Delhi High Court
Nimit Mahajan vs Indian Bank (Erstwhile Allahabad Bank) ... on 14 May, 2024
$~109 to112
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 14th May, 2024
+ W.P.(C) 6864/2024 & CM APPL. 28644/2024, CM APPL.
28645/2024, CM APPL. 28646/2024
SAMIKSHA MAHAJAN ..... Petitioner
Through: Mr. Abhinav Mukharji, Sr. Advocate
with Mr. Nakul Mohta, Mr. Vinayak
Bhandari, Ms. Vidhi Gupta, Ms. Riya
Dhingra, Mr. Jaisal Singh and Ms.
Teesta Mishra, Advocates
Mob: 9810896389
Email: [email protected]
versus
INDIAN BANK & ANR. ..... Respondents
Through: Mr. Rajesh Kumar Gautam, Mr.
Anant Gautam, Ms. Anani Achumi,
Mr. Dinesh Sharma, Ms. Shivani
Sagar, Ms. Likivi Jakhalu, Advocates
Email: [email protected]
Mob: 9383392499
110
+ W.P.(C) 6865/2024 & CM APPL. 28648/2024, CM APPL.
28649/2024, CM APPL. 28650/2024
BRIJ MOHAN MAHAJAN ..... Petitioner
Through: Mr. Abhinav Mukharji, Sr. Advocate
with Mr. Nakul Mohta, Ms. Misha
Rohatgi Mohta, Ms. Vidhi Gupta and
Ms. Riya Dhingra, Advocates.
Mob: 8447391962
Email: [email protected]
Signature Not Verified
Digitally Signed By:CHARU W.P.(C) 6864/2024 & other connected matters Page 1 of 13
CHAUDHARY
Signing Date:27.05.2024
13:01:45
versus
INDIAN BANK (ERSTWHILE ALLAHABAD BANK) & ANR.
..... Respondents
Through: Mr. Rajesh Kumar Gautam, Mr.
Anant Gautam, Ms. Anani Achumi,
Mr. Dinesh Sharma, Ms. Shivani
Sagar, Ms. Likivi Jakhalu, Advocates
Email: [email protected]
Mob: 9383392499
111
+ W.P.(C) 6866/2024 & CM APPL. 28651/2024, CM APPL.
28652/2024, CM APPL. 28653/2024
SANJEEV MAHAJAN ..... Petitioner
Through: Mr. Abhinav Mukharji, Sr. Advocate
with Mr. Nakul Mohta, Ms. Vidhi
Gupta and Ms. Riya Dhingra,
Advocates.
Mob: 9810896389
Email: [email protected]
versus
INDIAN BANK (ERSTWHILE ALLAHABAD BANK) & ANR.
..... Respondents
Through: Mr. Rajesh Kumar Gautam, Mr.
Anant Gautam, Ms. Anani Achumi,
Mr. Dinesh Sharma, Ms. Shivani
Sagar, Ms. Likivi Jakhalu, Advocates
Email: [email protected]
Mob: 9383392499
112
+ W.P.(C) 6867/2024 & CM APPL. 28656/2024, CM APPL.
28657/2024, CM APPL. 28658/2024
NIMIT MAHAJAN ..... Petitioner
Through: Mr. Abhinav Mukharji, Sr. Advocate
Signature Not Verified
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CHAUDHARY
Signing Date:27.05.2024
13:01:45
with Mr. Nakul Mohta, Mr. Amulya,
Mr. Anurag Singh, Mr. Zain. A.
Khan, Ms. Vidhi Gupta and Ms. Riya
Dhingra, Advocates.
Mob: 9807498297
Email: [email protected]
versus
INDIAN BANK (ERSTWHILE ALLAHABAD BANK) & ANR.
..... Respondents
Through: Mr. Rajesh Kumar Gautam, Mr.
Anant Gautam, Ms. Anani Achumi,
Mr. Dinesh Sharma, Ms. Shivani
Sagar, Ms. Likivi Jakhalu, Advocates
Email: [email protected]
Mob: 9383392499
CORAM:
HON'BLE MS. JUSTICE MINI PUSHKARNA
MINI PUSHKARNA, J: (ORAL)
CM APPL. 28645/2024 &CM APPL. 28646/2024, CM APPL.
28649/2024, CM APPL. 28650/2024, CM APPL. 28652/2024, CM APPL.
