Dr. Arabinda Kumar Rath vs India SME Asset Reconstruction Company Ltd. & Anr.

Heard Shri Ganesh Ch. Pandey, Learned Counsel appearing for the Appellant.

This Appeal has been filed against the order dated 08.12.2021 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench-II by which order petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“Code” for short) filed by the Respondent No.1 has been admitted. Application at the earlier round was rejected by the Adjudicating Authority against which an Appeal was filed in this Appellate Tribunal which Appeal was allowed by judgment and order dated 19.12.2018. Against which order, Appellant before us has filed a Civil Appeal No. 8289 of 2019 before the Hon’ble Supreme Court which was dismissed by judgment dated 08.11.2019. The matter was thereafter taken by the Adjudicating Authority again and by the impugned judgment the Application under Section 7 has been admitted.

Learned Counsel for the Appellant challenging the order of the Adjudicating Authority has made two submissions. He submits that the assignment on the basis of which the Application was filed by the Respondents was under challenge before the High Court of Orissa in W.P. (C) No. 17155/2019 where an interim order was passed by the High Court on 17.04.2019. Hence, assignee could not have filed Application under Section 7. He further submits that although this Tribunal rejected the submissions of the Appellant that Application was barred by time but against the said judgment Appeal was filed before the Hon’ble Supreme Court and the Hon’ble Supreme Court had granted liberty to file objection to Appellant which objection were raised but has not been considered by the Adjudicating Authority. He further submits that there were efforts at earlier stages to settle the matter with the Bank which did not fructified any useful order. It is submitted that efforts were made for settlement in the year 2010-2019 but no settlement could be arrived at.

We have considered the submissions of the Learned Counsel for the Appellant and perused the record.

Insofar as the submissions of the Learned Counsel for the Appellant that assignment in favour of the Respondent No.1 who was Applicant before the Adjudicating Authority was under challenge in W.P. (C) No. 17155/2019, the order passed by the High Court dated 17.04.2019 has been quoted by the Adjudicating Authority in its impugned judgment which is to the following effect:-

The only interim order granted by the High Court was that no coercive action shall be taken against the petitioner till the next listing. The said order cannot be read to mean that assignment in favour of the Respondent was stayed by the High Court. Thus, we do not find any illegality in filing Application by Respondent No.1 under Section 7. Thus, the said submission does not help the Appellant.

Now, the second submissions of the Counsel for the Appellant is that objections were raised by the Appellant regarding question of limitation in pursuance of the liberty granted by the Hon’ble Supreme Court on 08.11.2019 which has not been considered on merits by the Adjudicating Authority. As noted above, the Application under Section 7 was earlier rejected by the Adjudicating Authority against which the Appeal was filed before this Tribunal. This Tribunal vide its judgment dated 19.12.2018 had allowed the Application filed by the Respondent No.1 and held that Application was not barred by time. The question of limitation was answered in favour of Respondent No.1 against which Appeal No. 8289 of 2019 was filed by the present Appellant. The order of the Hon’ble Supreme Court dated 08.11.2019 in Civil Appeal No(s). 8289/2019 has also been extracted by the Adjudicating Authority in its order, which is to the following effect:-

The Appeal was dismissed by the Hon’ble Supreme Court affirming the judgment of this Appellate Tribunal meaning thereby the view of the Appellate Tribunal that Application is not barred by time was upheld. The fact that liberty was granted to raise certain objections by the Appellant cannot be read to mean that Appellant was permitted to re-agitate the question of limitation again before the Adjudicating Authority which had become final. We thus, do not find any substance in the submission that objection of limitation could have been raised by the Appellant before the Adjudicating Authority. The question of limitation has become final between the parties since judgment of this Appellate Tribunal was affirmed by the Hon’ble Supreme Court.

Now coming to the submission of the Learned Counsel for that Appellant that efforts were made by the Appellant for settlement with the Bank, it is always open for the Appellant to settle the matter and file an appropriate Application under Section 12A before the Adjudicating Authority, who if satisfies, can always consider the Application and pass appropriate order.

We do not find any merit in this Appeal. The Appeal is dismissed.