State Bank Of India vs Kosas Instrustries Private Limited

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Ins) No. 472 of 2023 IN THE MATTER OF: State Bank of India ...Appellant Versus Kosas Industries Pvt. Ltd. ...Respondent

Present For Appellant : Mr. Harshit Khare, Mr. Prafful Saini, Advocates For Respondent : Mr. Arpit Singhvi, Advocate

ORDER

14.09.2023: Heard Mr. Harshit Khare, Ld. Counsel for the Appellant as

well as Mr. Arpit Singhvi, Ld. Counsel who appeared on behalf of the

Respondent.

The present appeal has been preferred under Section 61 of the

Insolvency and Bankruptcy Code, 2016 (herein after referred to as 'Code')

against an order dated 09.02.2023 passed by National Company Law Tribunal,

Mumbai Bench-IV (herein after referred to as 'Adjudicating Authority') in CP

(IB) No. 1446/MB-IV/2020. By the said order the Adjudicating Authority has

rejected the petition filed under Section 7 of 'Code' on behalf of the

Appellant/Financial Creditor primarily on the ground of limitation.

The Appellant had filed an application under Section 7 of the Code before

the Adjudicating Authority on an allegation that there was default in payment

of Rs. 98,19,09,715.15 (Rupees Ninety Eight Crore Nineteen Lakh Nine

Thousand Seven Hundred Fifteen and Fifteen Paise only). It is not in dispute

that account was declared Non-Performing Asset ('NPA') on 28.12.2015. -2-

It is case of the Appellant that since the payment was not made, the Bank had

approached the Debt Recovery Tribunal ('DRT') wherein a settlement agreement

was filed. The settlement agreement dated 14.03.2018 was part of the

proceeding before the DRT wherein Respondent had agreed for payment of Rs.

9,40,00,000/- (Rupees Nine Crores and Forty Lakhs Only).

However, the Adjudicating Authority had noticed that One Time

Settlement ('OTS') proposal was dated 06.12.2021 and as such the

Adjudicating Authority had concluded that the application was barred by

limitation, since three years had already expired after the account was declared

NPA. It appears that despite the fact that the appellant had brought to the

notice of the Adjudicating Authority the fact regarding settlement of the parties

dated 14.03.2018, it went unnoticed by the Adjudicating Authority. Ld.

Counsel for the Respondent has not disputed the fact that Settlement Proposal

was dated 14.03.2018. Meaning thereby that after the account was declared

NPA on 28.12.2015, within three years Settlement had already taken place on

14.03.2018. In such view of the matter there was no reason to dismiss the

application filed under Section 7 of the Code primarily on the ground of

limitation.

Company Appeal (AT) (Ins) No. 472 of 2023 -3-

Since, the fact regarding the earlier Settlement of 2018 went unnoticed,

we are of the opinion that impugned order dated 09.02.2023 can be set aside

and matter is remitted back to the Adjudicating Authority to examine the

application filed under Section 7 of the Code, without being influenced by the

earlier order since it has already been admitted by the Respondent that

Settlement had taken place on 14.03.2018 within three years from the date of

declaring the account as NPA on 28.12.2015.

Ld. Adjudicating Authority without being influenced with this order may

examine the application filed under Section 7 of the Code by the

Appellant/Financial Creditor and pass order expeditiously in accordance with

law. For abundant precaution the appellant is granted liberty to bring on

record before the Adjudicating Authority Settlement Agreement dated

14.03.2018 in which the Respondent/Corporate Debtor had acknowledged the

debt and agreed to pay Rs. 9,40,00,000/- (Rupees Nine Crores and Forty Lakhs

Only). Both the parties have agreed to appear before the Adjudicating Authority

within three weeks from today.

Accordingly, the appeal is allowed.

[Justice Rakesh Kumar] Member (Judicial)

[Dr. Alok Srivastava] Member (Technical)

sr/md Company Appeal (AT) (Ins) No. 472 of 2023