Rajit Mehra vs Punjab National Bank & Anr

For Appellant : Mr. Sandeep Bajaj, Ms. Aakanksha Nehra and Ms. Shourya Mittal, Advocates

ORDER

22.03.2018 The appellant, a shareholder of M/s. Rishi Ganga Power

Corporate Ltd. (Corporate Debtor), has preferred this appeal against order dated

25th January, 2018 passed by the Adjudicating Authority (National Company

Law Tribunal) Chandigarh Bench, Chandigarh whereby and whereunder the

application preferred by Punjab National Bank under Section 7 of the Insolvency

and Bankruptcy Code, 2016 (hereinafter referred to as the 'I&B Code') has been

admitted, order of moratorium has been passed and the insolvency resolution

professional has been appointed with certain directions.

2. Learned counsel appearing on behalf of the appellant submitted that the

application under Section 7 was filed by the 'power of attorney holder' and the

power of attorney was given in the year 1989. However, such ground cannot 2

be entertained to reject the application under Section 7 filed by the Punjab

National Bank for the following reasons:

i) in "Palogix Infrastructure Pvt. Ltd. vs. ICICI Bank - Company Appeal

(AT)(Insolvency) No. 30 of 2017", this Appellate Tribunal considered

the aforesaid question and observed :

"33. Therefore, we hold that a 'Power of Attorney

Holder' is not competent to file an application on

behalf of a 'Financial Creditor' or 'Operational

Creditor' or 'Corporate Applicant'."

The Appellate Tribunal proceeded further and held as follows:

"36. In so far as, the present case is concerned, the

'Financial Creditor'-Bank has pleaded that by

Board's Resolutions dated 30th May, 2002 and

30th October, 2009, the Bank authorised its

officers to do needful in the legal proceedings by

and against the Bank. If general authorisation

is made by any 'Financial Creditor' or

'Operational Creditor' or 'Corporate Applicant' in

favour of its officers to do needful in legal

proceedings by and against the 'Financial

Creditor' / 'Operational 15 Creditor'! 'Corporate

Applicant', mere use of word 'Power of. Attorney'

while delegating such power will not take away

Company Appeal (AT) (Insolvency) No. 102 of 2018 3

the authority of such officer and 'for all purposes

it is to be treated as an 'authorization' by the

'Financial Creditor'! 'Operational Creditor'!

'Corporate Applicant' in favour of its officer,

which can be delegated even by designation. In

such case, officer delegated with power can

claim to be the 'Authorized Representative' for

the purpose of filing any application under

section 7 or Section 9 or Section 10 of 'I&B Code'.

37. As per Entry 5 & 6 (Part I) of Form No. 1,

'Authorised Representative' is required to write

his name and address and position in relation

to the 'Financial Creditor'/Bank. If there is any

defect, in such case, an application under

section 7 cannot be rejected and the applicant is

to be granted seven days' time to produce the

Board Resolution and remove the defect.

38. This apart, if an officer, such as senior Manager

of a Bank has been authorised to grant loan, for

recovery of loan or to initiate a proceeding for

'Corporate Insolvency Resolution Process'

against the person who have taken loan, in such

case the 'Corporate Debtor' cannot plead that the

Company Appeal (AT) (Insolvency) No. 102 of 2018 4

officer has power to sanction loan, but such

officer has no power to recover the loan amount

or to initiate 'Corporate Insolvency Resolution

Process', in spite of default of debt."

3. In the present case the application has been filed by the Assistant General

Manager of the Punjab National Bank and, therefore, we are of the view that the

said Bank officer is eligible to file an application under Section 7 as the power of

attorney is the authorisation letter which was given as back as in the year 1989.

4. It was next contended that valuation of the security of the bank has not

been provided but that is not required to be provided in the cases when the

relevant data relating to 'debt' and default with supporting evidence has been

provided.

5. It is not disputed that there is a 'debt' which is payable by the 'Corporate

Debtor' to the 'Punjab National Bank' (Financial Creditor) and they have

defaulted to pay the amount. In such case, all the relevant details having

mentioned in Form 1, the application has been rightly admitted by the

Adjudicating Authority.

6. Learned counsel for the appellant further submitted that the account of

the 'Corporate Debtor' was declared Non-Performing Assets (NPA) in the year

2016 but subsequently loan was sanctioned by the Bank in the year 2017.

However, on such objection application cannot be rejected as the said fact was

Company Appeal (AT) (Insolvency) No. 102 of 2018 5

not required to be discharged in Form 1. The facts which are not required to be

disclosed in the format cannot be treated to be suppression of facts.

7. We find no merit in this appeal. It is accordingly dismissed.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/uk

Company Appeal (AT) (Insolvency) No. 102 of 2018