TaxTMI 
TaxTMI 
2022 (1) TMI 720
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.... Authority' (National Company Law Tribunal), New Delhi (Court No.IV ) in Company Petition No. IB- 699/ND/2019. 2. The Adjudicating Authority while passing the 'Impugned Order' dated 24.05.2021 in Company Petition No. IB- 699/ND/2019 had, inter alia, observed the following at para 14 to 20:- "14.That in the present case, the date of default was mentioned as the date of declaration of NPA as 02.12.2016. In view of the quashing of the declaration of the account of the corporate debtor as NPA, the date of default now can be considered as date of default as recorded in the certificate of information utility services which is 03.09.2016. The application is filed on12.03.2019, which is well within the period of limitation and not barred by law. 15.The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application. 16. The Applicant is entitled to claim its dues, establishing the default in payment of the financial debt beyond doubt. The application is complete hence in the light of above facts and records the present application is admitted. 17. The Applicant has proposed ....
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.... No.1 Company. The Respondent No.2 (R2) was incorporated in the year 1998 and was functioning as 100% export oriental manufacturing unit engaged in manufacturing of conventional men's wear, comprising of jackets, trousers and coats and he was supplied to leading brands of the Company across the world. Their turnover is approx. Rs. 76 Crore and is having net profit of the 15% of the turnover. The R1- Bank has unlawfully and illegally declared the Respondent companies account as 'Non-Performing Asset' (NPA) on 02.12.2016 and initiated proceedings under the Securitisation and Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 (for short SARFAESI Act, 2002). It is also submitted by the Appellants that on their petition under Section 17 of the SARFAESI Act, 2002 in SA No.91/2017 dated 20.03.2018, the 'Presiding Officer, DRT-II Delhi' has passed the following orders: "20. As seen from the above factual and legal position, the security applicants have established from the Statement of Account that the account was wrongly notified as NPA on 02.12.2016 and, as such, the entire action initiated by the Respondent Bank is vitiated and by the wrong declar....
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.... Code deals with 'Debt' and 'Default' even dispute does not come within its domain and have cited the judgment of Hon'ble Apex Court in 'Laxmi Pat Surana Vs. Union Bank of India' 2021 SCC Online SC 267. It has been stated by the R1 that it is clearly established by the report of the 'Information Utility' that the date of default is 03.09.2016. The report of the 'Information Utility' is one of the evidences that can be used by the Bank/ Financial Creditor to prove the existence of default. The application has been filed on 12.03.2019 within a period of 3 years as required under Section 7 of the Code R/w Article 137 of the Limitation Act. The NPA is only for the purpose of SARFAESI Act, 2002 and the same has nothing to do with the proceedings under the Code. The proceedings under the Code and SARFAESI Act, 2002 are independent and separate proceedings. The Adjudicating Authority has rightly held that they are concerned only with 'default'. The Appellants is nowhere confirming that they have not committed any default or that no amount is due and payable under law. If 'debt' is legally due and payable and 'default' has been committed, the provisions of the Code get triggered and have a....
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....rmed in the above stated order that the default has not been committed and no amount is due and payable. What it has done, it has set aside the classification of the NPA only for the purpose of the SARFAESI Act and the said order is under challenge in an appeal before the DRAT. e. It is a settled law that default is committed first and second stage comes as NPA, if it is not regularized in between the period of default and within 90 days thereafter. In order to bring clarity and brevity on the subject Section 3(11), Section 3(12), Section 5(7), Section 5(8) and Section 7 of the Code is reproduced below for brevity and clarity: "Section 3(11) - "debt" means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt; Section 3(12) "default" means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the corporate debtor, as the case may be; Section 5(7) -"financial creditor" means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred....
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....ution process against a corporate debtor before the Adjudicating Authority when a default has occurred. [Provided that for the financial creditors, referred to in clauses (a) and (b) of sub-section (6A) of section 21, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent. of the total number of such creditors in the same class, whichever is less: Provided further that for financial creditors who are allottees under a real estate project, an application for initiating corporate insolvency resolution process against the corporate debtor shall be filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten per cent. of the total number of such allottees under the same real estate project, whichever is less: Provided also that where an application for initiating the corporate insolvency resolution process against a corporate debtor has been filed by a financial creditor referred to in the first and second provisos and has not been admitted by t....
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....the Adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5). (7) The Adjudicating Authority shall communicate- (a) the order under clause (a) of sub-section (5) to the financial creditor and the corporate debtor; (b) the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be." f. From the above, it is very much clear that Code is a complete Act itself. What Section 7 of the Code requires that a Financial Creditor by filing an application in the requisite format can initiate CIRP against the CD when a Debt is due and payable in law and has not been paid and a default has occurred, the Adjudicating Authority is to initiate CIRP if, he finds default recorded in the Information Utility or evidence of default. So, the criteria for initiation of the CIRP under the Code is limited to three things, (i) there is a debt due and payable in law and has not been paid (ii)Default has occurred (iii) Default is recorded with the Information Utility. Here all the thr....
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....standing Amount Amount Overdue Days past due (DPD) Account Closed Flag Rate of Interest Repayment frequency Lending arrangement PC 5,80,80,208.00 5,80,80,208.00 970 No NULL Others CONSORTIUM Default Information Date of default Total Outstanding Default amount Days past due Amount of last repayment Date of last repayment 03-09-2016 5,80,80,208.00 5,80,80,208.00 970 26,04,385.00 15-09-2006 4. Record of communication with respect to the default filing Communication details in respect of M/s DHIR GLOBAL INDUSTRIA PVT.LTD. (debtor) DHIR GLOBAL INDUSTRIA PVT.LTD. (debtor) Email Communication Email category Mall Type Requested To Address Mail Status On Acknowledge ment Date/Time Initial .co.in 17 May 2019 noemail@pnb Pending Friday 18:51:47 PM N.A. Initial Thursday 15:20:11 PM com 12 December ca_pawancha Mail 2019 dha@hotmail. Delivered to Addressee 12 December 2019 Thursday 15:24:13 PM Initial 12 December ca_pawancha Mail 2019 Thursday com 13 December 2019 Friday 16:50:08 PM 16:24:48 PM ....