28653/2024, CM APPL. 28657/2024, CM APPL. 28658/2024 (For
Exemptions)
1. Exemptions allowed, subject to just exceptions.
2. Applications are disposed of.
W.P.(C) 6864/2024 & CM APPL. 28644/2024
W.P.(C) 6865/2024 & CM APPL. 28648/2024
W.P.(C) 6866/2024 & CM APPL. 28651/2024
W.P.(C) 6867/2024 & CM APPL. 28656/2024
3. The present petitions have been filed by the petitioners, who are the
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CHAUDHARY
Signing Date:27.05.2024
13:01:45
personal guarantors to the Corporate Debtor. The present petitions challenge
the order dated 07th May, 2024 passed by the learned Adjudicating
Authority, i.e., National Company Law Tribunal ("NCLT") in C.P.(IB) No.
490/ND/2023, and other connected matters, whereby, the learned
Adjudicating Authority has appointed a Resolution Professional ("RP")
upon an application under Section 95 of the Insolvency and Bankruptcy
Code ("IBC"), 2016, in personal insolvency proceedings initiated against the
petitioners, i.e., the personal guarantors .
4. Learned Senior Counsel appearing for the petitioners submits that the
impugned order is a non-speaking, un-reasoned order, and has been passed
without any application of mind. It is submitted that the impugned order has
been passed without dealing with the preliminary objections of the
petitioners on the maintainability of the Section 95 IBC application, on the
ground that the said application was ex-facie time barred, and thus, not
maintainable. It is submitted that the impugned order does not deal with the
pleadings and as well as the arguments made on behalf of the petitioners and
the judgments cited by the petitioners.
4.1 It is submitted that the right to sue accrues only from the date of
default. In the present case, the insolvency proceedings initiated against the
petitioners are barred by limitation, in terms of Article 137 of the Schedule
of the Limitation Act, 1963.
4.2 Learned Senior Counsel appearing for the petitioners has drawn the
attention of this Court to the fact that in the Section 95 IBC Application filed
before the NCLT itself, the respondent-bank has clearly specified that the
date of default is 31st August, 2014. Thus, it is submitted that by virtue of
Article 137 of the Limitation Act, the said application filed before the NCLT
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CHAUDHARY
Signing Date:27.05.2024
13:01:45
is barred by limitation.
4.3 Learned Senior Counsel appearing for the petitioners submits that the
present case is covered by the decision of the High Court of Odisha in the
case of Sandeep Jajodia Versus IDBI Bank, in W.P.(C) No. 49/2022,
wherein, the order passed by the learned Adjudicating Authority therein
under Section 95 of the IBC, by which Insolvency Resolution Professional
had been appointed, was set aside on the ground of being time barred. Thus,
it is submitted that the said judgment by the Odisha High Court is squarely
applicable to the present petition, and the present writ petition would be
maintainable before this Court.
4.4 It is further submitted that the judgment of Supreme Court dated 09 th
November, 2023 passed in W.P.(C) No. 1281/2021, in the case of Dilip B.
Jiwarika Versus Union of India and Others, as relied by the learned
Adjudicating Authority in the impugned order, is not applicable to the facts
and circumstances of the present case. It is submitted that the Supreme Court
has merely observed in the said case that the issues such as existence of a
creditor-debtor relationship, and whether the debt is outstanding or settled,
need not be looked into at the stage of appointing RP. Thus, he submits that
the said judgment does not state that the issue of limitation cannot be looked
into or that Section 3 of the Limitation Act, 1963 ("Limitation Act") is not
applicable at the stage, where the Adjudicating Authority is discharging its
functions under Section 95 of IBC. Thus, it is submitted that the learned
Adjudicating Authority is not precluded from looking into the issue of
limitation as a foundational issue at this stage.
4.5 Learned Senior Counsel appearing for the petitioners further submits
that the petitioners have no alternate efficacious remedy under the IBC, in as
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CHAUDHARY
Signing Date:27.05.2024
13:01:45
much as, the impugned order has been passed in Section 95 proceedings
initiated under Part III of the IBC. He submits that the provision for appeal
under the IBC, i.e., Section 61, falls under Part II of the IBC. Thus, he
submits that in view of Section 61 of the IBC, 2016, no appeal can be filed
by the petitioners before the National Company Law Appellate Tribunal
("NCLAT"), against an order passed under Section 95 of the IBC.
