Pramila Bajoria And Others & Ors vs Eastern Housing Udyog Finance ...

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) No. 139 of 2026 (Arising out of Order dated 07.01.2026 passed by the Adjudicating Authority (National Company Law Tribunal), Division Bench, Court No.I, Kolkata in I.A. (IB) No.1583/KB/2024 in C.P.(IB) No.309/KB/2022)

IN THE MATTER OF: Pramila Bajoria and Ors. ...Appellants

Versus

Eastern Housing Udyog Finance Limited and Ors. ...Respondents

Present:

For Appellants : Mr. Rishav Banerjee, Mr. Rahul Sharma, Ms. Pallavi Ray, Advocates. For Respondents : Mr. Krishnendu Datta, Sr. Advocate with Mr. Aditya Shukla, Ms. Tanvi Luharwala, Ms. Niharika Sharma, Advocates for R1 & R4 Mr. Abhijeet Sinha, Sr. Advocate with Ms. Swati Dalmia, Mr. Orijit Chatterjee, Mr. Indranil Ghosh, Mr. Palzer Moktan, Mr. Shubham Raj, Mr. Ayush Pratap Singh, Advocates for R7 Mr. Hansraj Jaria, Mr. Shannab Mitra & Mr. Mohit Sharma, Advocates.

JUDGMENT

ASHOK BHUSHAN, J.

This Appeal by the Appellants, who were erstwhile shareholders of

the Corporate Debtor ("CD") has been filed challenging the order dated

07.01.2026 passed by National Company Law Tribunal, Division Bench,

Court No.I, Kolkata in I.A (IB) No.1583/KB/2024. I.A (IB) No.

1583/KB/2024 was filed by the Appellant under Section 65 of the

Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the

"IBC") for dismissing the Company Petition filed and further praying to

Company Appeal (AT) (Ins.) No.139 of 2026 1 recall the admission order dated 15.12.2023 passed by Adjudicating

Authority admitting Section 7 application filed by the Financial Creditor.

Certain other prayers have also been made in the application, which have

been noted by the Adjudicating Authority in the impugned order. The

Adjudicating Authority by the impugned order rejected the application.

Aggrieved by which order, this Appeal has been filed.

2. We need to notice relevant facts of the case for appreciating the

issues sought to be raised by the Appellant in this Appeal:

(i) A Loan Agreement was entered between the Financial

Creditor ("FC") - Eastern Housing Udyog Finance Ltd.

and the CD - Aruttipore Tea Co. Ltd. on 28.06.2019,

providing business loan of Rs.2.5 crores. Loan recall

notice was issued on 10.09.2020 on behalf of the FC.

(ii) An Agreement dated 19.08.2021 was entered between

the FC and the CD under which the CD was to induct

nominees of the FC in its Board.

(iii) On 29.11.2021, the FC filed an application under

Section 7 against the CD being CP(IB) No.361

/KB/2021. The CD appeared and in the said Company

Petition, the parties were heard and orders were

reserved by the Adjudicating Authority. A Settlement

Agreement dated 13.04.2022 was entered between the

FC and the CD, where the CD agreed to pay an amount

of Rs.2,49,99,330/- towards full and final settlement.

Company Appeal (AT) (Ins.) No.139 of 2026 2 Rs.15 lakhs was to be paid at the time of signing of the

Agreement and the rest were to be paid in 12 months in

equal instalments. On the basis of the Settlement

Agreement entered between the parties, the Company

Petition was dismissed as withdrawn on 25.04.2022.

(iv) Cheques issued by the CD were dishonoured in July

2022. In September 2022, the FC filed CP(IB)No.309

/KB/2022. The Adjudicating Authority heard the

parties and vide order dated 15.12.2023 admitted

Section 7 application finding the debt and default

committed by the CD. The Adjudicating Authority

noted that by Settlement Agreement dated 13.04.2022,

the CD undertook to make payment of

Rs.2,49,99,330/- and debt and default having been

proved, the Adjudicating Authority admitted Section 7

application for dues of Rs.4,70,37,016/-.

(v) The application under Section 65 being I.A (IB) No.

1583/KB/2024 was filed by the Appellants after eight

months of admission of Section 7 application. From

the prayers made in IA it is clear that the Appellants,

who were erstwhile shareholders of the CD have prayed

for recall of the order admitting Section 7 application

and dismissing Section 7 application. The IA was

Company Appeal (AT) (Ins.) No.139 of 2026 3 rejected by the Adjudicating Authority. Aggrieved by

which order, this Appeal has been filed.

3. We have heard Shri Rishav Banerjee, learned Counsel appearing for

the Appellants; Shri Krishnendu Datta, learned Senior Counsel appearing

for the FC; and Shri Abhijeet Sinha learned Senior Counsel appearing for

Respondent No.7.

