TaxTMI 
TaxTMI 
2022 (3) TMI 56
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.... Applicant/ Appellant were dismissed. Before we proceed to notice the contents of the Applicants and the grounds raised therein as well as averments in the Contempt Case, it is necessary to notice the sequence of the events leading to the judgment dated 07.01.2022 of this Tribunal passed in Company Appeal (AT) (Insolvency) Nos. 1124-1125 of 2020. (i) The Applicant- Vineet Khosla is the Suspended Director of the Corporate Debtor- 'M/s. Margra Industries Ltd.', a public company incorporated under the Companies Act, 1956. The Corporate Debtor availed loan facility from EXIM Bank in the year 1996. The Corporate Debtor committed default in repayment of the loan on 29.07.2000. The EXIM Bank, the lender filed O.A No. 177 of 2001 before the Debt Recovery Tribunal ("DRT" for short) for recovery of outstanding amount of Rs. 5.11 Crores. (ii) On 12.09.2011, the DRT in O.A No. 177 of 2001 issue certificate for recovery of sum of Rs. 6.58 Crores in favour of the EXIM Bank against the Corporate Debtor. (iii) The EXIM Bank on 02.01.2014 assigned its debt due to the Corporate Debtor in favour of 'Edelweiss Assets Reconstruction'. (iv) On 14.03.2014, letter was s....
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.....2020, the Suspended Director (Applicant herein) filed CA No. 307 of 2020 before the Adjudicating Authority praying for recall of the admission order dated 15.03.2019 on the grounds of fraud and lack of jurisdiction. (xii) The Adjudicating Authority by order dated 15.10.2020 allowed the CA No. 121 of 2020 and ordered for liquidation of the Corporate Debtor. (xiii) By order dated 10.11.2020, the Adjudicating Authority dismissed CA No. 307 of 2020 filed by the Suspended Director. 2. Aggrieved by the orders dated 10.11.2020 and 15.10.2020 passed by the Adjudicating Authority, Company Appeal (AT) (Ins.) No. 1124 & 1125 of 2020 was filed by the Applicant (Vineet Khosla) in this Tribunal. In Company Appeal (AT) (Ins.) Nos. 1124 & 1125 of 2020, notices were issued on 23.12.2020 by this Tribunal. Reply was filed by the Respondents to which Rejoinder-Affidavit was also filed by the Appellants. Company Appeal (AT) (Ins.) Nos. 1124 & 1125 of 2020 were finally heard and by judgment dated 07.01.2022 has been dismissed. After dismissal of the Company Appeal (AT) (Ins.) Nos. 1124 & 1125 of 2020, Appellant (Applicant) has also filed I.A Nos. 190, 191, 192 & 337 of 2022 in Comp....
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....rder obtained by practicing fraud on the Court can be recalled by any Court or Tribunal. It is well settled law laid down by the Hon'ble Supreme Court and reiterated in its several judgments. Elaborating his submissions, Learned Counsel for the Applicant referred to paras 13 and 24 of the judgment dated 07.01.2022. Learned Counsel for the Applicant submits that in the Application filed under Section 7 by the Respondent No.1, the date of default was being disclosed as 29.07.2000 and petition under Section 7 filed on 12.06.2018 was clearly barred by time and no documents were filed by the Respondent No.1 in support of extension of limitation under Section 18 of the Limitation Act. Referring to submissions of the Learned Counsel for Respondent No.1, as noticed in para 24 of the judgment, it is contended that Learned Counsel for Respondent No.1 submitted that the DRT has passed a decree on settlement of parties, thereafter, issued recovery certificate and thereafter time to time the Corporate Debtor has acknowledged the debt and in support, the Respondent No.1 has filed the documents to prove the acknowledgment. It is submitted by Counsel for the Applicant that although no documents we....