4.6 Learned Senior Counsel appearing for the petitioners has also relied
upon the judgment in the case of Gaurav Hargovindbhai Dave Versus
Asset Reconstruction Company (India) Limited and Another, (2019) 10
SCC 572, to contend that the Supreme Court has categorically held that
Article 137 of the Limitation Act, shall be applicable to the proceedings
under the IBC. Thus, it submitted that the said issue of limitation, which was
raised on behalf of the petitioners before the learned Adjudicating Authority,
ought to have been considered by the said Authority. It is submitted that the
impugned order dated 07th May, 2024 is bad in law, as the plea of the
petitioners on the aspect of limitation and application under Section 95 of
the IBC not being maintainable against the petitioners herein, was not
considered by the learned Adjudicating Authority.
4.7 Learned Senior Counsel further relies upon the order dated 10 th April,
2024 passed by the NCLT, Ahmedabad in the case of Mrs. Laxmidevi
Ansukumar Baid Versus ICICI Bank, in C.P.(IB) No. 145/AHM/2024, to
submit that even at the stage of appointment of RP, various objections as
raised by the personal guarantors have been entertained, which has not been
done in the impugned order passed by the learned Adjudicating Authority, in
the present case.
4.8 Learned Senior Counsel also relies upon the judgment in the case of
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CHAUDHARY
Signing Date:27.05.2024
13:01:45
Babulal Vardharji Gurjar Versus Veer Gurjar Aluminium Industries
Private Limited and Another, (2020) 15 SCC 1, to submit that mere One
Time Settlement ("OTS") or entry in the balance sheet, will not be deemed
to be an acknowledgement, and cannot be considered for the purposes of
extending the period of limitation.
4.9 Learned Senior Counsel further relies upon the judgment in the case
of Godrej Sara Lee Ltd. Versus Excise and Taxation Officer-cum-
Assessing Authority and Others, (2023) SCC OnLine SC 95, to state that
merely because an alternative remedy is available, it cannot be held that the
writ petition is not maintainable before High Court, and that the High Court
has the power to issue prerogative writs under Article 226 of the
Constitution, in cases where an alternate remedy is available.
5. Per contra, learned counsel appearing for the respondent no.1/Indian
Bank submits that no doubt that Article 137 of the Limitation Act will be
applicable even in IBC proceedings, however, in present cases, the
proceedings initiated by the respondent-bank are within limitation.
5.1 He submits that the proceedings against the Corporate Debtor are
pending before the NCLT since the year 2019, being (IB)-1913(ND)/2019.
5.2 He further submits that the petitioners, being the personal guarantors,
have submitted eight OTS proposals. Thus, it is submitted that when the
corporate liability is persisting, the liability of the petitioners as personal
guarantors, will also subsist.
5.3 Learned counsel for respondent no.1-bank has further relied upon the
Revival Letter dated 30th October, 2018, which has been given by the
personal guarantor. Thus, it is submitted that the limitation period of three
years will begin from this day, i.e. 30th October, 2018. He further submits
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CHAUDHARY
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13:01:45
that by counting three years from 30th October, 2018, the period of limitation
is till 30th October, 2021. He further relies upon the judgment of the
Supreme Court in the case of Suo Moto Writ Petition 3/2020, whereby, the
Supreme Court had excluded the period from 15 th March, 2021 till 20th
March, 2022, from the limitation period. Thus, learned counsel appearing
for the respondent submits that till 15th March, 2020, when the period of
limitation was suspended by virtue of the order of the Supreme Court in the
aforesaid case, the limitation period of only one year five months and fifteen
days was over, in respect of the present cases. He submits that after 28th
February, 2022, the remaining period of limitation which the respondents
had, was one year seven months. Therefore, the respondents had time till
20th September, 2023 to file Section 95 IBC applications against the
petitioners.
5.4 He further draws the attention of this Court to the demand notice
dated 04th February, 2023, which was issued against the petitioners. Thus, he
submits that the Section 95 IBC application, which was filed on 15th July,
2023, was within the period of limitation.
5.5 He has also drawn the attention of this Court to the deed of personal
guarantee dated 22nd March, 2019, which is part of the documents that have
been filed under Section 95 IBC application, before the NCLT.
5.6 Learned Counsel has also relied upon the revised Settlement Proposal
Letter dated 21st March, 2023 submitted by the corporate debtor, which has
been signed by Mr. Sanjeev Mahajan, one of the personal guarantors, who is
one of the petitioners before this Court. By referring to the said revised
proposal, it is submitted that it has been admitted that part-payments have
been made to the respondent-bank.
