Nishit Sharma vs Jana Small Finance Bank Limited

IN THE MATTER OF: Nishit Sharma ...Appellant

Versus

Jana Small Finance Bank & Anr. ...Respondents

Present: For Appellant: Mr. Mohit Chaddha, Advocate. For Respondents: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Kaustubh Prakash, Ms. Prachi Bhatia, Mr. Rishabh Chandra, Advocates for R-1. Mr. Darshit Dave, Advocate with Mr. Divyesh Desai, IRP for R-2.

ORDER

(Hybrid Mode)

20.05.2025: Heard learned counsel for the Appellant as well as learned

counsel appearing for the Respondent. This Appeal has been filed against

order dated 24.04.2025 by which Section 7 application filed by the Financial

Creditor - Respondent No.1 has been admitted. The financial facilities were

extended to the Corporate Debtor - Brandscale Innovations Pvt. Ltd. Default

being committed in making repayment, the Financial Creditor declared the

account NPA and initiated proceeding for Principal Amount of Rs.11,07,23,

633/- plus interest. Corporate Debtor appeared and objected to the Section

7 application and the Adjudicating Authority by the impugned order finding

debt and default has admitted the application.

2. When the Appeal was taken by this Tribunal, Appellant sought

adjournment to approach the Financial Creditor for settlement. Learned

Cont'd.../ 2

counsel for the Respondent submits that no settlement with the Financial

Creditor has yet been achieved.

3. Learned counsel for the Appellant challenging the order submits that

in view of the judgment of Hon'ble Supreme Court in "Vidarbha Industries

Power Ltd. vs. Axis Bank Ltd., (2022) 8 SCC 352", the Adjudicating

Authority has discretion to admit the application and the discretion has to be

exercised in accordance with law. He further submits that the Financial

Creditor has encashed the Fixed Deposit amount and further several

objections were raised by the Corporate Debtor which has not been considered

and only finding returned is of debt and default on which application has been

admitted.

4. Shri Abhijeet Sinha, learned senior counsel appearing for the

Respondent submits that the present is a case where debt and default is an

admitted fact. The fact that Appellant is approaching the Financial Creditor

for settlement itself indicate the debt and default is admitted.

5. Learned counsel for the Appellant submits that there were two more

Financial Creditors with whom Appellant has settled but with respect to the

Respondent settlement has not yet taken place. He further submitted that a

FD was encashed.

6. We have considered the submissions of learned counsel for the parties

and perused the record.

Company Appeal (AT) (Ins.) No.679 of 2025 3

7. The Adjudicating Authority has noticed the submissions which has

been advanced by the Appellant relying on the judgment of Hon'ble Supreme

Court in Vidarbha Industries Power Ltd. (Supra). From the facts which

have been brought on the record, it is clear that debt and default is not even

questioned. Appellant's case is that he has approached the Financial Creditor

for settlement which is not yet fructified, itself indicate that there is debt and

default, which has not been disputed. Learned counsel for the IRP submits

that the CoC has been constituted on 17.05.2025. In the facts of the present

case, we are of the view that course open for the Appellant in event any

settlement is entered with the Financial Creditor is to file Section 12A

application as per law laid down by the Hon'ble Supreme Court in "GLAS

Trust Company LLC vs. BYJU Raveendran & Ors., 2024 SCC OnLine SC

3032". We do not find any ground to interfere with the order impugned

admitting Section 7 application. With liberty aforesaid, the Appeal is

dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical) Archana/nn

Company Appeal (AT) (Ins.) No.679 of 2025