Rahul Shukla vs State Bank Of India & Ors

[Arising out of Order dated 08.08.2019 passed by National Company Law Tribunal, Mumbai Bench in MA 1306/2018 in CP No.02/2018, CP No.01/2018, CP No.543/2018, CP No.507/2018, CP No.509/2018, CP No.511/2018, CP No.508/2018, CP No.512/2018, CP No.510/2018, CP No.528/2018, No.563/2018, CP No.560/2018, CP No.562/2018, CP No.559/2018, CP No.564/2018 & MA 1416/2018 in CP No.02/2018 & MA 393/2019 in MA 115/2019 in CP No.543/2018 & MA 1574/2019 in CP No.01/2018 & MA 774/2019 in CP No.543/2018 & MA 778/2019 in CP No.559/2018 & MA 1583/2018 in CP No.559/2018]

IN THE MATTER OF: Before NCLT Before NCLAT Rahul Shukla ... Appellant 553, Kanishka Residency, Ashoka Enclave - 3 Mathura Road, Faridabad, Haryana

Versus

1. State Bank of India Applicant in Respondent No.1 State Bank Bhavan, MA 1306/2018 Madam Cama Road, Mumbai - 400 021 acting thorough its Corporate Accounts Group Branch (Mumbai) at Neville House, J.N. Heredia Marg, Ballard Estate, Mumbai - 400 001

2. Videocon Industries Respondent No.1 Respondent No.2 Ltd., 14 KM Stone Aurangabad-Paithan Road, Village Chittegaon Taluka Paithan, Aurangabad - 431105 Through its Resolution Professional 2

3. Videocon Respondent No.2 Respondent No.3 Telecommunications Limited, RH No.2 Pratapnagar Shahnoorwadi Road, Aurangabad -431001 Through its Resolution Professional

4. Evans Fraser & Co. Respondent No.4 Respondent No.4 (India) Ltd., 171-C, 17th Floor, Mittal Court - C Wing, Nariman Point Mumbai - 400021 Through its Resolution Professional

5. Millennium Appliances Respondent No.5 Respondent No.5 (India) Ltd., 2275, Adate Bazar, Ahmednagar, Maharashtra - 414001 Through its Resolution Professional

6. Applicomp India Ltd., Respondent No.6 Respondent No.6 Gangapur GIN, Compound Station Road, Ahmednagar - 414001 Through its Resolution Professional

7. Electroworld Digital Respondent No.7 Respondent No.7 Solutions Ltd. 171-C, 17th Floor, Mittal Court - C Wing, Nariman Point Mumbai - 400021 Through its Resolution Professional

8. Techno Kart India Respondent No.8 Respondent No.8 Ltd., Auto Cars Compound, Adalat Road,

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Aurangabad - 431 005 Through its Resolution Professional

9. Century Appliances Ltd. Respondent No.10 Respondent No.9 Auto Cars Compound Adalat Road, Aurangabad -431005 Through its Resolution Professional

10. Techno Electronics Respondent No.11 Respondent No.10 Ltd., Auto Cars Compound, Adalat Road, Aurangabad -431005 Through its Resolution Professional

11. Value Industries Respondent No.12 Respondent No.11 Ltd., 14 KM Stone Aurangabad-Paithan Road, Village Chittegaon Taluka Paithan, Aurangabad -431105 Through its Resolution Professional

12. PE Electronics Ltd. Respondent No.13 Respondent No.12 Auto Cars Compound Adalat Road, Aurangabad -431005 Through its Resolution Professional

13. CE India Ltd. Respondent No.14 Respondent No.13 (CE India), Auto Cars Compound Adalat Road, Aurangabad -431005 Through its Resolution Professional

14. Sky Appliances Ltd. Respondent No.15 Respondent No.14 1601, Maker Chamber V, Nariman Point

Company Appeal (AT) (Ins) No.1072 of 2019 4

Mumbai -400021 Through its Resolution Professional

15. Mr. Venugopal N. Applicant in Respondent No.15 Dhoot, MA 1416/2018 Ex-Managing Director of Videocon Industries Limited, 14 KM Stone Aurangabad-Paithan Road, Village Chittegaon Taluka Paithan, District Aurangabad, Maharashtra-431105