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CHAUDHARY
Signing Date:27.05.2024
13:01:45
5.7 He further submits that, thus, there is acknowledgment of debt by the
petitioners from time to time. Since the corporate liability still exists, the
liability of the petitioners, being personal guarantors, is co-extensive with
the liability of the corporate debtor.
5.8 Learned counsel appearing for the respondents further disputes the
submission made by learned Senior Counsel for the petitioners that no
efficacious remedy is available to the petitioners. He submits that the
petitioners have efficacious remedy to file an appeal under Section 421 of
the Companies Act, 2013 before the National Company Law Appellate
Tribunal ("NCLAT"). He submits that as far as Corporate Debtor is
concerned, an appeal can be filed under Section 61 of the IBC, however, the
personal guarantors have the right to file an appeal under Section 421 of the
Companies Act, 2013 before the NCLAT. Thus, it is submitted that the
petitioners have an alternative efficacious remedy of filing the appeal before
the NCLAT, and that the present petition would not be maintainable.
5.9 Learned counsel for the respondents further submits that there are
subsequent judgments passed by the Supreme Court, wherein, the Supreme
Court has categorically held, that OTS and entry in the balance sheets, will
be considered as an admission, by the debtor or a guarantor. For this
purpose, he relies upon the judgment dated 04th August, 2021 passed in C.A.
No. 1650/2020, titled as Dena Bank Versus C. Shiva Kumar Reddy and
Another.
6. At this stage, learned Senior Counsel, appearing for the petitioners
submits, that he would be satisfied, if directions are issued to the learned
Adjudicating Authority of the NCLT, to consider all the issues that have
been raised by the petitioners with respect to limitation, in the first instance.
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CHAUDHARY
Signing Date:27.05.2024
13:01:45
7. For this purpose learned Senior Counsel relies upon the order dated
23rd August, 2023 passed by the NCLT, which reads as under:
―IN THE NATIONAL COMPANY LAW TRIBUNAL: NEW DELHI
SPECIAL BENCH (COURT - II)
Item No.-302
IB-490/ND/2023
IN THE MATTER OF:
Indian Bank .....Applicant/Petitioner
Vs.
Smt. Samiksha Mahajan .....Respondent
Under Section: 95(1) of IBC, 2016
Order delivered on 23.08.2023
CORAM:
SH. ASHOK KUMAR BHARDWAJ, SH. L. N. GUPTA,
HON'BLE MEMBER (J) HON'BLE MEMBER (T)
PRESENT:
For the Applicant : Adv. Kanishka Pandey (Proxy) for Reema
Khurana
For the Respondent : Sr. Adv. P. Nagesh, Adv. Zain & Adv.
Nakul Mohta
ORDER
Mr. P. Nagesh, Ld. Senior Counsel appearing on behalf of the PG submitted that an advance copy of the petition has not been served upon the Personal Guarantor and therefore, the petition is not maintainable. Confronted with the plea, the Ld. Proxy Counsel appearing for the Applicant prayed for a short adjournment. At his request, the hearing in the captioned petition is deferred to 26.09.2023.
List on 26.09.2023.
Sd/- Sd/-
(L. N. GUPTA) (ASHOK KUMAR BHARDWAJ)
MEMBER (T) MEMBER (J)"
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CHAUDHARY
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8. By relying upon the aforesaid order, he submits that the NCLT itself has been going into the issue of maintainability of the petition. He further submits that even the NCLT, Ahmedabad, in the case of Mrs. Laxmidevi Anusukumar Baid (Supra), had dealt with various preliminary issues, at the time of appointment of the RP.
9. He again refers to the order dated 10th April, 2024, passed by the NCLT, Ahmedabad in the case of Mrs. Laxmidevi Anusukumar Baid (Supra), relevant portions of which read as under:
―xxx xxx xxx
3. However, the Applicant has filed copy of the Demand Notice dated 07.06.2023 issued by the Respondent/ICICI Bank U/s 13(2) of SARFAESI Act, 2002 and Possession Notice dated 20.09.2023 issued U/s 13(4) of SARFAESI Act, 2002 read with Rule 8(1) of the Security Interest (Enforcement) Rules, 2002 which are annexed as Annexure-D and E with the application.
