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Judgment
O R D E R
Per: Justice Rakesh Kumar Jain:
This order shall dispose of I.A. No. 1178 of 2023 which has bee filed invoking Rule 11 of the NCLAT Rules, 2016 (in short ‘Rules’) for recalling of the judgment dated 16.10.2023 passed in CA (AT) (Ins) No. 184 of 2023 by which the appeal filed by the Appellant was dismissed.
In brief, State Bank of India (Financial Creditor) filed an application under Section 7 of Insolvency and Bankruptcy Code, 2016 (in short ‘Code’) r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (in short ‘Rules, 2016’) against Vibha Agro Tech Limited (Corporate Debtor) for the resolution of an amount of Rs. 327,03,72,501.81/-. This application bearing CP (IB) No. 645/7/HDB/2018 was dismissed by the Adjudicating Authority vide order dated 27.02.2020 on the ground of limitation.
The aforesaid order dated 27.02.2020 was challenged by the Financial Creditor by way of an appeal bearing CA (AT) (Ins) No. 636 of 2020 before this Tribunal which too met the same fate on 05.03.2021.
The Financial Creditor filed Civil Appeal No. 2264 of 2021 against the order dated 05.03.2021. The Hon’ble Supreme Court, vide its order dated 20.10.2021, allowed the appeal. The operative part of the order is reproduced as under:-
“We are of the view that subject to the appellant being put to terms, the course adopted by this Court in Asset Reconstruction Company (India) Limited (supra) should be followed. Accordingly, we allow the appeal and set aside the impugned order. The appeal is remanded back and will be restored back to file.
We permit the appellant to seek amendment of the application under Section 7 so as to incorporate the case based on acknowledgement as contained in the balance sheets allegedly of the respondent.
We leave open all contentions available to the respondent. This benefit will be available to the appellant subject to the appellant paying a sum of Rs.3 lakhs as costs to the respondent within a period of three weeks from today.
The appeal is allowed as above.
We make it clear that the questions relating to the case set up by the appellant relating to the acknowledgement flowing from MRA dated 26.09.2013 and OTS dated 19.06.2015shall not be revisited.”
By virtue of the aforesaid order, the appeal was remanded back to the Appellate Tribunal and permission was granted to seek amendment of the application under Section 7 of the Code,to incorporate the facts of acknowledgment as contained in the balance sheets, allegedly of the Appellant herein. It is stated that the Financial Creditor filed an application for amendment by a memo before the Adjudicating Authority at Hyderabad in terms of the aforesaid order of the Hon’ble Supreme Court and also filed an application bearing I.A No. 87 of 2022 in CA (AT) (Ins) No. 636 of 2020 before this Tribunal which was restored in terms of the order of the Hon’ble Supreme Court. I.A. No. 87 of 2022 was allowed on 11.01.2022 with the following order:-
“Heard the Learned Counsel Mr. V.M. Kannan appearing for the Appellant/Bank.
According to the Learned Counsel for the Appellant/SBI, the instant I.A. No. 87 of 2022 in CA (AT) (Ins) No. 636 of 2020 is filed pursuant to the orders of the Hon’ble Supreme Court in Civil Appeal No. 2264 of 2021 in the matter of ‘State Bank of India v Vibha Agro Tech Ltd.’ dated 20.10.2021 whereby and whereunder the Appellant/Applicant/Bank is permitted to file the amendment application and accordingly, the instant application is filed seeking to amend the application under Section 7 of the I & B Code, 2016 filed by the Appellant/Applicant/Bank with a view to incorporate the case based on ‘Acknowledgment’ as contained in the Balance Sheet allegedly of the Respondent.
There is no representation on the side of Respondent at the time of calling of the matter.
In view of the fact that the Hon’ble Supreme Court in the aforesaid Civil Appeal No. 2264 of 2021 dated 20.10.2021 has permitted the Applicant/Appellant/Bank to amend the application under Section 7 of the I & B Code, 2016 so as to incorporate the case based on acknowledgment as contained in the Balance Sheet purportedly of the Respondent, this ‘Tribunal’ in the interest of justice allows the I.A. No. 87 of 2022 in CA (AT) (Ins) No. 636 of 2020. No costs.
Consequent to the allowing of I.A. No. 87 of 2022 in CA (AT) (Ins) No. 636 of 2020, the Respondent is permitted to file ‘Additional Reply’ if any if it so desires/advised before the Office of the Registry not only through e-filing but also through the hard copy and the copy of the same shall be exchanged between them well in advance before the next date of Hearing.
The Registry is directed to list the matter on 07th March, 2022.”