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....ry root of the matter and this Tribunal having misled on the representation of the Respondent No.1 that relevant documents regarding extension of limitation were filed in the Company Petition led to the judgment dismissing the Appeal on 07.01.2022 which deserves to be recalled since this Tribunal was completely deceived and misled. Learned Counsel for the Applicant states that submissions as made above of the Applicant are sufficient to initiate proceeding to punish the Respondents for committing Contempt of the Court as well as for initiating prosecution against the Respondent as prayed in the Contempt Application. 10. Shri Neeraj Malhotra, Learned Senior Counsel appearing for the Respondent No.1 refuting the submissions of the Counsel for the Applicant submits that the Applications filed by the Applicant are wholly misconceived and have been filed only to harass the Respondent and prolong the litigation. He further submits that in Section 7 Application filed by the Financial Creditor, there was detailed pleadings regarding the sequence of the events and details of extension granted by the Financial Creditor to Corporate Debtor have been mentioned which clearly proved that when....
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....tten on behalf of the Corporate Debtor are evidence of acknowledgment of debt and letters seeking extension of time were brought on record along with the Reply filed by the Respondent No.1 in Company Appeal (AT) (Ins.) Nos. 1124-1125 of 2020. It is submitted that Respondent No.1 never contended before this Tribunal in Company Appeal (AT) (Ins.) Nos. 1124-1125 of 2020 that letters containing acknowledgment were filed along with the Section 7 Application. There is no question of any misleading by the Respondent No.1 and there is no question of fraud being played by the Respondent No.1 on this Tribunal. All pleadings and documents which were on record have been looked by this Tribunal for deciding the Appeal on 07.01.2022. Entire Application under Section 7 filed by the Respondent No.1 was brought on record in Appeal by Respondent No.1 itself with all its annexures which amply proves that what documents were brought on record along with the Section 7 Application and which letters and documents were brought on record along with the Reply filed by the Respondent No.1. It is submitted that due to the dismissal of the Appeal against the order dated 15.03.2019 by this Tribunal the principl....
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.....01.2022 and his arguments are only based on the fraud which is played on this Tribunal by the Respondent No.1 in obtaining order dated 07.01.2022. The order dated 07.01.2022 which has been obtained by practicing fraud on this Tribunal deserves to be recalled by this Tribunal. He further submits that the submission which has been raised in these Applications are submissions confining to the fraud played on this Tribunal and he is not making submission with regard to fraud which was practiced on the Adjudicating Authority while obtaining order of admission on 15.03.2019. Learned Counsel for the Applicant in support of his submission has relied on various judgments of the Hon'ble Supreme Court which we shall refer by considering the submission in detail. 14. We have considered the submissions of Learned Counsel for the Applicant and Learned Senior Counsel for the Respondent and perused the record. 15. The main question which arise for consideration in these Applications is, whether this Appellate Tribunal was misled and deceived by fraud practiced by Respondent No.1 which lead dismissal of the Company Appeal (AT) (Ins.) Nos. 1124-1125 of 2020 vide its judgment dated 07.01.2022.....
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....nullity. 19. The judgment of the Hon'ble Supreme Court in "United India Insurance Co. Ltd. vs. Rajendra Singh & Ors.- AIR 2000 SC 1165" has been relied by the Counsel for the Applicant. In para 17, following was laid down:- "17. Therefore, we have no doubt that the remedy to move for recalling the order on the basis of the newly discovered facts amounting to fraud of high degree, cannot be foreclosed in such a situation. No Court or tribunal can be regarded as powerless to recall its own order if it is convinced that the order was wangled through fraud or misrepresentation of such a dimension as would affect the very basis of the claim." 20. In "S.P. Chengalvaraya Naidu vs. Jagannath- (1994) 1 SCC 1", the Hon'ble Supreme Court had held that a judgment or decree obtained by playing fraud on the court is a nullity and non est in the eyes of law. In para 1 of the judgment, following has been laid down:- "Fraud avoids all judicial acts, ecclesiastical or temporal" observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the court is a nullity and non est i....