4. On perusal of these notices issued by the Respondent/ICICI Bank, it is observed that said notices are issued only for the purpose of enforcing security interest and not to invoke any Personal Guarantee.
5. The learned Counsel for the Applicant may be right in his submission that by virtue of Demand Notice dated 07.06.2023 issued U/s 13(2) of the SARFAESI Act, 2002, the Applicant was also asked to make the payment of dues. But there is neither anything on record to show that any other notice has been issued by Respondent Bank to the Applicant in the capacity of Personal Guarantor to invoke the Personal Guarantee nor any steps have been taken by the Respondent Bank to recover the dues from the Applicant by sale of personal assets except secured assets.
6. The Hon'ble NCLAT in its decision in the matter of Amanjyot Singh Vs. Navneet Kumar Jain & Ors. (Company Appeal (AT) (Insolvency) No. 961 of 2022) has upheld the view taken by NCLT, Delhi dismissing an application filed by the Appellant under section 94. The relevant para of the said order is reproduced below:-
―7. Notice under Section 13, sub-section (2) is issued by the Bank for enforcing the security interest. Section 13, sub-section (1) and (2) of the SARFAESI Act is as follows:-Signature Not Verified Digitally Signed By:CHARU W.P.(C) 6864/2024 & other connected matters Page 11 of 13 CHAUDHARY Signing Date:27.05.2024 13:01:45
"13. Enforcement of security interest.--(1) Notwithstanding anything contained in section 69 or section 69A of the Transfer of Property Act, 1882 (4 of 1882), any security interest created in favour of any secured creditor may be enforced, without the intervention of the court or tribunal, by such creditor in accordance with the provisions of this Act.
(2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-
section (4).
Provided that--
(i) the requirement of classification of secured debt as non- performing asset under this subsection shall not apply to a borrower who has raised funds through issue of debt securities; and
(ii) in the event of default, the debenture trustee shall be entitled to enforce security interest in the same manner as provided under this section with such modifications as may be necessary and in accordance with the terms and conditions of Company Appeal (AT) (Insolvency) No. 961 of 2022 6 security documents executed in favour of the debenture trustee."
8. The definition of 'borrower' given in SARFAESI Act under Section-2 (f) is wide enough to include a Guarantor also. Section 13 is for enforcement of security interest. The borrower within the meaning of Section 13, subsection (2) shall obviously include the Guarantor also. .........
12. We, thus, are satisfied that foundation which was laid down by the Appellant for initiating the CIRP against the Appellant, was not sufficient to admit Section 94 Application and initiate the CIRP against the Appellant. We may further notice that Section 10 Application against the Corporate Debtor has already been admitted and CIRP against the Corporate Debtor had been initiated. The case taken up by the Bank being categorical and Signature Not Verified Digitally Signed By:CHARU W.P.(C) 6864/2024 & other connected matters Page 12 of 13 CHAUDHARY Signing Date:27.05.2024 13:01:45 clear that no steps have been taken by the Bank against the Appellant, there is no cause for the Appellant to pray for initiation of CIRP against the Appellant - the Personal Guarantor. We, thus, do not find any good ground to interfere with the impugned order in this Appeal. The Appeal is accordingly dismissed. No costs.‖
7. In the present case no document is annexed with the application which suggests that guarantee is invoked by the Respondent Bank. Therefore, by looking at the facts of the present case and relying on the decision of Hon'ble NCLAT supra we are of the view that the present application is filed without any cause and is premature. Hence, CP/IB/145/AHM/2024 stands dismissed with liberty.‖
10. Considering the submissions made before this Court, and without interfering with the impugned order dated 07th May, 2024, wherein, RP has been appointed, the matter is remanded back to the NCLT, to consider the various objections raised by the petitioners on the aspect of limitation and maintainability of the Section 95 IBC application, filed by the respondent no.1 herein, before the NCLT.
11. Rights and contentions of both the parties are left open, which shall be considered by the learned Adjudicating Authority of the NCLT, on its merits.
12. It is clarified that this Court has not made any observation on the merits of the submissions made by any of the parties. It is further clarified that the proceedings before the NCLT, shall continue.
13. With the aforesaid directions, the present petitions are disposed of, along with the pending applications.
MINI PUSHKARNA, J MAY 14, 2024/kr Signature Not Verified Digitally Signed By:CHARU W.P.(C) 6864/2024 & other connected matters Page 13 of 13 CHAUDHARY Signing Date:27.05.2024 13:01:45