Nikita Trehan vs Priviege Healthcare Service Pvt Ltd

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI Comp. App. (AT) (Ins) No. 738 of 2025 & I.A. No. 2818 of 2025 IN THE MATTER OF: Nikita Trehan ...Appellants Versus Privilege Healthcare Services Pvt. Ltd. & Anr. ...Respondents Present: For Appellants : Mr. Ravi Prakash, Sr. Advocate with Mr. Ashish Verma, Mr. Debopriyo Moulik, Ms. Iti Agarwal, Advocates. For Respondents : Mr. Satender K. Rai & Ms. Ruchika Darira, Advcoates for R-1. Ms. Anjali Sharma, Ms. Thanglunkim, Mr. Gaikhuanlung, Advocates for R-2. ORDER

Per: Justice Rakesh Kumar Jain:

04.07.2025: This appeal is against the order dated 18.02.2025 passed by the

NCLT Mumbai Bench by which an application filed under Section 7 of the

Insolvency and Bankruptcy Code, 2016 (in short 'Code'), bearing CP (IB) No.

1902 of 2019 by Union Bank of India against M/s Privilege Health Care

Services Pvt. Ltd. for the resolution of an amount of Rs. 30.19,13,435.20/-as

on 31.03.2019 has been admitted.

2. The brief facts of this care that the Financial Creditor sanctioned a term

loan facility of Rs. 28,00,00,000/- and import/inland LC/buyers credit as

sublimit of Rs. 77,00,000/- to the CD. The CD executed loan and security

documents, namely, agreement of term loan dated 01.11.2013, guarantee

agreement dated 01.11.2013, common deed of hypothecation dated 2

01.11.2013, counter guarantee dated 01.11.2013, inter-se agreement dated

01.11.2013, documents in respect of equitable mortgage and

acknowledgement of debt and liability dated 08.07.2016.

3. According to the FC, the CD failed to follow the terms of the sanctioned

letter and did not make the timely payments, therefore, its account was

classified as NPA on 12.04.2016. The FC had to file an application bearing

O.A No. 471 of 2019 for recovery of the outstanding debts before the DRT.

4. During the pendency of the said proceedings, the CD proposed a

settlement of outstanding debt for an amount of Rs. 30.22 Cr. which was

approved by the FC on 08.01.2018 but the CD failed to pay the same and

proposed to settle the outstanding debt vide its letters dated 18.01.2019 and

05.02.2019 for an amount of Rs. 34.12 Cr. towards full and final settlement

and also paid an amount of Rs. 5 Cr. on 05.02.2019. The FC approved this

OTS also on 07.02.2019 but the CD again failed to pay according to the OTS,

therefore, the FC filed an application under Section 7 on 10.05.2019 for the

initiation of the CIRP.

5. The CD again offered settlement proposal on 23.09.2019 and requested

to settle the debt at an OTS amount of Rs. 23 Cr after deducting payment of

Rs. 2 Cr. made on 16.09.2019 and 23.09.2019, payable in nine months. The

CD in the meantime, was admitted into CIRP on 04.12.2019.

6. The CD approached the FC vide its letter dated 29.04.2020 to consider

the OTS Proposal once again. The OTS proposal dated 07.07.2020 and

12.08.2020 were accepted by the FC and in view thereof, in the 15th CoC

meeting of the CD held on 19.06.2020, it was decided to withdraw the petition 3

filed under Section 7 of the Code in terms of Section 12A of the Code which

was approved by 100% voting share.

7. The RP filed an application bearing I.A No. 1181 of 2020 under Section

12A of the Code. The said application was allowed on 15.09.2020 and the

petition was disposed of as withdrawn.

8. It is alleged that CD had issued post-dated cheques to the FC in terms

of the OTS dated 07.07.2020 and 12.08.2020 and vide letter dated

20.10.2020 once again requested to restructure the repayment schedule,

insisted on replacing old post-dated cheques with new ones as per the revised

time line proposed in the letter dated 20.10.2022.

9. The CD offered to make the payment till February, 2023 but the said

proposal was not considered by the FC for extension of OTS with revised

terms. The cheques dated 07.12.2020, 07.01.2021 and 07.02.2021 were

dishonoured due to insufficient funds, therefore, the FC issued legal notice

on 24.02.2021 to the CD. The CD vide letter dated 03.04.2021 requested not

to deposit the cheques on the ground that there was a fire in the hospital

premises because of which the hospital of the CD was not operational.