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....inciple will apply not only to court of law but also to statutory tribunals which, like the Commission, are conferred power to record evidence by applying certain provisions of the Code of Civil Procedure including the power to enforce attendance of the witnesses and are also given the power to receive evidence on affidavits. The Commission under the Consumer Protection Act, 1986 decides the dispute by following the procedure indicated in Section 22 read with Section 13(iv) and (v) of the Act." 24. There is an elaborate consideration of expression 'fraud' in (2010) 8 SCC 383- "Meghmala and Others vs. G. Narasimha Reddy and Others". The Hon'ble Supreme Court held that fraud and deception are synonymous. In para 34, following was held:- "34. An act of fraud on court is always viewed seriously. A collusion or conspiracy with a view to deprive the rights of the others in relation to a property would render the transaction void ab initio. Fraud and deception are synonymous. Although in a given case a deception may not amount to fraud, fraud is anathema to all equitable principles and any affair tainted with fraud cannot be perpetuated or saved by the application of any equit....
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...., which is to the following effect:- "13. Per contra, Ld. Sr. Counsel for the Respondent No. 1 vehemently opposed the prayer and submitted that the Respondent No. 1 in its petition under Section 7 of IBC has mentioned true facts that DRT has passed a decree on settlement of parties and thereafter, issued recovery certificate and thereafter, time to time the Corporate Debtor has acknowledged the debt and in support the Respondent No. 1 has filed the documents. Therefore, it is incorrect to say that the Respondent No. 1 has played any fraud and obtained the admission order dated 15.03.2019. Therefore, Ld. Adjudicating Authority cannot recall its own order. Particularly, when the order dated 15.03.2019 is affirmed by this Appellate Tribunal vide order dated 06.09.2019. Thus, the order dated 15.03.2019 is merged with the Judgment of this Appellate Tribunal and now that order is not in existence. For this merger principle he placed reliance 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 ....
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....een paid by Corporate Debtor and balance amount of Rs. 5,92,26,120/- was payable on or before September, 12, 2012. A consent decree was passed on the above terms in O.A No. 177/2001. The said consent terms included the dues of the present RC also. The aforesaid OTS failed for want of repayment by the Corporate Debtor. On 2nd January 2014, vide an Assignment Agreement, all the loans granted to the Corporate Debtor by Exim Bank (Assignor) alongwith the underlying rights, title and interests were assigned in favour of the Applicant. On the request of the Corporate Debtor time and again, extension of the payment of the balance amount has been granted on 5 occasions by the Applicant. The last extension was granted by the Applicant (EARC) vide letter dated 17.12.2015 which was valid upto 31.03.2016. ultimately, the Applicant (EARC) revoked the OTS vide letter dated 05.04.2016. 33. In Section 7 Application, apart from providing information in the relevant columns as required in prescribed format in Form-1, there were total 28th Annexure filed along with Application by the Respondent No.1. In 2nd Column of Part-V, as extracted above, it was pleaded that an amount of Rs. 5,9....
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....ve. The Corporate Debtor repeatedly requested the answering respondent for extension of time limit for payment of the OTS amount telephonically as well as by written communications. Copies of letters dated 01.11.2014 & 17.03.2015 written by the Corporate Debtor to the answering respondent seeking extension of the time for payment of the OTS amount are filed herewith as ANNEXURE R-3 (colly). (iii) That the answering respondent on the request of the Corporate Debtor had granted many extensions for payment of the OTS amount. The last extension had been granted by the answering respondent vide its letter dated 15.05.2015 which was valid upto 31.12.2015. Copies of the letters of the answering respondent dated 14.03.2014 (granting extension upto 25.09.2014), 23.09.2014 (granting extension upto 15.03.2015) and dated 15.05.2015 (granting extension upto 31.12.2015) are filed herewith as ANNEXURE R-4 (colly). (iv) That the Corporate Debtor by its letter dated 01.12.2015, had requested for a re-negotiated settlement at Rs. 4.50 crore. The said request was turned down by the answering respondent by its letter dated 10.12.2015. A copy of the Corporat....
