UCO Bank vs Rupinder Singh

(Hybrid Mode)

I.A. No. 4511 of 2026 in Comp. App. (AT) (Ins) No. 1179 of 2026

Heard Learned Counsel for the Appellant. Perused the record. Keeping in view the averments made in the application, we are of the considered view that the delay of 10 days which has occurred in refiling the appeal is explained and then the delay accessed in refiling is hereby condoned. The application stands allowed.

I.A. No. 4512 of 2026 in Comp. App. (AT) (Ins) No. 1191 of 2026 Heard Learned Counsel for the Appellant. Perused the record. Keeping in view the averments made in the application, we are of the considered view that the delay of 17 days which has occurred in refiling the appeal is explained and then the delay accessed in refiling is hereby condoned. The application stands allowed.

Comp. App. (AT) (Ins) No. 1179 of 2026 & Comp. App. (AT) (Ins) No. 1191 of 2026

Heard Learned Counsel for the Appellant and perused the record.

Both the aforesaid appeals Comp. App. (AT) (Ins) No. 1179 of 2026 and Comp. App. (AT) (Ins) No. 1191 of 2026 are being disposed of by passing this impugned order as the same are connected with the one and same proceeding pending before the Learned Adjudicating Authority.

Comp. App. (AT) (Ins) No. 1179 of 2026 has been filed against the order dated 17.04.2026 passed in I.A. No. 4511 of 2026 moved in Company Petition (IB) No. 643/ND/2025 and Comp. App. (AT) (Ins) No. 1191 of 2026 has been filed against the order dated 24.04.2026 passed by Learned Adjudicating Authority in the same proceedings.

Learned Counsel for the Appellant submits that, pursuant to a query raised by Learned Adjudicating Authority pertaining to placing on record any proof with regard to the invocation of guarantee, the Appellant was commanded to bring on record an affidavit and also to file a copy of the letter of invocation. However, the Appellant sought to withdraw the application moved under Section 95 of the Code, with the liberty to file a fresh application, and has requested for this prayer before the Learned Adjudicating Authority on 17.03.2026. However, Learned Adjudicating Authority did not grant any such liberty to the Appellant and imposed a cost of Rs. 50,000/- for non-compliance of the order dated 02-12-2025.

It is further submitted that another I.A. No. 1601 of 2026 was filed by the Appellant before the Learned Adjudicating Authority to waive the cost of Rs. 50,000/-, imposed vide order dated 17-03-2026, and also to permit the Appellant to withdraw the petition filed by it under Section 95 of the Code. However, by passing order dated 24-04-2026, instead of waiving the cost earlier imposed, the Learned Adjudicating Authority enhanced the same to Rs. 75,000/-.

Learned Counsel for the Appellant submits that, by passing order dated 02-12-2025, the Appellant was only directed to file a copy of the letter of invocation while the case of the Appellant was that by issuance of a demand notice, as provided under Regulation 7 of the IBBI (Bankruptcy Process for Personal Guarantors to Corporate Debtors) Regulations, 2019 invocation of guarantee has been made. However, instead of adjudicating this issue the insistence was made to comply the order dated 02-12.2025, and when a request was made by the Appellant to permit them to withdraw the application filed under Section 95 of the Code with the liberty to file a fresh petition the cost of Rs. 50,000/- was imposed, unnecessarily and when an application was moved to waive this cost the same was also rejected vide order dated 17-04-2026, and vide order dated 24-04-2026, the cost of Rs. 50,000/- has been further enhanced to Rs. 75,000/-.

It is further submitted that the Appellant is willing to withdraw the proceedings pending before the Learned Adjudicating Authority, with the liberty to file the fresh proceeding under Section 95 of the Code.

Keeping in view the order intended to be passed by us, we dispense with the issuance of notice to the Respondent, as the same would not affect their rights in any manner.

A perusal of the record reflects that, on 17-03-2026, following order was passed by the Learned Adjudicating Authority;

Thereafter, I.A being 1601 of 2026 was moved by the Appellant where on the first impugned order dated 17-04-2026, was passed which is also reproduced as under;

The record further reflects that on 24-04-2026 the Learned Adjudicating Authority has passed the following order;

If all the aforesaid orders passed by the Learned Adjudicating Authority are read conjointly, it will emerge that, at first direction was given by the Learned Adjudicating Authority to the Appellant on 02-12-2025, to file a copy of letter of invocation and it has been submitted by Learned Counsel for the Appellant, before us they were relying, so far as the invocation of guarantee is concerned, on the notice issued to the Respondent under Regulation 7 of the PG to CD Regulations 2019, and they have also sought the relief of withdrawal of the application moved under Section 95 of the Code with the liberty to file the fresh petition, however, instead of permitting them to withdraw the application, cost of Rs. 50,000/- was imposed which was later on enhanced to Rs. 75,000/-vide order dated 24-04-2026.

We are of the considered view that a petitioner who is approaching any court of law is a master of his plaint or petition and unless and until there is a legal defect which is required to be cured, he cannot be compelled to amend his pleadings in accordance with the wish and will of the court and since the Appellant had requested to consider their claim of invocation of guarantee in a particular way the same should have been considered by the Tribunal and the application filed by the Appellant should have been disposed in accordance with law. However, the Applicant/Appellants may not be compelled to amend their petition in a particular way against their will.

Secondly, when a sincere prayer of withdrawal of the proceedings has been made by the Appellants, though it was not mandatory on the part of the Learned Adjudicating Authority to accept the same, however, having regard to the practice prevalent in the courts of law, such liberty should have been granted, if the same was not causing any undue hardship to the other party.

Be that as it may in our considered opinion there was no occasion before the Learned Adjudicating Authority to have imposed the cost of Rs. 50,000/- on the Appellant and to further enhance it to Rs. 70,000/-.

It is to be recalled that the application before the Learned Adjudicating Authority was moved by a nationalised bank and no need to emphasise that banks are the custodians of the public money. Otherwise also the cost should not be imposed as the matter of routine unless and until there are exceptional cases. Simultaneously the Public Authorities and institutions, including Banks are also duty bound to follow the directions given by the courts with utmost sincerity and dedications and being public institutions they must comply the directions of the court with utmost diligence and sincerity.

Keeping in view all the facts and circumstances of the case, we are of the considered view that at first the cost of Rs. 50,000/- has been unnecessarily imposed by the Learned Adjudicating Authority vide order dated 17-03-2026, and without any basis has been further enhanced to Rs. 75,000/- vide another impugned order dated 24-04-2026. Resultantly both the impugned orders may not with stand the test of law and are liable to be set aside.

Having regard all the facts and circumstances of the case and for the reasons given hereinbefore, the impugned orders dated 17-03-2026 and 24-04.2026 are hereby set aside.

We provide an opportunity to the Appellant Bank to move an appropriate withdrawal application before the Learned Adjudicating Authority within 14 days from today. If such an application is filed within the period stipulated hereinbefore the Learned Adjudicating Authority would be under an obligation to pass an appropriate order strictly accordance with law after providing opportunity of being heard to the parties.

Both the appeals are thus allowed.

There is no order as to costs.

Pending I.A. if any are also disposed of.

Having regard to the mandatory recruitment of filing certified copy of the impugned order, we permit the Appellant to file certified copy of both the impugned orders before the Office of the Registry of this Appellate Tribunal within 30 days. In the event the certified copies are filed within the aforesaid period, the Office shall keep the same on record.