TaxTMI 
TaxTMI 
2022 (1) TMI 321
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....e Debtor M/s Margra Industries Ltd. and vide order dated 10.11.2020 dismissed the Suspended Director's Application CA No. 307 of 2020 seeking recall of the admission order dated 15.03.2019, against these orders the Appeals are filed. 2. Brief and relevant facts of these Appeals are that Ld. Adjudicating Authority vide order dated 15.03.2019 admitted the Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) filed by the Edelweiss Asset Reconstruction Company Ltd. (R-1) against the M/s Margra Industries Ltd. (Corporate Debtor) and Mr. Rajendra Kr. Girdhar was appointed as Interim Resolution Professional (IRP) and moratorium was declared in terms of the Section 14 of the IBC. The Admission order was challenged by the Suspended-director (Vineet Khosla) of the Corporate Debtor before this Appellate Tribunal in CA (AT) (Ins) No. 441 of 2019. The Appeal was dismissed on merits vide order dated 06.09.2019. 3. On receipt of claims and their verification/collation, the Committee of Creditors (COC) was constituted by the IRP on 24.04.2019. The CoC in its first meeting held on 30.04.2019 resolved for appointment of IRP Rajendra Kumar as RP. During the process of C....
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....liquidation of Corporate Debtor. Now the Admission order on the ground of limitation cannot be recalled. Thus, by the impugned order dated 10.11.2020 the Application is dismissed. 7. Being aggrieved with the order of liquidation and dismissal of Application for recall of admission order, the Appellant has filed present Appeals. Submission in CA (AT) (Ins) No. 1125 of 2020. 8. Ld. Sr. Counsel for the Appellant submitted that the Adjudicating Authority is competent to recall its admission order dated 15.03.2019. The same is obtained by playing fraud and misrepresentation that the Application under Section 7 of IBC is within limitation. Ld. Adjudicating Authority has failed to consider this aspect of the matter. 9. Ld. Sr. counsel for the Appellant cited the Judgment of Hon'ble Supreme Court in the case of United India Insurance Co. Ltd. Vs. Rajendra Singh &Ors. AIR 2000 SC 1165 and AV Papayya Sastry Vs. Government of A.P. AIR 2007 SC 1546 and argued that every court/tribunal has power to recall its order which is obtained by practicing fruad. 10. Ld. Sr. Counsel for the Appellant further submitted that the Section 7 Petition is apparently time barred, the date of defau....
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....eliance on the Judgments of Hon'ble Supreme Court in the case of Gojer Bros. Pvt. Ltd. Vs. Ratan Lal Singh Civil Appeal No. 128 of 1972, dated 01.05.1972 Para 9 and 11, Kunhayammed and Ors. Vs. State of Kerla and Ors. C.A. No. 12309 of 1996 Para 42 and 44(1) and Apya Captial Services Pvt. Ltd. Vs. Guardian Homes Pvt. Ltd. I.A. No. 2068 of 2021 in CA (AT) (Ins) No. 412 of 2020, dated 09.12.2021 Para 1, 10 to 13, 15. 14. It is also submitted that the powers under section 420 of the Companies Act, 2013 for rectifying any mistake apparent from the record or amend any order can be exercised within two years when the order against which no Appeal has been preferred. In this matter, the Appeal has already been decided by this Appellate Tribunal. Therefore, the Adjudicating Authority cannot exercise the powers under Section 420 of the Companies Act. 15. Ld. Sr. Counsel for the Respondent No. 1 also submitted that the Appellant has an efficacious remedy to challenge the Judgment of this Appellate Tribunal by which upheld the order of admission before the Hon'ble Supreme Court under Section 62 of the IBC. No reason has been assigned as to why the Appeal has not filed before the Hon'ble....