For Appellant: Shri Abhijeet Sinha, Advocate

For Respondents: Shri Ramji Srinivasan, Sr. Advocate with Shri Bishwajit Dubey, Ms. Srideepa Bhattacharya and Ms. Sylona Mohapatra, Advocates (R-1) Shri Abhinav Vashisht, Sr. Advocate with Shri Zeeshan Khan, Advocate (for RP) Shri Yashvardhan and Shri Devender Singh, Advocates (R-15)

ORDER

30.01.2020 Heard Counsel for the Appellant and learned Counsel for

the Respondent No.1. This Appeal has been filed by the Appellant claiming to

be a shareholder of Videocon Industries Ltd. (VIL - in short). It is stated, the

VIL is part of different CIRP processes which have been consolidated by the

Adjudicating Authority (National Company Law Tribunal, Mumbai Bench,

Mumbai) in MA 1306/2018 in CP No.02/2018 (with other CPs) vide Orders

dated 8th August, 2019. Copy of the Impugned Order is at Annexure A-1

indicating the various proceedings. The Appellant has challenged the said

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Order of consolidation of insolvency process of Videocon group companies

filing this Appeal on the basis that he is one of the shareholders in one of the

Companies, which is part of the CIRP going on in view of consolidation orders.

2. The Appeal has been filed on 3rd October, 2019. The Impugned Order

was dated 8th August, 2019. Thus Appeal is filed after about 54 days. The

Appeal has been filed on the basis of self-attested Impugned Order. In Para -

2 of the Appeal (Page - 11), for the purpose of limitation, the Appellant has

stated as under:-

"2. Date on which the order appealed against is communicated and proof thereof, if any:

That the Impugned Order was pronounced by the Adjudicating Authority on 08.08.2019. Thereafter, the Impugned Order was uploaded on the site of the Adjudicating Authority subsequently. Since the Appellant herein was not a party to the proceedings before the Adjudication Authority, he had no immediate knowledge of the Impugned Order. The Appellant became aware of the Impugned Order only subsequently on 05.09.2019 through newspaper articles. The copy of the Impugned Order dated 08.08.2019 as downloaded by the Appellant from the site of the Adjudicating Authority is annexed herewith and marked as ANNEXURE A-1."

3. Thus he claims Appeal to be in limitation on the basis of knowledge.

This Tribunal had on 19.11.2019, directed the Appellant to file an Application

for condonation of delay and on 19.11.2019, the Appellant sought further time

to file the Application but the same has not been filed till today. The Appeal

needs to be dismissed also on this count of default.

4. The learned Counsel for the Appellant, however, submits that above

para - 2 is the only stand Appellant can take and thus did not file application

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as directed on 19.11.2019. Learned Counsel further states that Section 61 of

Insolvency and Bankruptcy Code, 2016 (IBC - in short) is relevant for the

purpose of limitation to file Appeal and the condonation of delay. Section 61(1

and 2) read as under:-

"(1) Notwithstanding anything to the contrary contained under the Companies Act 2013 (18 of 2013), any person aggrieved by the order of the Adjudicating Authority under this part may prefer an appeal to the National Company Law Appellate Tribunal.

(2) Every appeal under sub-section (1) shall be filed within thirty days before the National Company Law Appellate Tribunal:

Provided that the National Company Law Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days."

5. In Appeal para - 2 reproduced above, Appellant accepts that he was not

party to the proceedings. The learned Counsel is submitting that there are

rules governing the NCLT which are National Company Law Tribunal Rules,

2016 and Rule 157(3) requires sending of copies to the parties. The Counsel

submits that the Appellant was one of the shareholders of VIL and so copies

of Impugned Order should have been sent to shareholders. It is accepted that

VIL is a public limited company which is listed company. Counsel for

Appellant claims that no free copy of Impugned Order was sent to him and

thus, the Appeal cannot be said to be time barred as the Appellant now claims

to have come to know only through newspaper of 5th September, 2019.

Counsel referred to "Mahendra Trading Company & Ors. Vs. Hindustan

Controls and Equipment Pvt. Ltd." in Company Appeal (AT) (Insolvency) No.

