National Company Law Appellate Tribunal
Niraj Jha vs Enkay (India) Rubber Co Pvt Ltd on 6 January, 2022
Author: Ashok Bhushan
Bench: Ashok Bhushan
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW
DELHI
Company Appeal (AT) (Insolvency) Nos.198 & 199 of 2021
In the matter of
Niraj Jha ... Appellant
S/o Shri A.K. Jha,
R/O 2/8, II Floor,
Rana Pratap Bagh, New Delhi.
Versus
Enkay (India) Rubber Co. Pvt. Ltd. ...Respondent No.1
B-3, S.M.A Industrial Estate, GT Karnal Road, Delhi.
Shri Rajiv Malik ... Respondent No. 2 Resolution Professional now Liquidator B-7/18, Miawali Nagar, Paschim Vihar, Delhi-110087.
Present For Appellant: Mr. Harish Katyal, Advocate For Respondent: Mr. Saurabh Kalia and Mr. Siddharth Tandon, Advocates for R-2, Mr. Rajeev Malik, (Liquidator in person) Ms. Amita Kumari, Mr. Gurmeet Bindra, Advocates for HDFC Bank.
Company Appeal (AT) (Insolvency) Nos.198 & 199 of 2021 Page 1 of 9 Judgment (Date: 06.01.2022) (Virtual Mode) {Per: Dr.Alok Srivastava, Member (T)}
1. The Appellant has filed two appeals, viz. CA (AT) (INS) 198/2021 assailing the order dated 4.11.2020 (Impugned Order
1) and CA (AT)(INS) 199/2021 assailing the order dated 26.9.2019, both passed in CA-1326(PB)/2019 in CP (IB) 1493(PB)/2018.
2. The order dated 26.9.2019 passed in CA-1326(PB)/2019, passed by the Adjudicating Authority, includes the following:-
"Mr. Neeraj Jha shall hand over the custody of vehicle nos. UK 07 BU 0008 - Range Rover, UK 16C 0001 - Porsche, DL 2CAT 7722 - Range Rover EVOQUE 5 DR to the Resolution Professional within one week and affidavit to that effect be filed."
3. The relevant portion in order dated 4.11.2020 passed in CA-1326(PB)/2019 is as follows:-
"...With regard to the order dated 26.09.2019, this bench passed in CA-1326/2019 held that R3 (Mr. Neeraj Jha)shall handover the custody of the vehicles to the RP within one week and affidavit to that effect be filed and shall supply Company Appeal (AT) (Insolvency) Nos.198 & 199 of 2021 Page 2 of 9 remaining documents, information that RP need along with detailed memorandum and the same shall be sent to each one of the respondents.
Against this order dated 26.09.2019, R3 has filed a Review Application under Rule 11 r/w 154 of NCLT Rules, but no stay has been granted over the order dated 26.09.2019.
At threshold it is pertinent to mention that review power has not been given to NCLT either in the Companies Act, Company Rules or under IBC therefore, if any party is aggrieved of any of the orders passed by this bench, the respective party ought to have filed an appeal before Hon'ble NCLAT but not have sought review of the order, therefore review of the order, therefore Review Application is hereby dismissed as misconceived.
Since the Liquidator has categorically mentioned this order has been passed against R3 alone and this order till date has neither been appealed and not obtained stay against the said order, it shall be construed that the order dated 26.09.2019 is not complied with."
4. The Appellant has stated in the appeal and the Ld. Counsel of Appellant has argued that the Appellant worked as a Director the Corporate Debtor M/s. Sumer Processor Private Limited and helped the Corporate Debtor in procuring funding and financial assistance relating to the business of the corporate debtor. He has added that the Corporate Debtor provided him with two vehicles viz. Jaguar Land Rover (Registration No. DL 2 CAT 7722) and Porsche Car (Registration No. UK 07 BU 0008) for use in his capacity as director. The Jaguar Land Rover vehicle was Company Appeal (AT) (Insolvency) Nos.198 & 199 of 2021 Page 3 of 9 hypothecated to ICICI Bank and Porsche car was hypothecated to HDFC Bank, and instalments were paid by the Corporate Debtor. The Ld. Counsel of Appellant has further stated that since the Corporate Debtor was unable to pay regular EMIs for the two vehicles, he asked the Corporate Debtor in August, 2018to get the vehicles transferred in his name, as he agreed to settle the loans with respective banks.
5. The Ld. Counsel for Appellant has further stated that in October 2018, Company Petition No. 1493 (PB)/2018 was filed against the Corporate Debtor for insolvency resolution and CIRP was initiated on 15.4.2019 (Rejoinder of Appellant, pg. 12). It is the Appellant's case that since he had settled the loans in respect of two vehicles and the ownership was transferred in his name, he is not liable to hand over the vehicles to the Resolution Professional as they were no longer assets of the Corporate Debtor. The Appellant has claimed to have later sold the two vehicles bearing registration no. UK 07 BU 0008 and registration no. DL 2 CAT 7722 to Shri Anil Bhati after receiving a sum of Rs.6,51,000/- (Rupees Six Lakhs and Fifty One Thousand only) in cash on 19.9.2019.
