Delhi High Court - Orders
Sanjay Dhingra vs Idbi Bank Limited on 25 May, 2022
Author: Sanjeev Narula
Bench: Sanjeev Narula
$~93
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 7181/2022
SANJAY DHINGRA ..... Petitioner
Through: Ms. Maneesha Dhir, Advocate with
Ms. Rishika Ahuja, Advocate.
versus
IDBI BANK LIMITED ..... Respondent
Through: Mr. Sidhartha Barua, Advocate with
Mr. Praful Jindal and Mr. Daanish
Abbasi, Advocates.
CORAM:
HON'BLE MR. JUSTICE SANJEEV NARULA
ORDER
% 25.05.2022 CM APPL. 22010/2022 (u/ Section 151 of the Code of Civil Procedure, 1908 [hereinafter "CPC"] seeking exemption from filing typed copies of dim annexures)
1. Exemption is granted, subject to all just exceptions.
2. The Petitioner shall file legible and clearer copies of exempted documents, compliant with practice rules, before the next date of hearing.
3. Accordingly, the application stands disposed of.
W.P.(C) 7181/2022 & CM APPL. 22009/2022 (u/ Order XXXIX Rule 1 & 2 of CPC seeking ex-parte ad-interim stay)
4. Issue notice. Mr. Sidhartha Barua, Advocate, accepts notice on behalf Signature Not Verified Digitally Signed W.P.(C) 7181/2022 Page 1 of 5 By:SAPNA SETHI Signing Date:26.05.2022 20:15:08 Respondent.
5. The Petitioner has filed the above-captioned petition impugning the Order passed by 'WILFUL DEFAULTER'S REVIEW COMMITTEE' [hereinafter "WDRC"] dated 24th April, 2022 [hereinafter "Impugned Order"] wherein the Petitioner was declared to be a Wilful Defaulter.
6. Ms. Maneesha Dhir, counsel for the Petitioner presses for interim orders by making following submissions: -
(a) The minutes enclosed with the communication dated 04 th April, 2022 have not been signed by the members who were part of the WDRC.
(b) The Petitioner was appointed as 'Director' on the board of M/s.
Kwality Ltd. [hereinafter "Company"] in the year 2003. Later, he was appointed as the 'Managing Director' on 08th October, 2015. On 16th September, 2018, the account of the Company was declared as NPA by Respondent-Bank. On 11th July, 2018, however, the Petitioner tendered his resignation and ceased to be associated with the Company and hence, the show cause notice ought not to be sent to him. An application under Section 7 of the Insolvency and Bankruptcy Code, 2016 [hereinafter "IBC"], was filed by one of the financial creditors of the Company (on 11 th December, 2018) which was admitted by NCLT, New Delhi (Principal Bench). Now, the Company has already been sold in CIRP proceedings. In fact, upon admission of CIRP, all relevant documents of the Company were handed over by the Petitioner to the Resolution Professional. The Petitioner has no access to any record of the said Company.
Signature Not Verified Digitally Signed W.P.(C) 7181/2022 Page 2 of 5 By:SAPNA SETHI Signing Date:26.05.2022 20:15:08(c) No specific role or allegation has been made by the Respondent-Bank against the Petitioner. In fact, the Respondent-Bank has failed to provide any cogent reason or any evidentiary document(s) while levelling the allegations of 'wilful default' against the Petitioner.
(d) The entire proceedings emanate from the Forensic Audit Report, which has been examined by a coordinate bench of this Court in CRL. MC. 1038/2021, wherein the Court vide Order dated 02nd June, 2021 has made the following observations: -
"23. Therefore, in these facts and circumstances of this case, at this stage, I am not inclined to quash the Forensic Audit Report of M/s GSA & Associates, so a fresh Forensic Audit Firm namely PVRN & Co. is appointed from the list of IBA empanelled Forensic Audit Firms which are empanelled for conducting forensic audit of frauds above an exposure of Rs. 50 Crores with the directions to examine the matter afresh between the period 01.10.2015 to 30.06.2018. The said Forensic Audit Firm shall give its report within 5 months and till that time no further coercive action be taken against the petitioners. All the expenses in respect of the said Audit shall be borne by the petitioners."
The aforesaid matter is sub-judice and hence, the Respondent-Bank has erred in declaring the Petitioner to be a Wilful Defaulter relying on the Forensic Audit Report.
(d) Union Bank of India, in its capacity of creditor of the Company has filed a petition under Section 95 of IBC and consequently, interim moratorium has been granted under Section 96 of IBC. The interim moratorium is deemed to be automatically kick in against the Petitioner. Therefore, the Wilful Defaulter proceedings initiated by Respondent- Bank ought to be stayed.
7. The issues urged by the Petitioner would require consideration.
Signature Not Verified Digitally Signed W.P.(C) 7181/2022 Page 3 of 5 By:SAPNA SETHI Signing Date:26.05.2022 20:15:08However, the afore-noted submissions, do not satisfy the Court to grant any interim protection. The communication dated 04th April, 2022, has been sent by the Deputy General Manager of IDBI Bank, enclosing therewith the Order dated 04th April, 2022 termed as - 'ORDER NO. WDRC/ 32/ (FY2021-
22)/ KL'. After enclosing the text of the minutes, it has been indicated that this communication has been sent on behalf of WDRC. Undoubtedly, the said communication is signed by Chief General Manager, NPA Management Group, however, this does not mean the minutes referred thereto have not been signed by the members. In fact, Mr. Barua controverts the submissions and states that relevant record can be produced to confirm this fact if the Respondent-Bank is afforded some time. At this stage, it cannot be assumed that there was no deliberation by WDRC or that the minutes enclosed have not been approved.
8. WDRC has carefully examined and perused the documents and found the Petitioner to already have access to the Transaction Audit Report as well as observations made therein. Prima facie it appears that the Petitioner had access to financial documents involving the Company. It cannot, therefore, be assumed that the Petitioner had no role to play. No manifest arbitrariness in the Impugned Order is discernible at this stage.
9. Insofar as the effect of the Order dated 02nd June, 2021 is concerned, it is obvious from the order itself that the Court has not quashed the Forensic Audit Report. The Court has only directed that a fresh forensic audit be carried out. Therefore, at this stage, the Forensic Audit Report cannot be ignored. The contention urged qua automatic application of interim Signature Not Verified Digitally Signed W.P.(C) 7181/2022 Page 4 of 5 By:SAPNA SETHI Signing Date:26.05.2022 20:15:08 moratorium and its effect on Wilful Defaulter proceedings would be considered after affording the Respondent-Bank an opportunity to file a response to the petition.
10. For the foregoing reasons, no prima facie case is made out for grant of ad-interim stay of the Impugned Order or any other interim protection. This opinion is expressed on prima facie basis only. Respondent-Bank is directed to file their reply to the interim application in four weeks' time. Rejoinder thereto be filed two weeks thereafter.
11. Re-notify on 09th September, 2022.
SANJEEV NARULA, J MAY 25, 2022/as Signature Not Verified Digitally Signed W.P.(C) 7181/2022 Page 5 of 5 By:SAPNA SETHI Signing Date:26.05.2022 20:15:08