4. Learned Counsel appearing for the Appellants submits that Section

7 petition was initiated by the FC fraudulently and maliciously in

connivance with the CD. It is contended that loan recall noticed dated

10.09.2020 was issued by the FC, which was signed by one Atish Kumar

Shaw, authorized signatory of FC, who has also affirmed the affidavit in

reply filed by the CD to the application filed under Section 7. It is

submitted that the FC and the CD, both were acting through same

individuals, which clearly indicate collusion between the parties. A

General Power of Attorney was given to Mr. Atish Kumar Shaw on

05.10.2021 on behalf of the CD to appear in proceedings before the NCLT,

who had also issued the legal notice dated 10.09.2020 on behalf of the

FC. It is submitted that the FC is promoted and controlled by

Respondent No.4 - Om Prakash Saxena, who was business partner with

Appellant No.2. A Settlement Agreement was entered on 19.08.2021

between the Appellant and FC, where the Appellant decided to transfer all

shares in favour of Respondent No.4 or their nominees. Section 7

application has been filed to defeat the Settlement Agreement dated

19.08.2021. It is submitted that Appellants were not aware of the order

Company Appeal (AT) (Ins.) No.139 of 2026 4 admitting Section 7 application as they have already exited from the CD.

It is submitted that sufficient materials were placed before the

Adjudicating Authority to prove that initiation was both collusive and

malafide and the Adjudicating Authority committed error in rejecting the

application.

5. Learned Senior Counsel appearing for the FC refuting the

submissions of the Appellants submits that the Appellants' case that they

were not aware of the order initiating CIRP dated 15.12.2023, is incorrect.

In December 2023 itself in the criminal proceedings in which the

Appellant and the CD were both accused, the NCLT order dated

15.12.2023 was noticed. Application under Section 65 was filed in July

2024, after lapse of eight months. No Appeal was filed against the order

admitting Section 7 application. It is submitted that FC had already filed

a Civil Suit No. 104 of 2021 before the High Court of Calcutta, where the

High Court has appointed a Receiver. The Settlement Agreement dated

19.08.2021 was entered, in which all the Appellants were party, and they

having been signed the same, the liability of the CD was acknowledged. It

is submitted that the Balance Sheets of the CD for 2019-2020 and 2020-

2021 have been signed by Appellant No.2 acknowledging the liability. The

debt and default occurred during the time when CD was under the

management of the Appellants. In the first CIRP which was filed, a

Settlement Agreement was entered between the parties on 13.04.2022,

where the CD undertook to pay the amount of Rs.2,49,99,330/-. The

default having been committed in making the said payment, second CIRP

Company Appeal (AT) (Ins.) No.139 of 2026 5 being C.P.(IB) No.309/KB/2022 was filed. The case setup by the

Appellants that initiation was malafide and malicious is wholly a bogus

plea. It is submitted that Mr. Atish Kumar Shaw, who has filed reply on

behalf of the CD, it was on account of the Board Resolution, authorizing

Mr. Shaw to file the reply. The Board Resolution and the Power of

Attorney both were signed by Appellant No.2. Had Mr. Atish Kumar

Shaw, who had given the loan recall notice on behalf of the FC was not a

competent person, Board Resolution ought not to have been passed in

favour of Mr.Atish Kumar Shaw. It is submitted that Mr. Atish Kumar

Shaw was practicing Chartered Accountant and was professionally

associated with the FC and the CD. It is submitted that Adjudicating

Authority has considered all facts of the case in detail and has rightly

rejected the application filed by the Appellants.

6. We have considered the submissions of learned Counsel for the

parties and have perused the records.

7. On default being committed by the CD in repayment of the amount

given by the FC, loan recall notice was issued. Cheques were issued by

the CD in August 2020, which were returned unpaid. Civil Suit was filed

by the FC in Calcutta High Court being Civil Suit No.104 of 2021, where a

Receiver was appointed in June 2021. Earlier Section 7 application was

filed by the FC being CP(IB) 361(KB)/2021, in which a Settlement

Agreement dated 13.04.2022 was entered, which Settlement Agreement

has been brought on the record by the Appellants at Page 981 of the

Appeal paperbook. The Settlement Agreement was entered between the

Company Appeal (AT) (Ins.) No.139 of 2026 6 FC and the CD, wherein in paragraph (g), (h) and (i), following were

stated:

"g} The petition filed under section 7 of Insolvency and Bankruptcy Code, 2016 (IBC) against the Second Pany on 20.11.2021 before the Hon'ble National Company Law Tribunal Kolkata bench. The arguments in the matter were concluded and the Hon'ble Tribunal has reserved the order.

h) That after which the both the parties have amicably settled the said matter under which the Second Party has agreed to pay an amount of Rs. 2,49,99,330/- (Rupees Two Crore Forty-Nine Lakhs Ninety-Nine Thousand Three Hundred and Thirty only), to the First Party towards full and final settlement of all the claims of First Party and Second Party as against each other.

i) That since both the parties have amicably settled the said matter, the First Party agrees to file a Withdrawal Application for withdrawing the application filed under section 7 of Insolvency and Bankruptcy Code, 2016, immediately on the signing of this Settlement Agreement."

