National Company Law Appellate Tribunal
Erragam Sudhir Reddy vs State Bank Of India on 21 October, 2024
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
AT CHENNAI
(APPELLATE JURISDICTION)
IA No. 366 & 365/2023
In
Company Appeal (AT) (Ins) No. 102 of 2023
(IA No. 367 of 2023)
In the matter of:
Mr. Erragam Sudhir Reddy ...Appellant
V
State Bank of India & Anr. ...Respondents
Present :
For Appellant : Mr. Anant Merathia, Poornima Devi & Mr. Rishi
Srinivas, Advocates
For Respondent : Mr. M L Ganesh, Advocate
Mr. Maligi Madhusudhana, RP
ORDER
(Hybrid Mode) 21.10.2024:
The Company Appeal was e-filed on 16.02.2023, accompanied by an Application being IA No.366/2023 wherein the appellant has prayed for a Condonation of 15 days of delay. Apart from that, the Appeal has also be accompanied by another Application being IA No. 365/2023, where in the appellant has sought a Condonation of 36 days of delay, which has chanced in refiling the appeal.
The Appellant in principle has put a challenge to the Impugned Order dated 03.01.2023, as it was passed by the NCLT Hyderabad in CP (IB) No. 334/95/HDB/2020. The said order, permitting the proceedings to be drawn under section 95 as against the Appellant, was sought to be challenged on Comp. App. (AT) (CH) (Ins) No. 102/2023 Page 1 of 4 the grounds of as to whether the Respondent/Financial Creditor, State Bank of India, Stressed Asset Management branch had the locus stands to issue notice in Form B i.e. form of demand notice under rule 7(1) of The Insolvency and Bankruptcy (Application to Adjudicating Authority etc.,) Rules 2019 and subsequently to file application under section 95 of the Code against the Appellant on the basis of a Deed of Personal Guarantee dated 30.06.2014 and as to whether learned NCLT erred in admitting the applications without taking cognizance of several interim orders passed by Hon'ble Apex Court in similar personal insolvency proceedings. At the relevant point of time when the appeal was entertained calling for a Counter Affidavit, no reference was made by the Appellant's counsel with regards to the two pending applications which are listed today for orders, though backed by the anguish of the bench. As far as IA No.365/2023, preferred by the appellant is concerned, it seeks condonation of 36 days of delay in the re-
presentation of the appeal. Delay in re-presentation being an issue between the appellant and the Tribunal coupled with the reasons given in the application, the delay of 36 days which has chanced in the re-presentation of the appeal would stand condoned.
The appellant has also preferred IA No. 366/2023, seeking condonation of 15 days of delay, which has chanced in filing the appeal. In the application thus preferred by the appellant seeking condonation of 15 Comp. App. (AT) (CH) (Ins) No. 102/2023 Page 2 of 4 days of delay, the reason for delay has been detailed by the appellant in Para 9 of the appeal, the reason being that as per the legal opinion extended by the counsels, he was taking action to file requisite a Writ Petition, before the Hon'ble Supreme Court, post the passing of the Impugned Judgment and Order dated 13.01.2023 and as the question involved therein was in the nature of challenging order issued under section 100 of the code and involved substantial points of law he could not concentrate on preparing the Appeal to be filed with this Tribunal and hence delay of 15 days was caused in filing the Appeal. Having gone through the reasons given therein, since being exclusively based upon a legal issue, which was then the subject matter for consideration before the Hon'ble Apex Court at that relevant point of time, the delay of 15 days as it has chanced in preferring the appeal would hereby stand condoned.
When the appeal was argued on 20.04.2023 the Interim Order was granted by the Co-ordinate bench of this Tribunal on the ground of pendency of SLP(C)16464/2021 where an order was passed on 20.08.2021, granting an Interim Order to the effect that, in the meanwhile, "the appellant shall not transfer, alienate, encumber or dispose of any of the assets or his legal rights or beneficial interest therein and the Resolution Professionals shall not proceed with the filling of the Report. If the report has been filed the same cannot be acted upon." The gist of this Interim Order which was granted by Comp. App. (AT) (CH) (Ins) No. 102/2023 Page 3 of 4 the Hon'ble Apex Court on 20.08.2021, was taken as to be the basis for the Interim Order of 20.04.2023 of this Tribunal. The said issue where the propriety of section 95 was put to challenge before the Hon'ble Apex Court, has since been laid to rest by the Hon'ble Apex Court, with the dismissal of the Writ Petition, holding that the provisions contained under section 95 to section 100 of IBC, are not unconstitutional and not in violation of Article 14 to 21 of the Constitution of India. As a consequence of the aforesaid decision of 09.11.2023, in fact, the very question which was being argued by the appellant at the initial stage while putting a challenge to the Impugned Order has been laid to rest.
Owing to the fact of the decision taken by the Hon'ble Apex Court on 09.10.2023, the very basic ground for challenging the proceedings under section 95 no more survives. Hence, though we have condoned the delay, the Company Appeal (AT) (Ins) No. 102 of 2023 would stand dismissed, leaving all the contentions open to the appellant to be argued before the NCLT, where the principal proceedings of CP No.334/95/HDB/2020 is pending consideration.
[Justice Sharad Kumar Sharma] Member (Judicial) [Jatindranath Swain] Member (Technical) GK/TM/MS Comp. App. (AT) (CH) (Ins) No. 102/2023 Page 4 of 4