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....ny kind of representation by Respondent No.1 that those letters which have been filed along with the Reply were before the Adjudicating Authority along with the Section 7 Application. In judgment dated 07.01.2022, this Tribunal itself has noted the details of different letters given by the Financial Creditor and letters on behalf of Corporate Debtor in tabular form in para 24. In para 24 of the judgment dated 07.01.2022 although this Tribunal observed that "the Respondent No.1 in his Written Submissions filed before this Appellate Tribunal has clarified the dates when the Corporate Debtor had acknowledged the debt, which are as under":- 23.09.2014 EARC by its letter dated 23.09.2014 extended the time for payment of OTS amount upto 15.03.2015 in response to email dated 18.09.2014 of the CD. Reply-Annex 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 ma....
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....eal (AT) (Ins.) Nos. 1124-1125 of 2020, to explain and clarify the pleading which is made by the Financial Creditor before the Adjudicating Authority. As noted above, in Part-V of the Application under Section 7, Column 2, pleading and foundation was already laid down by the Financial Creditor regarding the extension of time sought on behalf of Corporate Debtor for making the repayment. Last letter was issued by the Respondent No.1- Financial Creditor on 17.12.2015 by which extension was granted by the Financial Creditor to Corporate Debtor for payment upto 31.03.2016. The letter dated 17.12.2015 was not filed along with Section 7 Application but was brought on record along with the Reply in Appeal. 38. We may make it clear that we are not adverting to the question on merits as to whether the Application under Section 7 filed by the Respondent No.1 was whether barred by time or was within the limitation prescribed. The Application having been admitted by the Adjudicating Authority which Application was objected by the Corporate Debtor by filing Reply and no plea regarding limitation was admittedly raised. Application was admitted by the Adjudicating Authority against which the A....
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....1 pleaded that all documents pertaining to acknowledgment have been filed along with Section 7 Application nor in fact Respondent No.1 even pleaded or submitted before this Tribunal at the time of hearing of this Appeal that documents of acknowledgment of debt by the Corporate Debtor have been filed along with Section 7 Application. We, thus, are satisfied that neither the Respondent No.1 practiced any fraud or misled this Tribunal with regard to pleadings and submissions as noted in paras 13 and 24 of the judgment dated 07.01.2022 nor there was any false statement made by the Respondent No.1 before this Tribunal at the time of hearing of the Appeal that documents of acknowledgment by Corporate Debtor were filed before the Adjudicating Authority although in the Section 7 Application, pleadings regarding acknowledgment and extension of time by Financial Creditor for payment have been clearly made as noted above. 40. Learned Counsel for the Respondent No.1 has submitted before us that since pleading under Section 7 Application regarding extension of time granted by Financial Creditor were never disputed by the Corporate Debtor in Reply filed before the Adjudicating Authority, no o....
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....letters which were written on behalf of the Corporate Debtor were not by the authorized person since the letters written by Financial Creditor were given effect to. For example- in response to letter dated 14.03.2014 written by Financial Creditor to the Corporate Debtor on One Time Settlement- extension of time was granted to Financial Creditor till 25.09.2014 subject to payment of Rs. 50 Lakhs within one week. The letter was acknowledged on 18.03.2014 by the Corporate Debtor and pay order of Rs. 50 Lakhs was handed over on 18.03.2014 that too was addressed to Shri Deepak Khosla as Director. We, thus, do not find any substance in the submission of the counsel for the Applicant that there was any fraud played by Respondent No.1 in sending the letters granting extension of time for payment of settlement amount to unauthorized person. This Tribunal delivered its judgment dated 07.01.2022 after elaborately hearing the counsel for the parties. The parties were permitted to file Written Submissions which are on the record. It is also relevant to note that the Application filed under Section 7 was already admitted by the Adjudicating Authority vide its order dated 15.03.2019 against which....