8. In Paragraph-1 of the Settlement Agreement, the settlement amount

and the manner of payment was mentioned. Paragraph-1 of the

Settlement Agreement is as follows:

"1. SETTLEMENT AMOUNT

The parties have agreed to settle the pending dispute. The party of the second part has agreed to pay an amount of Rs. 2,49,99,330/- (Rupees Two Crore Forty Nine Lakhs Ninety-Nine Thousand Three Hundred and Thirty only), to the First Party which will be paid in the following manner:

Sl.No. Particulars Amount 1. At the time of signing the Rs.15,00,000/- Settlement Agreement

2. Balance Settled amount of Rs. Rs.19,58,278/-"

2,34,99,330/- to be paid in 12 month from the date of singing the Settlement Agreement in equal instalment

9. On the basis of the Settlement Agreement dated 13.04.2022,

Section 7 application was dismissed as withdrawn on 25.04.2022, which

order is as follows:

Company Appeal (AT) (Ins.) No.139 of 2026 7

"1. Ld. Counsel on both sides present.

2. ΙΑ 368/KB/2022 is an application filed to record the settlement arrived at between the Financial Creditor and the Corporate Debtor. The I.A. 368/KB/2022 is allowed. Consequently, CP (IB) 361/KB/2021 shall stand dismissed as withdrawn.

3. File be consigned to the record."

10. It was after dismissal as withdrawn of earlier Section 7 application,

when cheques given by the CD were dishonoured and amount as agreed

was not paid, C.P.(IB) No.309/KB/2022 was filed, claiming default of

amount of Rs.4,70,37,016/- and date of default mentioned as

10.07.2022. The Section 7 application was admitted by the Adjudicating

Authority on 15.12.2023. In the first Section 7 application, which was

filed by the FC alleging default, a Settlement Agreement was entered on

13.04.2022 between the CD and the FC, where CD undertook to make the

payment. The cheques issued by the CD having been dishonoured, a

default was committed by the CD in honouring its commitment, second

Section 7 application being C.P.(IB) No.309/KB/2022 was filed on

29.09.2022. In the facts of the present case, submission of the Appellant

cannot be accepted that initiation of Section 7 application was malicious

and fraudulent. The default was committed by the CD at the time when

Appellants were in the management of the CD.

11. The submission which has been much pressed by learned Counsel

for the Appellant is that recall notice dated 10.09.2020 on behalf of the

FC was signed by one Mr. Atish Kumar Shaw, who affirmed and verified

the reply affidavit filed by the CD. It is the case of the Appellant itself that

Company Appeal (AT) (Ins.) No.139 of 2026 8 Board Resolution was passed on 05.10.2021 by the CD, where Mr. Atish

Kumar Shaw was authorized to sign, verify and represent the CD before

the NCLT and NCLAT. The copy of the Board Resolution, which is at

Page-579 of the Appeal paperbook, shows that the said Board Resolution

was also signed by one of the Appellant. The CD having by Board

Resolution authorized Mr. Atish Kumar Shaw to appear before the NCLT,

no objection can be taken on behalf of the Ex-Directors of the CD that Mr.

Atish Kumar Shaw could not have filed reply in Section 7 application. It

has been submitted on behalf of the Respondent that Mr. Atish Kumar

Shaw is a practicing Chartered Accountant, who was associated with both

FC and the CD. Giving loan recall notice on behalf of the FC, cannot be a

reason to hold that initiation of Section 7 application by FC was

fraudulent and malicious. The Board Resolution authorizing Mr. Atish

Kumar Shaw on behalf of the CD is subsequent to issuance of loan recall

notice, hence, had there any objection with regard to Mr. Atish Kumar

Shaw to represent the CD, the Board of the CD would not have passed the

resolution. We, thus, do not find any substance in the above submission

of the Appellant that initiation of CIRP has to be held malafide and

fraudulent.

12. Learned Counsel for the Appellant has also submitted that

Adjudicating Authority committed error in holding that no Appeal having

been filed by the Appellant, they could not have filed Section 65

application. Even if, this submission is accepted that non-filing of the

Appeal does not affect filing of Section 65 application by the Appellant,

Company Appeal (AT) (Ins.) No.139 of 2026 9 the Adjudicating Authority has considered the issue on merits and an

Issue No.2 was framed, 'whether the initiation of CIRP in C.P.(IB)

No.309/KB/2022 was fraudulent, malicious or a collusive proceeding?'.

The issue having considered and answered holding that Applicant has not

produced any material that satisfies the strict standard of proof required

under Section 65. We, thus, are of the view that Adjudicating Authority

did not commit any error in rejecting application Section 65 application

filed by the Appellant praying for rejection of Section 7 proceedings and

recall of admission order dated 15.12.2023.

13. There is no merit in the Appeal. The Appeal is dismissed. Parties

shall bear their own costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

NEW DELHI

6th February, 2026

Ashwani

Company Appeal (AT) (Ins.) No.139 of 2026 10