TaxTMI 
TaxTMI 
2021 (8) TMI 1133
X X X X Extracts X X X X
X X X X Extracts X X X X
....dvocate with Mr. Arijit Mazumdar, Mr. Shambo Nandy, Advocates for R-2. Mr. Joy Saha, Senior Advocate with Mr. Aishwarya Kumar Awasthi, Advocate for R-3. Mr. Ramji Srinivasan, Senior Advocate with Mr. Raunak Dhillon, Ms. Rajshree Chaudhary, Mr. Shivkrit Rai, Advocates in Impleadment Application. JUDGMENT { Per: Dr. Alok Srivastava, Member (T) } 1. This judgment relates to two appeals viz. Company Appeal (AT)(Ins) No. 800 of 2020 and Company Appeal (AT)(Ins) No. 892 of 2020, both filed assailing the Impugned Order dated 12.8.2020 in IA (IB) No. 602/KB/2020 in CP(IB) No.767 of 2020 of the Adjudicating Authority (National Company Law Tribunal, Kolkata)and both appeals are filed under Section 61 of the Insolvency and Bankruptcy Code (hereinafter called IBC). Company Appeal (AT) (Ins.) No. 800 of 2020 is filed by Rishima SA Investments LLC (hereinafter called Rishima) against Respondents Sarga Hotel Private Limited (hereinafter called Sarga Hotel), Shristi Infrastructure Development Corporation Ltd. (hereinafter called SIDCL) and Applicant-Operational Creditor of Application u/s 9 of IBC Universal International Creation Ltd. (hereinafter called UICL). Company Appeal (AT)(Ins.) N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion with the International Chambers of Commerce. A partial award was given by the Arbitral Tribunal in favour of Rishima on 30.04.2019 wherein SIDCL was directed to pay a certain amount to Rishima and further required Rishima to transfer its shareholding in the corporate debtor to SIDCL. After this award, on a petition filed by Rishima, the Hon'ble Delhi High Court passed interim order in OMP (EFA) Comm. No. 5 of 2019 restraining SIDCL and Sarga Hotel from creating any third-party interest in the hotel or parting with its possession. The Hon'ble Supreme Court confirmed the restraint order on 19.7.2020. Further, final Arbitral Award dated 12.7.2020 was also given in favour of Rishima and the execution of the arbitral award is pending. 6. It is further argued by the Ld. Counsel for Rishima that SIDCL filed a petition under Sections 241 & 242 of the Companies Act, alleging oppression and mismanagement by nominee Directors of Rishima (who are on the Board of the corporate debtor Sarga Hotel) which was dismissed. SIDCL's challenge to Partial Arbitral Award before the ICC was also dismissed. 7. The Ld. Counsel for Rishima has alleged that in this background a fraudulent applicatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....which is part of the Kanoria Group of companies of which SIDCL is also a part, and this is another pointer to collusion between corporate debtor and SIDCL. 10. The Learned Counsel for SIDCL (Respondent No.2 in Company Appeal 800 of 2020) has stated that a hotel by the name of Westin is run by corporate debtor Sarga Hotel in which the Appellant Rishima and SIDCL are shareholders. He has stated that SIDCL is aggrieved by the impugned order but vehemently denies the allegation of SIDCL's collusion with the other respondents and hence opposes any initiation of proceedings against SIDCL under section 65 of IBC as the issue regarding action under Section 65 is to be raised before the Adjudicating Authority and not before the Appellate Tribunal in the first instance. He has also claimed that the default in the payment by the Corporate Debtor Sarga Hotel Pvt. Limited pertain to the invoices of the years 2014 to 2016 and any exchange of letters between the operational creditor and corporate debtor cannot be taken to extend the period of limitation, and hence the application u/s 9 is barred by limitation. 11. The Ld. Counsel for SIDCL has further urged that the impugned order should be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....el for the Intervener Yes Bank, who has prayed vide IA no. 289 of 2020 to be impleaded as a party being a financial creditor in one of the appeals. He has urged that the stay order of this tribunal dated 21.09.2020 be vacated and the appeal be dismissed so that the Committee of Creditors can function and CIRP proceed in accordance with the admission order. Thus all the parties in both appeals viz. CA (AT) 800 of 2020 and CA (AT) 892 of 2020 and Yes Bank, which has sought intervention, were heard by us. 17. The issue to be seen in these appeals is whether the Section 9 application is legally maintainable in view of the claim that documents are of doubtful origin annexed with the application, and whether the Section 9 application is within limitation. In addition, it is also to be seen whether the Adjudicating Authority adopted a legally sustainable and sound procedure of providing sufficient opportunity to the corporate debtor which is required by the principle of natural justice to put up a proper defence before passing the Impugned Order. 18. The Appellant Rishima has raised doubt about the veracity and authenticity of the documents attached with the demand notice dated 19.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... It is difficult to make out what these statements convey and hence we cannot rely on them to provide any admission/existence of debt and date of part payment by the corporate debtor. 23. In the light of the above discussion, we can, at best, take the date of default as 23.1.2016, which is the date of the last invoice produced by the operational creditor, if we give the benefit of doubt regarding the authenticity of the related invoice. Since the application under Section 9 was made on 21.7.2020, we do not find that the application was made before the Adjudicating Authority within limitation period as required under law. 24. Insofar as the allegation of Appellant Rishima (in CA (AT)(Ins) No. 800of 2020) regarding the reliability of the purported authorized representative of UICL Rabindra Kumar Jha is concerned, we have perused documents submitted by the operational creditor such as the board resolution authorizing Rabindra Kumar Jha and the Letter of Authority. 25. The purported board resolution dated 15.12.2017 adopted by the Board of Directors of UICL which is Hong Kong based (attached at pg. 57, Reply of Respondent No. 3 UICL in CA(AT)(Ins) No. 800 of 2020, Dy. No. 2316....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the events as they unfolded show the haste and alacrity with which the matter as serious as initiating CIRP against a 'going concern' was dealt with, without any regard to natural justice. 28. It would, therefore, not be far-fetched to infer that the corporate debtor appeared to be itself keen and waiting for admission of Section 9 application and initiation of CIRP against itself. 29. The Adjudicating Authority, without obtaining a full and proper reply from the corporate debtor, proceeded to admit the application due to admission of Corporate Debtor, under section 9 and declare moratorium under section 14 of the IBC on the assets of the corporate debtor without weighing credibility of Authority of person filing application and without examining documents to consider if claim was in limitation. . Holding the debt to be within limitation on the basis of an unreliable and unverified ledger record (attached at pg. 118, Reply of Respondent No. 3 operational Creditor UICL in CA (AT) No. 800 of 2020) is erroneous finding in the Impugned Order. 30. The Ld. Counsel of Appellant Rishima has submitted the judgments of Hon'ble Supreme Court in the following cases: (i) BK Education....