Nanubhai Nichhbhai Desai vs Omkara Assets Reconstruction Pvt. Ltd. ...
- CitationCompany Appeal (AT) (Insolvency)No.262 of 2019
Ratio decidendi
The rule this decision rests on
A financial creditor's application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is not rendered non-maintainable merely because a consent award exists and an execution proceeding is pending, where the corporate debtor has committed a default in payment of the amount due under the financial debt on the date stated in the application. A contractual remedy of enforcing security or selling the corporate debtor's property under the terms of a consent award does not bar the financial creditor from initiating insolvency proceedings under Section 7 where a default has occurred.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI Company Appeal (AT) (Insolvency)No.262 of 2019 IN THE MATTER OF: Nanubhai Nichhbhai Desai .....Appellant Vs. M/s.Omkara Assets Reconstruction Pvt. Ltd. & Anr. ......Respondents Present : For Respondents: Ms. Pratiksha Sharma with Mr. Ankit Acharya, Advocates
O R D E R
15.04.2019 - The Respondent M/s. Omkara Assets Reconstruction Pvt. Ltd.
filed an application u/s 7 of the Insolvency & Bankruptcy Code ['I&B' Code],
2016 against M/s. Anoushka Hospital Consultancy and Management Services
Pvt. Ltd. ('Corporate Debtor') which having admitted by impugned order dated
15.01.2019 the Appellant, shareholder of the 'Corporate Debtor' has challenged
the order passed by the Adjudicating Authority (National Company Law
Tribunal), Mumbai Bench.
Learned Counsel for the Appellant submits that there was a dispute which
was referred to Arbitration and Consent Award was passed on 12.08.2016 and
the execution case is pending. The Respondent - 'Financial Creditor' in the
meantime has moved the Adjudicating Authority. It is submitted that in view
of pendency of execution case, there is no default as per consented award; and,
therefore, the application u/s 7 was not maintainable.
Company Appeal (AT) (Insolvency)No.262 of 2019 .....contd./ Referring to Clause - 11 of the Award, it is submitted that in case of default
of payment, the Respondent can sell the property of the 'Corporate Debtor',
therefore, instead of filing application u/s 7 of the Insolvency & Bankruptcy Code
('I&B')Code, 2016 it was open to the Respondent to sell the property and to
recover the amount.
However, such submission cannot be accepted as admittedly, the
'Corporate Debtor' committed default on 30.11.2016 in not making payment to
the extent of Rs. 17,81,54,000/- including interest as per amount. For the said
reason, we are not inclined to interfere in the impugned order. In absence of
any merit, the appeal is dismissed. No cost.
[Justice S. J. Mukhopadhaya] Chairperson
[Justice A. I. S. Cheema] Member (Judicial)
[Kanthi Narahari] Member (Technical)
ss/sk
Company Appeal (AT) (Insolvency)No.262 of 2019
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free