Neeraj Jain vs Yes Bank Ltd. & Anr

Neeraj Jain ...Appellant

Vs.

Yes Bank Ltd. & Anr. ...Respondents

Present: For Appellant: - Mr. Darpan Wadhawa, Senior Advocate with Mr. Manik Dongra, Mr. Nikhil Singhvi, Mr. Arjun Syal, Mr. Manpreet Kaur and Mr. Shreyan, Advocates.

For Respondents: - Mr. Anant A. Pavgi and Mr. A. Anand, Advocates for R-2 (IRP).

O R D E R

10.04.2019─ This appeal has been preferred by Mr. Neeraj Jain,

Shareholder of 'M/s. Namo Alloys Pvt. Ltd.'- ('Corporate Debtor') against

the order dated 25th March, 2018 passed by the Adjudicating Authority

(National Company Law Tribunal), Principal Bench, New Delhi, initiating

the 'Corporate Insolvency Resolution Process' against the 'Corporate

Debtor' pursuant to an application under Section 7 of the Insolvency and

Bankruptcy Code, 2016 ("I&B Code" for short).

2. Learned counsel appearing on behalf of the Appellant submits that

the Bank officials fraudulently withdrew the amount from the account of

the 'Corporate Debtor' for which FIR No. 222/2018 has been lodged in

Contd/-......

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Palwal Police Station alleging Applicant Bank's involvement in defrauding

the 'Corporate Debtor'. Pursuant to the said FIR, charge sheet has already

been filed.

3. In view of such development, it is submitted that the application

under Section 7 has been filed after embezzling the amount from the

Bank Accounts of the 'Corporate Debtor'.

4. It is further submitted by the learned Senior Counsel for the

Appellant that there are five 'Financial Creditors' (Banks) but four of them

have not joined with the Respondent Bank and are co-operating with the

'Corporate Debtor' for recovery of amount fraudulently withdrawn from

the account of the 'Corporate Debtor'.

5. It is further submitted by learned counsel for the Appellant that if

the amount of Rs.23 Crores which has been fraudulently withdrawn from

the 'Corporate Debtor' would have remained in the account of the

'Corporate Debtor', the 'Corporate Debtor' would not have failed to pay

the dues of the 'Financial Creditors'. When we asked, it was informed that

in all other Banks also the amount has been withdrawn fraudulently from

the account of the 'Corporate Debtor'. However, it is not made clear as to

why in all Bank accounts of the 'Corporate Debtor' fraudulent

Company Appeal (AT) (Insolvency) No. 323 of 2019 -3-

withdrawals have been made if there is no link of one Bank and other

Bank.

6. In reply, it is informed that actually the Chief Financial Officer of

the 'Corporate Debtor' was involved who duly signed forged cheques and

had withdrawn from the account.

7. Having heard Mr. Darpan Wadhawa, learned Senior Counsel for

the Appellant and Mr. Anant A. Pavgi, learned counsel for the 'Interim

Resolution Professional', we are of the view that an application under

Section 7 being an independent proceeding has nothing to do with the

pendency of the Criminal Case relating to misappropriation of the funds

by the Chief Financial Officer of the 'Corporate Debtor' and the employees

of the Banks. The Bank which is the 'Financial Creditor' is a separate

entity from the Chief Financial Officer of the 'Corporate Debtor' or the

individual employees of the Bank(s), if any, involved. The pendency of the

investigation or trial cannot be a ground to refuse an application under

Section 7 if the application is complete and there is a debt and default.

The 'I&B Code' being a complete Code will prevail over the other Acts and

no person can take advantage of the pendency of the case to stall

Insolvency and Bankruptcy proceeding filed under Section 7.

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8. For the reasons aforesaid, we are not inclined to interfere with the

impugned order. The appeal is accordingly dismissed. No cost.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice A.I.S. Cheema) Member(Judicial)

(Kanthi Narahari) Member(Technical)

AR/g

Company Appeal (AT) (Insolvency) No. 323 of 2019