Thereafter, the appeal was also allowed on 23.08.2022, the order dated 27.02.2020 passed by the Adjudicating Authority was set aside and the matter was remanded back to reconsider the amended application filed under Section 7 of the Code at the instance of the Appellant.
After remand, the Adjudicating Authority passed the order of admission of the application on 05.06.2023 which was further challenged by the Appellant in appeal i.e. CA (AT) (Ins) No. 184 of 2023. This appeal was dismissed on 16.10.2023. The present application has been filed for recalling of the order dated 16.10.2023 passed in CA (AT) (Ins) No. 184 of 2023 only on the ground that the order dated 11.01.2022 was obtained by the Respondent by playing fraud. Counsel for the Appellant has submitted that though the Hon’ble Supreme Court, vide its order, granted permission to amend the application under Section 7 of the Code, the application should have been filed before the Adjudicating Authority but it had been filed before this Tribunal bearing I.A. No. 87 of 2022. It is argued that Counsel appearing on behalf of the Appellant has fraudulently submitted before this Court that the application i.e. I.A. No. 87 of 2022 has been filed in pursuance of the order of the Hon’ble Supreme Court before this Tribunal whereby permission was granted to amend the application filed under Section 7 to incorporate the case based on acknowledgement as contained in the balance sheets. It is also submitted that I.A. No. 87 of 2022 could not have been filed as the Financial Creditor had filed an application before the Adjudicating Authority. It is submitted that the fraud vitiates allacts and the proceedings and relied upon a decision of the Hon’ble Supreme Court reported as (2007) 4 SCC 221 and a judgment of the Hon’ble Patna High Court reported as AIR 1970 Pat 13.
On the other hand, Counsel appearing on behalf of the Respondent has submitted that it is a case where the application for resolution was filed for an amount of Rs. 327,03,72,501.81/- by the Bank which was initially dismissed by the Adjudicating Authority on the ground of limitation and the order was upheld by this Tribunal but the Hon’ble Supreme Court set aside the order of this Tribunal and remanded the appeal back to this Tribunal and restored the same, permitting the financial creditors (Bank) to file an application to amend Section 7 application to add pleadings regarding acknowledgment of the debt in the balance sheet of the Corporate Debtor. It is submitted that the said application was allowed on 11.01.2022. At that time, the applicant herein, who was the Respondent in that application did not appear and even did not challenge the order dated 11.01.2022 by way of an appeal though it was amenable to appeal in terms of Section 62 of the Code. Ultimately, the appeali.e. CA (AT) (Ins) No. 636 of 2020 was allowed on 23.08.2022. The said order was also not challenged. The matter was remanded back by order dated 23.08.2022 and the Adjudicating Authority passed the order of admission on 05.06.2023 against which the appeal i.e. CA (AT) (Ins) No. 184 of 2023 was filed and dismissed by this Tribunal on 16.10.2023. It is thus submitted that firstly there is no fraud as alleged and secondly the applicant seems to be crying on the split milk. It is further submitted that judgments relied upon by the Appellant are not applicable to the facts and circumstances of the present case.
We have heard Counsel for the parties and perused the record with their able assistance.
The facts narrated hereinabove are all borne out from the record and need not to be repeated but the fact remains that while allowing the appeal, the Hon’ble Supreme Court has remanded the appeal and restored the same to this Tribunal and permitted the present Respondent (FC) to make amendment in the application filed under Section 7 of the Code. It is no where mentioned by the Hon’ble Supreme Court that the application had to be filed before the Adjudicating Authority. Since, the matter was pending before the Adjudicating Authority at that time, after restoration of the appeal by the Hon’ble Supreme Court, the application has rightly been filed before this Tribunal for seeking amendment in Section 7 application. In so far as, the allegation of the Applicant that some application was also filed before the Adjudicating Authority for amendment, firstly, it was only a memo and secondly, no proceedings were pending at that time before the Adjudicating Authority, therefore, the application has rightly been filed before this Tribunal where the proceedings were pending and there is no error in the statement made by Counsel which has been recorded in the order dated 11.01.2022 which is sought to be labelled as fraudulent. As a matter of fact, the application under Section 7 was admitted on 05.06.2023 which was further challenged by the present applicant by way of an appeal i.e. CA (AT) (Ins) No. 184 of 2023 and dismissed with a detailed order on 16.10.2023, therefore, the only recourse available to the Appellant is to challenge the order dated 16.10.2023 by way of further appeal but in so far as the recalling application is concerned, it is totally misconceived and the same is thus hereby dismissed. No costs.