellant herein claims its a loan given by him to

the Corporate Debtor, whereas the version of the Corporate Debtor is that the

said amount is repayment of interest due on loans given earlier by the

Corporate Debtor to the companies controlled by the Appellant herein. The

said receipt has been recognised as income by the Corporate Debtor in its

books of accounts. However, since the Ld. NCLT has dismissed the application

under Section 7 of the IBC on the ground that the date of default claimed by

the Appellant is in the exclusion period prescribed under Section 10A of the

IBC, 2016 we restrict our examination at this stage only to the issue as to

whether the date of default falls under the prohibited period prescribed under

Section 10A of the IBC and whether on that ground the application under

Section 7 of the IBC was rightly dismissed by the Ld. NCLT.

17. Admittedly, as per Form 3, especially, Part-IV of the application under

Section 7 of the IBC filed with the Ld. NCLT, the appellant has stated that the

loan amount was given on 21.07.2020 for a period of three months and

accordingly date from which debt fall due is 22.10.2020, reflected at page 75

of the Appeal Paper Book. It is the submission of the appellant he had

extended the due date from time to time for repayment of the said alleged

debt. However, there is no written agreement or correspondence or any other

evidence regarding this. The Corporate Debtor has also denied that he had

made any request for extension of time.

Company Appeal (AT) (Insolvency) No. 184 of 2024 12

18. The appellant had specified the date of default as 22.10.2020, and this

appeal has to proceed on that basis, as held by the Hon'ble Supreme Court in

the case of Ramesh Kymal v. Siemens Gamesa Renewable Power Private

Limited, (2021) 3 SCC 224, wherein in para 11, the Hon'ble Supreme Court

has observed that the date of default given in the notice of demand should be

followed. The relevant paragraph 11 of the said judgment is reproduced below:

"11. Under Section 9(1), the operational creditor may file an application before the adjudicating authority for initiating the corporate insolvency resolution process ("CIRP"), after the expiry of a period of ten days from the date of delivery of the notice (or invoice demanding payment) under sub-section (1) of Section 8, if the operational creditor does not receive payment from the corporate debtor or a notice of the dispute under sub-section (2) of Section 8. The appellant having specified 30-4-2020 as the date of default, this appeal must procced on that basis. It is necessary to make this clear at the outset because an attempt has been made during the course of the submissions by Mr Neeraj Kishan Kaul, learned Senior Counsel appearing on behalf of the appellant, to submit that though the demand notice mentions the date of default as 30-4-2020, the "actual first date of default" was 21-1-2020 when the letter of resignation was tendered and that the "second date of default" was 23-3-2020 when the sixty days' notice period from the letter of resignation submitted by the appellant concluded. This attempt to set back the date of default to either 21-1-2020 or 23-3-2020 is plainly untenable for the reason that it is contrary to the disclosure made by the appellant in the demand notice which has been issued in pursuance of the provisions of Section 8(1) and Section 9 of the IBC. The demand notice triggers further actions which are adopted towards the initiation of the insolvency resolution process."

[Emphasis supplied] Company Appeal (AT) (Insolvency) No. 184 of 2024 13

19. It was further held in the case of Ramesh Kymal v. Siemens Gamesa

Renewable Power Private Limited, (supra) that "Section 10A does not contain

any requirement that the Adjudicating Authority must launch into an enquiry

into whether, and if so to what extent, the financial health of the corporate

Debtor was affected by the onset of the Covid-19 pandemic". The Hon'ble

Supreme Court held in the said case that "the embargo contained in Section

10A must receive a purposive construction which will advance the object which

was sought to be achieved by enacting the provision."

20. In Company Appeal (AT) (Insolvency) No. 1409 of 2024 titled as Samrat

Restaurant v. Brewcrafts Microbrewing Private Limited, it was held by the

coordinate Bench of this Tribunal that "the purpose of Section 10A was to

prevent companies from being pushed into insolvency due to temporary

financial distress caused by the COVID-19 pandemic. The Appellant's

interpretation that subsequent agreements should nullify the protection offered

by Section 10A would undermine the legislative intent and open the door for

Creditors to circumvent the protections offered by law. The Tribunal cannot

accept an interpretation that erodes the protection that Section 10A was

specifically designed to offer."

21. Since the date of default has been identified as 22.10.2020 by the

appellant in the demand notice dated 30.09.2021, the date of default falls

within the exclusion period specified in Section 10A of the IBC, 2016. As per

provision of Section 10A of the IBC, 2016 CIRP cannot be initiated where the

date of default falls in the exclusion period. We find no reasons to interfere

Company Appeal (AT) (Insolvency) No. 184 of 2024 14

with the order of the Ld. NCLT and the appeal is thus dismissed accordingly.

No order as to costs. Pending application(s), if any, are also closed.

[Justice Yogesh Khanna] Member (Judicial)

[Mr. Ajai Das Mehrotra] Member (Technical)

Place: New Delhi Dated: 17.10.2025 Ram N.

Company Appeal (AT) (Insolvency) No. 184 of 2024