Bombay High Court
Indusind Bank Limited vs Shreeniwas @ Agarwal on 16 July, 2019
Author: R.I. Chagla
Bench: R.I. Chagla
07-IDA-01-18 IN INPT-138-04.doc
V.B.Gokhale
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
IN INSOLVENCY JURISDICTION
INSOLVENCY DISCHARGE APPLICATION NO. 01 OF 2018
IN
INSOLVENCY PETITION NO. 138 OF 2004
Indusind Bank Limited. ...Petitioning
Creditor
Versus
Shreeniwas Heeralal Agarwal ...Insolvents.
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Simil Purohit a/w. Gauraj Shah a/w. Smita Bhosale a/w.
Amir Ali Sheikh I/b. I. V. Merchant & Co. for
Applicants/Insolvents.
Adv. Anil D'Souza I/b. Adv. Rubina Khan for Petitioning
Creditor Indusind Bank.
Mr. E. B. Shivkumar, Duputy O. A. present.
Mrs. S. A. Pagedar, 1st Asst. O. A. present.
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CORAM : R.I. CHAGLA J.
DATE : 16th July, 2019
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07-IDA-01-18 IN INPT-138-04.doc
ORDER :
1. After having heard the learned counsel for the applicant for considerable length of time, in so far as, the application seeking discharge of the applicant as an insolvent on the ground that the applicant having fully co-operated with the official assignee of this Court and the creditors during private and public examination which have thereafter been closed, permission has been sought by the learned counsel for the petitioning creditor to file a reply to the discharge application. This reply of the petitioning creditor is stated to be necessary as the petitioning creditor relies upon an FIR filed on 14/11/2002 wherein it is claimed that an offence had been committed by the applicant under various sections of Indian Penal Code. In para 10 of the O.A. Report dated 08/02/2019 it had been observed that, according to the insolvent he has neither committed any offence under the provisions of the Presidency Town Insolvency Act, 1909, or under sections 421 to 424 of the Indian Penal Code, nor they have done any act or thing or omitted to do anything contrary to the provisions of Section 39(2) of the 2/6 ::: Uploaded on - 18/07/2019 ::: Downloaded on - 18/07/2019 23:17:48 ::: 07-IDA-01-18 IN INPT-138-04.doc Presidency Towns Insolvency Act, 1909. It is submitted by the learned counsel for the petitioning creditor that this statement of the official assignee in the O. A. Report is based on what the insolvent had stated and that in view of the FIR filed in 2002, it would be necessary for a reply to be filed to oppose the discharge application. Further, the official assignee has in the Report observed that the insolvents are not having any asset of a value equal to four annas in a rupee based on verification of the Sheet "H" i.e. deficiency statement annexed to the schedule of Assets and Liabilities. The insolvent has declared therein that they have given personal guarantee to various financial institutions being the Directors of the companies and they have not personally borrowed any amount from them. This justification according to the learned counsel for the petitioning creditor is inadequate. The Learned counsel for the petitioning creditor further states that although the official assignee is of the opinion that the facts mentioned under Section 39(2), sub section (a) and (e) of the Presidency Towns Insolvency Act, 1909 exist in this case, it would be necessary for the court to be 3/6 ::: Uploaded on - 18/07/2019 ::: Downloaded on - 18/07/2019 23:17:48 ::: 07-IDA-01-18 IN INPT-138-04.doc satisfied after hearing the petitioning creditor.
2. The permission to file Reply which is sought for on behalf of the petitioning creditor is objected to by the learned counsel for the applicant who relies on the Judgment of the Bombay High Court in Lav Chadha and another Vs. SICOM Ltd., Mumbai1. The Bombay High Court has held that the application for further public examination of the insolvent should be made prior to the discharge application being filed by the applicant. The discharge application in the present case was filed way back on 11/05/2018 and the notice under Section 40 of the said Act was issued to the petitioning creditor on 15/01/2019 and despite which the petitioning creditor had not thought it fit to file a reply to the application and has now belatedly sought permission to file reply.
3. In my view, this court would necessarily have to go into the issue as to whether sub section 2 of section 39 of the Act has been complied with given the opposition of the petitioning 1 2016 (5) Mh.L.J.417 4/6 ::: Uploaded on - 18/07/2019 ::: Downloaded on - 18/07/2019 23:17:48 ::: 07-IDA-01-18 IN INPT-138-04.doc creditor to the discharge application. Further, whether the insolvents' assets not being of value equal to 25 paise in a rupee has arisen from circumstances for which the applicant/insolvent cannot be justly responsible, would also necessarily have to be gone into by this Court. The Judgment of the Bombay High Court in Lav Chadha (supra) has held that the court in the event of not being satisfied with the fact that the assets not being of such value has arisen from circumstances for which the Insolvent cannot be justly held responsible, has the option to either refuse the discharge or suspend the discharge for a specified time or suspend the discharge until a dividend of not less than twenty five paise in a rupee has been paid to the creditors etc. This satisfaction will thus necessarily have to be arrived at prior to allowing the discharge application.
4. Accordingly, the petitioning creditor is granted liberty to file an affidavit in reply to the discharge application which shall be filed within a period of two weeks from the date of this order. It is noted that the Official Assignee in the O. A. Report has 5/6 ::: Uploaded on - 18/07/2019 ::: Downloaded on - 18/07/2019 23:17:48 ::: 07-IDA-01-18 IN INPT-138-04.doc submitted to the orders of this court.
5. The applicant is also granted permission to file an affidavit in re-joinder to the affidavit in reply as and when served upon the applicant by the petitioning creditor. This shall be filed within a period of one week of the applicant being served with the affidavit in reply filed by the petitioning creditor.
6. List the discharge application High on Board on 20/08/2019.
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