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.... of CIRP against the Corporate Debtor. This order was affirmed by this Appellate Tribunal in CA (AT) (Ins) No. 441 of 2019 vide order dated 06.09.2019. Even in extended period of CIRP no resolution plan was received. Therefore, with the direction of CoC, the RP has filed an Application C.A. No. 121 of 2020 under Section 33(1) for liquidation of the Corporate Debtor. Ld. Adjudicating Authority vide order dated 15.10.2020 allowed the Application. Meanwhile, the Suspended director filed an Application CA No. 307 of 2020 seeking recall of the order dated 15.03.2019 i.e. order of initiation of CIRP. According to the Appellant the order dated 15.03.2019 obtained by fraud and misrepresentation as in the Petition the date of default was falsely made to get petition within limitation. Therefore, the order which is obtained by fraud can be challenged at any stage and the every court and tribunal has power to recall such order. In support they have cited the Judgment of Hon'ble Supreme Court in the case of United India Insurance Co. Ltd. Vs. Rajendra Singh & Ors. (Supra) and AV Papayya Sastry (Supra). Hon'ble Supreme Court in the subsequent Judgment has referred the earlier Judgment of United....
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....t and non est and cannot be allowed to stand. This is the fundamental principle of law and needs no further elaboration. Therefore, it has been said that a judgment, decree or order obtained by fraud has to be treated as nullity, whether by the court of first instance or by the final court. Thus, we have to consider whether the Financial Creditor i.e. Respondent No. 1 has obtained the order dated 15.03.2019 by practicing fraud. Hon'ble Supreme court in the same Judgment at Para 26 defined the fraud which is as under:- 26. Fraud may be defined as an act of deliberate deception with the design of securing some unfair or undeserved benefit by taking undue advantage of another. In fraud one gains at the loss of another. Even most solemn proceedings stand vitiated if they are actuated by fraud. Fraud is thus an extrinsic collateral act which vitiates all judicial acts, whether in rem or in personam. The principle of 'finality of litigation' cannot be stretched to the extent of an absurdity that it can be utilized as an engine of oppression by dishonest and fraudulent litigants. 23. Now we have considered the allegations which are made in the Application filed by the ....
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....x R-4/Pg. 40 01.11.2014 & 17.03.2015 Letters dated 01.11.2014 & 17.03.2015 written by the Corporate Debtor to EARC seeking further extension of time for payment of the amount and offered payment of Rs. 50 lacs. Reply- Annex R-3/Pg. 37-38 15.05.2015 EARC letter dated 15.05.2015 granting extension upto 31.12.2015. Reply- Annex R-4/Pg. 41 15.05.2015 CD made the payment of the sum of Rs. 50.00 Lacs to EARC -Do- 01.12.2015 Letter of the CD dated 01.12.2015 requesting for a re-negotiated settlement at Rs. 4.50 Crore Reply- Annex R-5/Pg. 42-43 10.12.2015 Reply of EARC to the above letter dated 01.12.2015 turning down the above request. Reply- Annex R-6/Pg. 44 17.12.2015 Letter of the CD requesting EARC for a re-negotiated settlement of Rs. 5.15 Crore Reply- Annex R-7/Pg. 45 - 46 17.12.2015 Letter by EARC accepting the above settlement As per the re-negotiated settlement, upfront amount of Rs. 50.00 lacs was payable on or before 31.12.2015 and the balance of Rs. 4.65 crore was to be paid on or before 31.03.2016 CD failed to honour the above settlement Reply- Annex R-8/Pg. 47 27.02.2016 Letter of the CD assuring EARC that ....
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....ttled by the Hon'ble Supreme Court in the case of Gaurav Hargovindbahi Dave (Supra) decided on 18.09.2019. 29. We are unable to convince with the argument that Hon'ble Supreme Court on 18.09.2019 in the case of Jignesh Shah & Anr. (Supra) laid down that the provisions of Limitation Act would be applied to the IBC proceedings. Section 238-A of IBC inserted w.e.f. 06.06.2018 which provides that the provisions of Limitation Act shall, as far as may be, apply to the proceedings or Appeals before the Adjudicating Authority, the National Company Law Appellate Tribunal. Therefore, we find no force in the argument. 30. Admittedly, the issue of limitation is mixed question of fact and law, therefore, we are unable to convince with the argument of Ld. Sr. Counsel that such issue can be raised at any stage even before the Higher Court. 31. With the aforesaid discussion, we are of the view that in the facts of present case the Adjudicating Authority is not competent to recall the order of initiation of CIRP. Issue No. (ii) Whether the liquidation order suffers from material irregularity? 32. Admittedly, in this matter even after extended period beyond 180 days no resolution p....