Naval Kumar D Bhoot vs Uco Bank And Anr

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Ins) No. 907 of 2021 IN THE MATTER OF: Navalkumar D Bhoot ...Appellant Vs. UCO Bank & Anr. ...Respondents Present: For Appellant: Mr. Vikas Mehta, Mr. Adith Nair, Advocates For Respondent: None

ORDER

(Through Virtual Mode)

15.11.2021: This Appeal u/s 61 of the 'Insolvency & Bankruptcy Code',

2016 (IBC) has been filed against the order dated 16.09.2021 passed by the

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

Court No. IV by which the application filed by the 'UCO Bank'('Financial

Creditor') has been allowed and consequential order has been passed by the

'Adjudicating Authority'.

2. The application was filed claiming a sum of Rs. 47,44,31,630.68/- which

was the credit facility given to the 'Corporate Debtor' on different dates from 2005

to 2013. The Petitioner has provided details of securities such as hypothecated

assets and fixed assets. The proceedings were initiated against the 'Corporate

Debtor' under the 'SARFAESI Act' 2002 by issuing notice u/s 13(2).

3. The Petitioner has also filed recovery proceedings before the 'Debt Recovery

Tribunal by filing O.A. No. 196 of 2015, the Recovery Certificate was passed in

favour of the Petitioner / Bank on 12th February, 2019. The Petitioner had

initiated proceedings under the 'SARFAESI Act,' 2002 against the 'Corporate

Company Appeal (AT) (Ins) No. 907 of 2021 1 Debtor' and issued notice u/s 13(2) on 27th January, 2015. The Petitioner also

issued recall notice on 27th August, 2018, thereby recalling the outstanding dues

from the 'Corporate Debtor'.

4. The total amount of default as claimed by the Petitioner as on date of

default i.e. 30th September, 2014 is amounting to Rs. 47,44,31,630.68/-.

5. Initially, the reply was filed by the shareholder of the 'Corporate Debtor'

collectively holding 21.72% shares of the 'Corporate Debtor' which was taken on

record. The Adjudicating Authority ultimately passed an order and allowed the

application. The reply filed by the shareholders of the 'Corporate Debtor' was

not taken into consideration.

6. The Adjudicating Authority also noticed that the lawyers who was

appearing for the shareholders represented that he is appearing for the

'Corporate Debtor'.

7. Shri Vikas Mehta, Learned Counsel for the Appellant has contended that

the application was barred by limitation and could not have been entertained by

the 'Adjudicating Authority' as the date of alleged default was 30.09.2014 and

the application before the Adjudicating Authority was filed on 26.08.2019. He

further submitted that the 'Power of Attorney' holder was not competent to file

the application under Section 7.

We have considered the submissions of the Appellant and have perused

the records.

Company Appeal (AT) (Ins) No. 907 of 2021 2

8. In so far as the Learned Counsel for the Appellant's contention that in the

section 7 application the particulars of financial debts (documents, records and

evidence of default under part IV) were mentioned but there was no mention of

the Recovery Certificate, the mention of the Recovery Certificate is clearly

indicated in para 2 of the application at S.No. 2(3) where it is mentioned as

under:-

"Decree/Recovery Certificate in O.A.

No. 196 of 2015 in favour of UCO Bank decided

on 12th February 2019 issuing recovery

certificate against Narendra Solvex Pvt. Ltd.

Hereto annexed and marked as Exhibit 1 is

the copy of the Decree dated 12/02/2019

passed by the Hon'ble Debt Recovery Tribunal,

Nagpur against Respondent/Corporate Debtor

and in favour of Applicants."

9. The Adjudicating Authority had considered the submission on behalf of

the 'Corporate Debtor' with regard to limitation and from the impugned order

para 12 onwards, the Adjudicating Authority had observed that when the

recovery certificate was issued there shall be fresh period of limitation and relied

on the judgement by Hon'ble Supreme Court in Dena Bank(now Bank of

Baroda) Vs. C. Shiv Kumar Reddy & Anr. decided on 04.08.2021 in Civil

Appeal No. 1650 of 2020.

Company Appeal (AT) (Ins) No. 907 of 2021 3

10. The Supreme Court in paragraph 128 has laid down that in the 'Certificate

of Recovery' has been issued in favour of the Appellant Bank and dues are not

paid, Recovery Certificate shall give a fresh cause of action to the Appellant Bank

to institute a petition u/s 7 of IBC to the following effect: -

"128. In the instant case, Rs. 111 lakhs had

been paid towards outstanding interest on 28 th

March, 2014 and the offer of One Time Settlement

was within three years thereafter. In any case,

NCLAT overlooked the fact that a Certificate of

Recovery has been issued in favour of Appellant

Bank on 25th May 2017. The Corporate Debtor did

not pay dues in terms of the Certificate of Recovery.

The Certificate of Recovery in itself gives a fresh

cause of action to the Appellant Bank to institute a

petition under Section 7 of IBC. The petition under

Section 7 IBC was well within three years from 28th

March 2014."

11. The application u/s 7 of the 'I&B' Code was on behalf of the UCO Bank

and particulars of the Appellant are mentioned in part 1 and name of the

authorised person is at S.No. 5 which is to the following effect: -

"Mr. D.D. Sawant, (Chief Manager) having his address

Company Appeal (AT) (Ins) No. 907 of 2021 4 at Mumbai (B 903, Kanakia Arohia, DP Road, Borivali-

East, Mumbai - 400066).

A copy of the power of attorney and a letter

authorising D.D. Sawant, Chief Manager, to sign the

captioned company application is hereto annexed

and marked as 'Exhibit A'.

Mr. DD Sawant was the Chief Manager and copy of the letter authorising

him was annexed along with the application.

12. In the facts of the present case, we are not satisfied with the submissions of

the Appellant that Mr. D.D. Sawant, Chief Manager of the First Respondent Bank

was not authorised to file his application.

13. The last submission of the Learned Counsel for the Appellant is that there

was violation of principles of natural justice, since the Corporate Debtor was not

heard. Learned Counsel relied on the decision of Hon'ble Supreme Court in

M/s Jai Balaji Industries Ltd. Vs. SBI & Ors. (2019) 5 Supreme Court Cases

410 where this Tribunal has set aside the order on the ground that the notice

was not served on the Respondent and service of advance copy was not sufficient.

Coming to the judgement of Jai Balaji, the said judgement of the Supreme Court

has set aside the order of NCLAT on the grounds that notice was not served and

service was not sufficient. Rule 52 of NCLAT Rule, 2016 was referred and relied

on. The said case no bearing in the present case, since the present case is not

Company Appeal (AT) (Ins) No. 907 of 2021 5 of not issuance of notice. Notice was issued to 'Corporate Debtor' who had not

filed the reply due to interse dispute in the matter.

14. With regard to submission that reply was not taken into consideration, it

is sufficient to note that there has been interse dispute between Corporate Debtor

and no reply was filed by Corporate Debtor. The reply representing 21.72% share

was taken on record and the Adjudicating Authority had clearly noticed the reply

representing 21.72%. The Adjudicating Authority had also observed that the

reply could not be treated to be the reply on behalf of the Corporate Debtor. The

above reply do not in any manner, deny the debt and filing of the application

within the limitation prescribed.

15. We do not find any substance in any of the submission of Appellant. There

is no merit in the appeal, the appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Justice Jarat Kumar Jain] Member (Judicial)

[Dr. Ashok Kumar Mishra] Member (Technical) Shashi/nn

Company Appeal (AT) (Ins) No. 907 of 2021 6