National Company Law Appellate Tribunal
Union Bank Of India Limited vs Supreme Manor Wada Bhiwandi ... on 11 July, 2022
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH,
NEW DELHI
Company Appeal (AT) (Insolvency) No. 881 of 2020
IN THE MATTER OF:
Union Bank of India Ltd. ...Appellant
Versus
Supreme Manor Wada ...Respondent
Bhiwandi Infrastructure Pvt. Ltd.
Present:
For Appellant: Mr. J Rajesh, Mr. Dhrupad Vaghani, Ms. Ananyaa
Mazumdar, Mr. Arpan Bahl, Mr. Jaitegan Khurana,
Mr. Yashwardhan Agarwal, Advocates
For Respondents: Mr. Abhijeet Sinha, Mr. Aman Varma, Mr. Saikat
Sarkar, Advocates
ORDER
(Virtual Mode) 11.07.2022: This appeal is against the order dated 11.08.2020 passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench), by which an application filed by the Appellant under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (in short 'Rules'), alleging that the Corporate Debtor has defaulted in making payment to the extent of Rs. 165,19,44,297/-, has been dismissed, solely on the ground that the Application filed under Section 7 of the Code, on the basis of the Reserve Bank of India (RBI) Circular dated 12.02.2018, which has since been set aside as ultra-virus of the provisions of the Banking Regulation Act by the Hon'ble Supreme Court in the case of Dharani Sugars & Chemicals Ltd vs Union of India & Ors. (2019) 5 SCC
480. Shorn of the unnecessary details, Counsel for the Appellant has submitted that the application filed under Section 7 of the Code was not based upon the RBI Circular dated 12.02.2018 because it does not apply to the facts of the present case. It is submitted that as per the timelines provided for large accounts to be referred under the IBC, the aggregate exposure of the lenders has to be Rs. 20 billion and above, on or after March 1,2018. It is submitted that since the exposure of the lenders is not Rs. 20 billion and above on the date mentioned hereinabove, therefore, the RBI Circular dated 12.02.2018 does not apply. He has further submitted that this issue had earlier been raked up in the matter of CA (AT) (Ins) No. 260 of 2020, which was answered in favour of Applicant/Appellant vide order dated 07.09.2020 by three Members Bench of this Appellate Tribunal that the RBI Circular would apply to an amount of Rs. 2000 Crores and above and not below the same.
Counsel for the Respondent has been fair enough to concede that for the time being the aforesaid decision dated 07.09.2020, in the matter of Punjab National Bank Vs. Mittal Corp Limited, is prevailing and there is no other decision in his favour to the contrary.
Since, the application filed under Section 7 of the Code by the present Applicant/Appellant was dismissed solely on the ground that it was based upon the RBI Circular dated 12.02.2018 which has been set aside as non- est by the Hon'ble Supreme Court in the case of Dharani Sugars And Chemicals Ltd (Supra), but in view of the decision of this Appellate Tribunal in Punjab National Bank (Supra) the RBI Circular is not applicable to the facts of the present case, therefore, the decision rendered by the Adjudicating Authority is patently erroneous and illegal and the same is, thus, hereby set aside and the matter is remanded back to the Adjudicating Authority to consider the application filed under Section 7 of the Code and decide the same in accordance with law. Since, we have not touched the merits of the case, therefore, both the parties may raise all the issues available to them before the Adjudicating Authority pertaining to the merits of this case and the Adjudicating Authority shall make all endeavours to decide the lis between the parties as early as possible but not beyond the period of three months from the date of appearance of the parties before it.
The parties are directed to appear before the Adjudicating Authority on 22nd July, 2022.
The Registry is directed to send a copy of this order to the concerned Adjudicating Authority forthwith.
[Justice Rakesh Kumar Jain] Member (Judicial) [Dr. Alok Srivastava] Member (Technical) Sheetal/rr