Mr. Sarang Rakesh Wadhawan vs Punjab And Maharashtra Cooperative ...

Company Appeal (AT) (Ins.) No. 778 of 2022

IN THE MATTER OF: Sarang Kumar Wadhawan ....Appellant

Vs.

Punjab and Maharashtra Co- Operative Bank Ltd. & ....Respondents Anr.

Present: For Appellant: Ms. Disha Shah and Mr. Subir Kumar, Advocates For Respondents: Ms. Amreen, Advocate

ORDER

(Virtual Mode)

20.07.2022: Heard Ld. Counsel for the Appellant.

This Appeal has been filed against the order dated 04.03.2022 passed by

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

on an application under Section 95 filed by the Punjab and Maharashtra Co-

operative Bank Ltd. against the Appellant, the Personal Guarantor.

The Adjudicating Authority by the impugned order has appointed

Resolution Professional and asked for submission of report. The order further

records that interim moratorium under Section 96 1 (a) of the code has

commenced from the date of filing of the application. Appellant aggrieved by the

said order has come up in this appeal.

Ld. Counsel for the Appellant submits that the demand notice was not

served on the Appellant. Hence, the proceedings under Section 95 (1) was not

validly initiated and the Adjudicating Authority committed error in returning a

finding that demand notice was served.

Comp. App. (AT) (Ins.) No. 778 of 2022 Page 1 Ld. Counsel has referred to the Additional Affidavit filed by the Bank with

regard to the service of notice on the Appellant. Ld. Counsel for the Appellant

also submits that he has a right of hearing before the Adjudicating Authority.

We have considered the submissions of Counsel for the Appellant and

perused the record. The Adjudicating Authority with regard to submission on

service of demand notice on the Appellant has made following observations in

para 5:

"The Bench notes that a Demand Notice was issued by the Petitioner, to the Personal Guarantor, Mr. Sarang Rakesh Wadhawan in respect of the unpaid debt due of M/s Punjab and Maharashtra Co-operative Bank Ltd. (Corporate Debtor) under rule 7 (1) of the IBC, 2016 dated 15.11.2021 was issued to the Personal Guarantor claiming total outstanding of Rs. 69,07,10,842/- (Rupees Sixty-Nine Crore Seven Lakhs Ten Thousand Eight Hundred and Forty Two only). The said Demand Notice was served upon the Personal Guarantor via Registered Post on 17.02.2022, which was received by the Personal Guarantor on 18.02.2022. The Applicant has produced proof of evidence that the said notice was delivered to the Personal Guarantor along with computation of the amount of default and other particulars. The Applicant mention that there has been no response from the Respondent side to the demand notice or any payments from the Personal Guarantor, within the period of 14 days stipulated in the Demand Notice."

The Adjudicating Authority itself had passed an order on 01.03.2022,

following is order on page 65:

"Mr. Viraj Parikh, counsel for the Petitioner and Ms. Disha Counsel appearing for the Respondent are present through virtual hearing. Service of notice on the Respondent is completed through the Superintendent of Jail, Arthur Road Jail by Registry.

Counsel appearing for the Petitioner is directed to file additional affidavit along with proof of service of demand notice on the Respondent before the next date of hearing.

List this matter on 04.03.2022."

Comp. App. (AT) (Ins.) No. 778 of 2022 Page 2 In pursuance of the order of the Adjudicating Authority an additional

affidavit of service was filed on behalf of the Bank where following averments

have been made in para 2 & 3:

"2. I say that the Invocation Letter was addressed to the Respondent via Registered Post with Acknowledge Due ("RPAD") on 6 th November 2021, which was received by the Respondent on 8 th November 2021, through the Superintendent of Central Jail at Arthur Road Jail, Sane Guruji Marg, Arthur Road, Saat Rasta, Byculla Mumbai - 400011 where the Respondent is currently residing. The track consignment report of the Invocation Letter obtained from www.indiapost.gov.in is hereto annexed and marked as Exhibit "A".

3. I further say that the Demand Notice was addressed to the Respondent via RPAD on 15th November 2021, which was received by the Respondent on 16 th November 2021 through the Superintendent of Central Jail at Arthur Road Jail, Sane Guruji Marg, Arthur Road, Saat Rasta, Byculla Mumbai - 400011 where the Respondent is currently residing. The track consignment report of the Demand Notice obtained from www.indiapost.gov.in is hereto annexed and marked as „Exhibit "B"."

Ld. Counsel for the Appellant sought to refute the allegations, averments

in para 2 & 3 on the ground that tracking report which was filed along with the

affidavit does not indicate that the item was received at the Superintendent of

Central Jail at Arthur Road Jail, Sane Guruji Marg, Arthur Road. The

Resolution Professional in its affidavit has made categorical statement in para

2 & 3. The Appellant being in judicial custody has to be served through

Superintendent of Central Jail and when averments have been made to above

effects, we see no reason to disbelieve the said averment.

The tracking report on which reliance has made by the Appellant indicate

that delivery of the item was confirmed. The fact that they do not record

delivery of item at Central Jail at Arthur Road does not indicate that the item

Comp. App. (AT) (Ins.) No. 778 of 2022 Page 3 was not taken to Superintendent of Central Jail at Arthur Road which have

received by Jacob circle SOS mentioned in the tacking report.

When items are sent by registered post presumption has to be drawn

about service unless successfully rebutted.

We are of the view that the Affidavit of service has rightly been believed

by the Adjudicating Authority regarding service of demand notice on the

Appellant.

In so far as the submission of the Counsel for the Appellant that he is

entitled to be heard in the proceedings, we notice that the Appellant is

represented by a Counsel and at the time of admission of application under

section 95 (1) i.e. in proceeding under Section 100, at the time of admission

and rejection, the Appellant shall be entitled to raise his objections to the

application.

We are of the view that there are no ground to entertain this Appeal at

this stage. Accordingly, the Appeal is dismissed with the above observations.

[Justice Ashok Bhushan] Chairperson

[Justice M. Satyanarayana Murthy] Member (Judicial)

[Barun Mitra] Member (Technical)

sa/nn

Comp. App. (AT) (Ins.) No. 778 of 2022 Page 4