State Bank Of India vs B Prashant Hegde

IN THE MATTER OF: B. Prashanth Hegde ...Appellant

Vs

State Bank of India &Anr. ...Respondents

Present:

For Appellant: Mr Pranjal Kishore, Advocate. B. Prashanth Hegde, Party in Person.

For Respondent: Ms Shubhra Kapur, Mr Sanjay Kapur, Mr Arjun Bhatia and Mr V M Kannan (State Bank of India), Advocates for Respondent No.1.

Mr Mukund P. Unny (R.P.), Advocate for Respondent No. 2.

ORDER

(Through Virtual Mode)

15.07.2021 The Applicant (Respondent No.1) has filed Application for

incorporating amendment in Section 7 Application in terms of order of the

Hon'ble Supreme Court dated 15thApril 2021 passed in Civil Appeal No. 3765

of 2021. Paragraphs No. 6, 7 and 8 of the order of the Hon'ble Supreme Court

are reproduced below for ready reference:

"6. There can be no doubt whatsoever that the Appellant has been completely remiss and deficient in pleading acknowledgment of liability on the facts of this case. However,

Company Appeal (AT)(Insolvency) No. 68 of 2019 & I.A. No. 1078, 1091 of 2021 1 of 5 given the staggering amount allegedly due from the respondents, we afford one further opportunity to the Appellant to amend its pleadings so as to incorporate what is stated in the written submissions filed by it before the NCLAT, subject to costs of Rs.1,00,000/- to be paid by the Appellant to the respondents within a period of four weeks from today.

7. We, therefore, allow the Appeal, set aside the judgment of the NCLAT dated 14.10.2020, and restore the Appeal to the file to be decided in light of our judgment in Civil Appeal No. 323 of 2021.

8. Interim order passed by this Court on 16.12.2020 stands vacated."

Hon'ble Supreme Court has afforded one further opportunity to the

Appellant to amend its pleadings, to incorporate what is stated in the written

submissions filed by it before the NCLAT, subject to costs of Rs.1,00,000/-

(Rupees One Lakh) to be paid by the Applicant (Respondent No. 1 herein) to

the Appellant (herein) within four weeks from the date of order.

Further, Hon'ble Supreme Court has set aside the order passed by this

Appellate Tribunal in Company Appeal No. 68 of 2019 and restored the Appeal

to its original number.

In compliance with the above order, Applicant has filed the Application

mentioned above and stated that they had paid Rs.1,00,000/- (Rupees One

Lakh) vide bankers cheque No. 160929 dated 27th April 2021. Copy of the

Company Appeal (AT)(Insolvency) No. 68 of 2019 & I.A. No. 1078, 1091 of 2021 2 of 5 banker's cheque alongwith covering letter is annexed with the Application as

Annexure A3.

Applicant/ Respondent No. 1 has filed amended Application under

Section 7 of the IBC before the Adjudicating Authority (NCLT, Bangalore

Bench). Copy of the said amended Application is annexed with this

Application as Annexure A4.

Applicant/Respondent No.1 has filed a copy of the Amendment

Application in terms of the Hon'ble Supreme Court order before this Appellate

Tribunal, which is also annexed with this Application as Annexure A5.

In the circumstances, above Applicant/Respondent No.1 has requested

to amend the pleadings in terms of the order of Hon'ble Supreme Court dated

15th April 2021 in Civil Appeal No.3765 of 2020.

Appellant has filed Reply in response to the amendment Application,

wherein it is stated that:

"a. an amendment can be allowed after commencement of trial; only when the Court is satisfied that the matter could not be raised earlier despite due diligence. No averments regarding due diligence have been made by the Applicant.

b. The proviso to Section 7(5)(b) of the IBC is not maintainable.

Company Appeal (AT)(Insolvency) No. 68 of 2019 & I.A. No. 1078, 1091 of 2021 3 of 5 c. Rule 155 of the NCLT Rules, 2016 allows amendments only if made within 30 days from the date of completion of pleadings.

d. The amendment sought to be made introduces a new case. The same is contrary to pleadings made on affidavit and contentions recorded both before this Ld. Appellate tribunal and the Ld. National Company Law Tribunal, Bangalore.

e. The amendments sought to be made are mala fide and ought not to be allowed."

We have heard the arguments of the Learned Counsel for the parties

and perused the records.

Applicant/Respondent No.1 has filed Amendment Application in

compliance with the order passed by the Hon'ble Supreme Court in Civil

Appeal No.3765 of 2020, whereby the liberty has been given to the

Applicant/Respondent No.1 to incorporate amendments in the pleadings

what is stated in written submissions filed before this Appellate Tribunal,

subject to payment of the cost of Rs.1,00,000/- (Rupees One Lakh) to the

Respondents. Accordingly, the appellant has paid the cost and applied for an

amendment.

The Applicant has filed the amended Section 7 Application before the

NCLT Bengaluru Bench, and the copy of the same is annexed with the I.A.

before this Appellate Tribunal. The objections of the Appellant against the

proposed amendment are formal in nature.

Company Appeal (AT)(Insolvency) No. 68 of 2019 & I.A. No. 1078, 1091 of 2021 4 of 5 Appellant has raised the objection that amendment can be allowed after

commencement of trial only when the Court is satisfied that the matter could

not be submitted earlier despite due diligence. However, no averments

regarding due diligence have been made by the Applicant. Appellant has

further contended that Rule 155 of NCLT Rules, 2016 allows amendments

only within 30 days from the date of completion of pleadings.

The above objections are not sustainable because the proposed

amendment is being done in compliance with the order of Hon'ble Supreme

Court.

In the circumstances, I.A. No.1091 of 2021is allowed. Amendment in

the pleadings is accepted in terms of the Hon'ble Supreme Court order. Reply,

if any, may be filed within 7 days from today, with a copy in advance to the

opposite party. After that, a Rejoinder, if any, may be filed within seven days

with a copy to the opposite party.

List on 06th August 2021 for argument in Company Appeal (AT)(Ins.)

No.68 of 2019.

Meanwhile, till disposal of this Appeal, CIRP/Liquidation proceedings

shall remain stayed.

[Justice Jarat Kumar Jain] Member (Judicial)

[V.P.Singh] Member(Technical) pks/M.D.

Company Appeal (AT)(Insolvency) No. 68 of 2019 & I.A. No. 1078, 1091 of 2021 5 of 5