10. Since the CD failed to abide by the terms and conditions of the

settlement on the basis of which the application filed under Section 7 was

withdrawn by the FC, therefore, the FC filed I.A No. 3663 of 2023 for revival

of the CP on the ground that OTS had failed, therefore, the debt of Rs. 26.51

Cr. being the principal amount alongwith interest is due and payable by the

CD.

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11. The said application was allowed by the Tribunal on 28.06.2024 and

petition filed under Section was restored with following observations:-

"7. We have heard the ld. Counsel on both sides, perused the record and considered the written submissions.

8. The Corporate Debtor has not denied any of the facts stated in the instant company petition. Rather the Corporate Debtor has submitted that despite its efforts to pay the amount as per OTS letters, the Corporate Debtor has failed to repay the same due to financial difficulties.

9. It is an admitted position that the Corporate Debtor was admitted into the Corporate Insolvency Resolution Process (CIRP) vide order dated 04.12.2019 in CP. 1902/ 2019. Thereafter the Company Petition was withdrawn by the Financial Creditor on the strength of the OTS proposals dated 07.07.2020 & 12.08.2020.

10. It is further noted that while accepting the OTS Scheme, the Financial Creditor has mentioned in the acceptance letter dated 07.07.2020 as follows:

"6. In case of delay/ default in payment as per the OTS terms and conditions, the concession/ OTS sanctioned shall stand withdrawn/ cancelled automatically and the Bank will be entitled to recover the entire dues with up to date interest. The Bank shall be free to initiate all recovery steps including but not limited to legal remedies/ NCLT routes."

11. In view of the facts and circumstances of the present case, it is a fit case for restoration of C.P. No. 1902/ MB/2019 which is hereby restored to the file of this Court."

12. Since, the debt and default was admitted by the CD because it had

entered into a settlement to pay the amount paid, therefore, the Tribunal

admitted the application filed under Section 7 of the code while giving

reference to a decision of this court in the case of Tejas Khandhar Vs. Bank

of Baroda, CA (AT) (Ins) No. 371 of 2020 in which it has been held that OTS

proposal amounts to acknowledgement of debt and another judgment of this 5

Court in the case of Krishan Kumar Mittal Vs. GRJ Distributors & Developers

Pvt. Ltd. , CA (AT) (Ins) No. 579 of 2019 was referred to in which it has been

held that restoration can be allowed in terms of Rule 11 of the NCLAT Rules

coupled with the fact that the application bearing I.A No. 3663 of 2023 which

was allowed by the order dated 28.06.2020 was not challenged by the CD. It

has also been noted that there was no appeal filed to the order of restoration

dated 28.06.2024.

13. While assailing the validity of the impugned order by which the

application under Section 7 has been admitted and Shreyansh Jain is

appointed as IRP besides imposing the mortarium, it is contended that the

Adjudicating Authority had no power to restore the petition without there

being revival clause.

14. We have heard Counsel for the Appellant in detail and perused the

record with their able assistance.

15. In our opinion, it is classic case of fraud played by the CD upon the FC

when it made the financial creditor believe that it is ready and willing to settle

the dispute on a particular amount which was accepted by the FC and filed

the application under Section 12A of the Code for withdrawal of the petition

but once the petition was withdrawn, the post-dated cheques given by the CD

were all bounced because of the insufficient funds and the settlement fell flat

on the ground. The conduct of the CD in the past was the same when repeated

opportunities were given to it to make the payment of the dues of the Bank/FC

by accepting the OTS Scheme but the amount involved was never paid by the

CD which is enough to show that it never had any intention to pay its debts 6

despite the fact that repeated opportunities were given and at one point of

time even the application filed under Section 7 was allowed to be withdrawn

on the misrepresentation of the CD that it will pay of all its debts. We do not

appreciate the conduct of the CD at all.

16. In so far as the admission of the application is concerned, it is suffice

to mention that the CD has not denied its liability (debt) and default

committed by it in non-payment of amount due because of which

opportunities were given to the CD to make the payment by way of OTS

despite the fact that the account of the CD was classified as NPA as far back

as on 12.04.2016.

17. Thus, in view of the aforesaid facts and circumstances, once the debt

and default are proved beyond any doubt, the application filed under Section

7 has rightly been admitted by the Tribunal.

18. We do not find any error in the impugned order. The appeal is found to

be totally without any merit and the same is hereby dismissed though without

any order as to costs.

I.As, if any, are hereby closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical) Sheetal