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TaxTMI 
TaxTMI 
2023 (11) TMI 107
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....Adjudicating Authority (National Company Law Tribunal, Cuttack) in CP (IB) No.30/CB/2022 and in IA (IB) No. 253/CB/2023. By the impugned order passed in IA (IB) No. 253/CB/2023 (hereinafter referred to as "First Impugned Order"), the Adjudicating Authority rejected the I.A. filed by the present Appellant on the ground that the main company petition was reserved for orders. By the impugned order passed in the main company petition (hereinafter referred to as "Second Impugned Order"), the Adjudicating Authority admitted the application under Section 7 of the IBC filed by JM Financial Asset Reconstruction Company Limited - the present Respondent No.1 and initiated Corporate Insolvency Resolution Process ("CIRP" in short) of the Corporate Debtor - Maa Durga Commotrade Private Limited. Aggrieved by these impugned orders, the present appeal has been filed by the suspended director of the Corporate Debtor assailing both these orders. 2. The brief facts of the case are as follows: - The Corporate Debtor-Maa Durga Commotrade Pvt. Ltd. had obtained credit facility from the Karnataka Bank Limited ("KBL" in short) in 2010 for an amount of Rs.1 crore. The loan account of th....
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....cus to file the Section 7 application against the Appellant. It was further submitted that the purported assignment of the debt to Respondent No.1 by the KBL, the original Financial Creditor was incomplete as the Assignment Deed assigning the loan was insufficiently stamped and therefore not admissible in evidence. Moreover, the said deed not having been placed on record violated Rule 4(2) of the Insolvency and Bankruptcy Code (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as "AA Rules"). Moreover, the Corporate Debtor had not been a party to the Assignment Deed. In the absence of the Trust Deed, the application under Section 7 should have been treated to be incomplete. Further, the Adjudicating Authority had erroneously admitted the Section 7 application since the date of default being 06.09.2013, the application was barred by limitation. The OTS proposal on which the Adjudicating Authority has premised the impugned order had been made by the Corporate Debtor after a lapse of more than three years and therefore clearly time barred. 4. The Learned Counsel for the Respondent No.1 rebutting the arguments of the Appellant submitted that in Section 7 ap....
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....apacity as Trustee of the KBL as is borne out from the Memo of Parties. Therefore, the Respondent No.1 ought to have placed the Trust Deed on record as mandated by Rule 4(2) of the AA Rules. In the absence of any Trust Deed placed on record, the claim of the Respondent No.1 to have locus as the Financial Creditor was questionable and therefore the application under Section 7 should have been treated to be incomplete and could not have been admitted. It was also pointed out that the Assignment Deed was inadequately stamped and the Corporate Debtor not being a party to the Assignment Deed, it was not admissible in evidence. 10. Making counter arguments, it has been submitted by the Respondent No. 1 that in the Memo of Parties filed by them in the main company petition before the Adjudicating Authority, they had done so in their capacity as a trustee. That being so, the Corporate Debtor was fully aware of the trustee capacity of Respondent No. 1. It therefore does not stand to any logical reasoning as to why this issue was not raised in the main company petition but is being raised belatedly in the I.A. The Respondent No. 1 also vehemently contended that the assignment agreement, b....
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....nuum with no hiatus or gap as such in the two stages. That being the well accepted and time-tested practice in court proceedings, subsequent pleadings filed by way of an I.A. after the judgement is reserved is normally not entertained for reasons of procedural propriety. The Adjudicating Authority while dismissing the I.A. has applied the same settled position of law that when a matter is reserved for orders, there is no scope for entertaining application from parties to re-hear the matter. The Adjudicating Authority has relied on the judgment of the Hon'ble Supreme Court in Arjun Singh v. Mohindra Kumar & Ors. 1964 5 SCR 946 and Hon'ble Rajasthan High Court in Rajasthan Financial Corporation v. Pukhraj Jain & Ors. in AIR 2001 Raj 71 to hold that no application could be moved after the final arguments were heard and the case was closed for judgment. Hence, we find that the Adjudicating Authority had committed no error in not entertaining the I.A. particularly so when the I.A. contained facts which were already in existence at the time of filing of reply and at the time of making pleadings in the main company petition. Neither do we find any cogent grounds having been cited to expla....
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....ce any right already accrued and any right will acquire in future over the subject matter of assignment all vest upon the assignee. 6. In respect of acknowledgement of debt is concern section 18 of Limitation Act speaks about acknowledgement of property and rights accordingly here the respondent in the financial statement 2014-2015 acknowledge the debt covered under the assignment deed, of course in favour of the assignor it will not change the position. The debt is acknowledged by the debtor against whom the debt is claimed. 7. In these circumstances it is answerer that the acknowledgement of debt made by the corporate debtor in its balance sheet for the year 2014-2015 in favour of assignor, is valid, and subsequently the respondent submitted OTS proposal to petitioner recognizing it as an assignee. On the petitioner side proved that there is a debt, and default, the twin vital requirements to admit the petition." 16. Having heard both parties and perused the records, it is an undisputed fact that the Corporate Debtor had availed the loan facility undisputedly from KBL, the original Financial Creditor. This debt had also been clearly acknowledged by the Appell....