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97 of 2018 dated 25.11.2019 to state that when there is provision to supply

free copy to parties, if not supplied, limitation will not run.

6. The learned Counsel for the Respondent No.1 is pointing out to the

Reply filed by the Respondent No.1 and copies of news articles attached with

the Reply marked as 'Annexure A-2 and A-3 (colly)'. It is submitted that copy

of Impugned Order was uploaded on site of Adjudicating Authority on 9th

August, 2019 itself and was in Public Domain. The Counsel submits that the

Appellant cannot claim that the Appellant came to know through newspaper

only on 5th September, 2019. It is stated that Annexures A-2 and A-3 show

vide publicity to the Order in various newspapers. It is stated that even if

Appellant wants to rely on date of knowledge, record shows that immediately

on the next day of the passing of the Impugned Order, various newspapers

carried various news articles regarding the consolidation Order with regard to

these Companies. The learned Counsel for Respondent is pointing out Para -

12 of its Reply to show that even on the sites of the Stock Exchanges,

information was given to all the shareholders on 23.08.2019 by putting up

the news and even the copy of Impugned Order is stated to have been put on

the websites and thus, the Appellant cannot claim not to be having knowledge.

Counsel states that no proof of Appellant being shareholder is given but even

assuming he is shareholder, his plea of knowledge only on 05.09.2019 is

unsupported and unacceptable. It is stated when shares of company are being

traded, it cannot be expected that free copies of Impugned Order should be

sent after searching such shareholders.

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7. We have heard Counsel for both sides and pursued the record.

Considering the Reply submitted by the Respondent No.1 and the vague

averment in Para - 2 of the Appeal, which has been reproduced, we find that

the claim of the Appellant that he became aware of the Impugned Order only

on 05.09.2019 through newspaper, is not believable and cannot be accepted.

There is no material submitted that on 05.09.2019 through newspaper, he

came to know about the Impugned Order.

8. Judgement in the matter of "Mahendra Trading Company" (supra) relied

on by the learned Counsel for the Appellant with regard to supply of free

certified copies to concerned persons, the relevant Para - 13 of that

Judgement reads as under:-

"13. We may observe that we have not taken into consideration the decision of the Hon'ble Supreme Court in "Singh Enterprises v. Commissioner of Central Excise" (Supra) as in the "Central Excise Act, 1944" there is no provision of communicating certified copy and there is no mandate to provide free certified copy to the concerned person and, therefore, we have noticed that the aforesaid decision is not applicable in the present case."

The observations do not help Appellant in present set of facts.

9. Sub-Rule (3) to Rule 157 of National Company Law Tribunal Rules,

2016 on which Counsel for Appellant is relying, reads as under:-

"(3) The Deputy Registrar shall thereafter cause to transmit the case file and the order to the Registry for taking steps to prepare copies and their communication to the parties."

Company Appeal (AT) (Ins) No.1072 of 2019 9

10. In the present set of facts, where it is stated that VIL is a public limited

company and shares of which are listed, it appears unimaginable how the

Appellant can expect the Deputy Registrar to have sent copies of the

Impugned Order to all the shareholders. When it is a listed company and the

shares are being traded, such expectation would be unpractical. Benevolent

Rule 157 of NCLT Rules, 2016 framed under Section 469 of Companies Act,

2013 which have been framed to carry out provisions of that Act, are being

imported into Appeal under Section 61 of IBC. We do not accept that Deputy

Registrar was required to go in search of persons trading shares to give them

copies, which would be unpractical and thus unenforceable. Such party can

rely only on knowledge.

11. The Respondent No.1 has shown that immediately on the next date of

the Impugned Order, the information regarding Impugned Order was in public

domain and even Stock Exchanges carried information on their website.

Knowledge can thus be attributed. If Appellant was aggrieved, Appeal should

have been filed in limitation. We reject the claim of the Appellant that he got

knowledge only on 5th September, 2019.

We hold that the Appeal is time barred.

Appeal is dismissed.

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

(Justice A.B. Singh) Member (Judicial)

[Kanthi Narahari] Member (Technical) /rs/md

Company Appeal (AT) (Ins) No.1072 of 2019