Ranjit Kapoor vs Asset Reconstruction Company (India) ...

Present: For Appellant : Mr. Sukumar Pattjoshi, Senior Advocate with Mr. Mayank Bughani, Advocate

For 1st Respondent: Mr. Himanshu Bhushan and Mr. Ankit Jain, Advocates

For 2nd Respondent : Mr. Gautam Singhal, Advocate Mr. R. Wali, Advocate for PNB

ORDER

03.05.2019 The Appellant - Shareholder/Director of 'M/s. White Metals

Limited' (Corporate Debtor) earlier moved before this Appellate Tribunal in

"Company Appeal (AT) (Insolvency) No. 410 of 2018" challenging the initiation of

'Corporate Insolvency Resolution Process' against the 'Corporate Debtor'

initiated at the instance of 'Asset Reconstruction Company (India) Limited under

Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, the 'I&B

Code'). The main plea taken by the appellant is that the Assignment Agreement

dated 17th April, 2015 is not genuine. This Appellate Tribunal by order dated

30th October, 2018 observed as follows: 2

"4. We have heard the learned Counsel

appearing on behalf of the parties and

perused the records.

5. We find that there are two Assignment

Agreements, one dated 21st July, 2014

and the other dated 17th April, 2015

executed in favour of the Respondent. For

initiation of Corporate Insolvency

Resolution Process, the Respondent -

Financial Creditor relied on the

Assignment Agreement dated 17th April,

2015. The Corporate Debtor has not

disputed the fact that there is a debt due

in law and fact and they defaulted in

paying the dues. It is not the case of the

Corporate Debtor that there is no debt in

law or in fact.

6. The question whether the Assignment

Agreement dated 17th April, 2015 is

genuine or not cannot be looked into by the

Adjudicating Authority while deciding the

application under Section 7 or by this

Appellate Tribunal, till the Corporate

Debtor alleges the same and raise the

objection under Section 65 of the Code. No

Company Appeal (AT) (Insolvency) No. 111 of 2019 3

such plea has been taken by the Corporate

Debtor before the Adjudicating Authority

alleging fraud on the part of the Financial

Creditor for initiation of proceedings under

Section 65 of the Code. Therefore, this

Appellate Tribunal cannot look into such

question of fraud.

7. Further, the provision of NPA relates to

SARFAESI Act, 2002 and has nothing to do

with Code.

8. We find no merit in this appeal. The appeal

is accordingly dismissed. No cost."

2. Subsequently, it appears that the Appellant thereafter filed an application

under Section 65 of the I&B Code alleging that the insolvency resolution process

was fraudulent or with malicious intent other than for the resolution of

insolvency and the Adjudicating Authority by impugned order dated 15th

January, 2019 rejected such allegation. Learned counsel appearing on behalf of

the appellant again relied upon the Assignment Agreement and it was submitted

that it was registered in NOIDA and the Assignment is related to sale of the

assets. However, that cannot be a ground to allege malicious intent on the part

of the 'Financial Creditor' for the purpose of Section 65 of the I&B Code.

3. We have already held that the validity of the Assignment Agreement cannot

be decided by the Adjudicating Authority and, therefore, the same issue could

not been reiterated.

Company Appeal (AT) (Insolvency) No. 111 of 2019 4

4. After the order was dictated, learned counsel for the Appellant sought

permission to withdraw the appeal.

5. The permission is granted with clear stipulation that the Appellant will not

raise such matter in future. The appeal stands disposed of as withdrawn with

aforesaid observations.

[Justice S.J. Mukhopadhaya] Chairperson

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

[ Kanthi Narahari ] Member (Technical)

/ns/gc

Company Appeal (AT) (Insolvency) No. 111 of 2019