Company Appeal (AT) (Insolvency) Nos.198 & 199 of 2021 Page 4 of 9
6. In the appeal memo the Appellant has made many allegations against the two other Directors of the Corporate Debtor, which are not relevant to these appeals and hence are not being considered in this judgment.
7. In his reply, the Ld. Counsel of Respondent No. 2 (Liquidator) has stated that the Appellant did not challenge the order dated 26.9.2019 of the Adjudicating Authority within the stipulated limitation period and hence it has become final. He has argued that the ground of Appellant's challenge of orders dated 04.11.2020 is not tenable as this order is only about seeking police assistance in implementation of order dated 26.9.2019 which has assumed finality.
8. He has further argued that the Appellant was whole-time director of the Corporate Debtor since 10.10.2014 and was provided three vehicles, viz. UK 07 BU 0008 (Jaguar Land Rover), UK 16C 0001 and Porsche car (Registration No. DL 2 CAT 7722) as detailed in paras 2 and 3 of the liquidator's reply (Dy. No. 28837 dated 12.8.2021) for official use. He has further stated that the Appellant has claimed to sell two vehicles (which are the subject matter of order dated 26.09.2019) to one Mr. Anil Bhati Company Appeal (AT) (Insolvency) Nos.198 & 199 of 2021 Page 5 of 9 for raising funds to pay third parties, but since such the sale was done during the corporate insolvency resolution process, it violates condition of moratorium during which period transfer of Corporate Debtor's asset is prohibited. Therefore, the then Resolution Profession obtained order dated 26.9.2019 from the Adjudicating Authority to get custody of vehicles which were owned by the corporate debtor but were in possession of the Appellant.
9. We note that the order dated 26.9.2019 was passed by the Ld. Adjudicating Authority at the request of the then Resolution Professional directing the Appellant to hand over the custody of three vehicles to the Resolution Professional. It is not disputed that the Appellant preferred this appeal against the order dated 26.09.2019, over 460 days after the expiry of limitation.
10. The Appellant has tried to explain the delay in filing the appeal by claiming that he first filed an application before the Adjudicating Authority for review of the order dated 26.9.2019. This review application was disposed off vide order dated 4.11.2020, inter alia, holding that the review application was misconceived since there was no provision in IBC for review of an Company Appeal (AT) (Insolvency) Nos.198 & 199 of 2021 Page 6 of 9 order of Adjudicating Authority. It is also seen that the order dated 4.11.2020 passed by the Adjudicating Authority in CA- 1326(PB)/2019 is only about seeking the assistance of Commissioner of Police for locating the said vehicles. The Adjudicating Authority has itself noted that since the order dated 26.9.2019 has neither been appealed against nor any stay has been obtained against the said order, it is understood that order dated 26.9.2019 has not been complied with. Thus, the order dated 4.11.2020 is not a substantive order, but only an order seeking help of police authorities for locating the vehicles. The substantive order dated 26.9.2019 has assumed finality, as has been noted by us earlier. The contention of the Appellant that he filed a review application under rule 11 read with Section 154 of NCLAT Rules and hence he waited for an order on this application before filing the appeal is not tenable. It is amply clear that there is no provision of review under the IBC and hence a misconceived review application cannot provide relaxation in limitation to the Appellant.
11. On a perusal of the order dated 4.11.2020 in CA - 1326/2019 (pp.33-34 of Appeal Paperbook) the following is recorded therein:
Company Appeal (AT) (Insolvency) Nos.198 & 199 of 2021 Page 7 of 9 "Against this order dated 26.09.2019 R3 has filed a Review Application under Rule 11 r/w 154 of NCLT Rules, but no stay has been granted over the order dated 26.09.2019."
12. Thus it is clear that the Appellant Niraj Jha had knowledge of the order dated 26.09.2019. His claim that he could appeal against the said order only after receipt of its copy on 12.02.2021 does not appear convincing. Hence, even if we are to give him benefit of the litigation period while he was prosecuting the Review Application under Rule 11 before the Adjudicating Authority, he should have appealed against the order dated 26.9.2019 within 30 days (with an extended period of total 45 days from 04.11.2020. This extended period of limitation would expire on 19.12.2020 by which time this appeal should have been filed. This appeal was actually filed on 01.02.2021 which is much after the expiry of the extended period of limitation. Moreover, the Appellant has not explained in any cogent manner the delay of over 40 days in filing this appeal. Hence, even after adopting liberal approach in calculating limitation, we do not find the appeal to be filed within limitation period. Company Appeal (AT) (Insolvency) Nos.198 & 199 of 2021 Page 8 of 9
13. Since the appeal is found to be barred by limitation, we do not consider it necessary to go into other issues raised by the Appellant relating to transfer of ownership of the said vehicles.
14. The appeals are dismissed as they are found to be barred by limitation. Resultantly, the Appellant shall comply with the order dated 26.9.2019 passed by the Adjudicating Authority, so that the insolvency resolution/liquidation of the Corporate Debtor may be completed at the earliest. No order as to costs.
(Justice Ashok Bhushan) Chairperson (Dr. Alok Srivastava) Member (Technical) New Delhi 6th January, 2022 /aks/ Company Appeal (AT) (Insolvency) Nos.198 & 199 of 2021 Page 9 of 9