Raushan Prakash (Shareholders And ... vs Kapil Arora & Anr
- CitationCompany Appeal (AT) (Insolvency) No.329 of 2019
Ratio decidendi
The rule this decision rests on
The reasoning in this order rests on two points only, and the court gives reasons for each. Where a cheque issued by a corporate debtor in discharge of a loan liability is dated on particular dates, the period of limitation for an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 runs from the date on which the debt became due in respect of those cheques, so that an application filed within the limitation period from those dates is not barred by limitation. A plea that the corporate debtor has discharged the debt by cash payment, raised for the first time at the appellate stage and inconsistent with the appellant's earlier stand that it would settle and pay the creditors, cannot be accepted and does not displace the existence of the debt for the purposes of the proceedings.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Mr. Raushan Prakash (Shareholder and Ex-Director) .... Appellant
Vs
Mr. Kapil Arora & Anr. .... Respondents
Present:
For Appellant: Mr. C.S. Gupta and Mr. Anand Shukla, Advocates.
For Respondents: Ms. Prachi Johri, Advocate.
ORDER
10.05.2019 Mr. Kapil Arora (Financial Creditor) filed application
under Section 7 of the Insolvency & Bankruptcy Code, 2016 (I&B Code)
against Vyom Infrastructure and Projects Pvt. Ltd. (Corporate Debtor), which
having been admitted by the Adjudicating Authority (National Company Law
Tribunal), Principal Bench, New Delhi on 12th February, 2019, the Appellant
- Mr. Raushan Prakash (Shareholder and Ex-Director) challenged the same.
2. Initially, the Counsel for the Appellant submitted that the Appellant
wants to settle the dispute and pay the creditors (on 25th April, 2019). Today,
it is informed that the Appellant could not settle the matter with the
Respondents and still the negotiation is going on, which is disputed by the
Counsel for the Respondent.
Page 1 of 2
3. The contrary argument is now made that the application under Section
7 is barred by limitation and there is no debt payable in the eyes of law.
4. From the record, we find that 'Corporate Debtor' issued cheques in
favour of the 'Financial Creditor' and entered into revised loan agreement on
7th April, 2015 and, inter alia, issued different cheques including the cheques
dated 1st September, 2015; 1st October, 2015; 1st November 2015; and 1st
December, 2015. Admittedly, the application under Section 7 was filed in
June-July, 2018 and, thereby, we find that the application under Section 7
is not barred by limitation, nor the claim is barred by limitation. It was next
contended that the 'Corporate Debtor' has paid the total dues by cash, but
such submission cannot be accepted, which is also contrary to the stand
initially taken that the Appellant will settle and pay the amount.
5. In the absence of any merit, we dismiss the Appeal. No cost.
[Justice S. J. Mukhopadhaya] Chairperson
[Justice A.I.S. Cheema] Member (Judicial)
[Kanthi Narahari] Member (Technical)
Ash/GC Company Appeal (AT) (Insolvency) No.329 of 2019 Page 2 of 2
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free