TaxTMI 
TaxTMI 
2024 (7) TMI 117
X X X X Extracts X X X X
X X X X Extracts X X X X
....4, has filed this Appeal. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are : (i) IFCI advanced a Rupee Term Loan of Rs.150 crores and a Corporate Loan of Rs.100 crores to the Corporate Debtor. The Appellant executed Deed of Personal Guarantees in favour of the IFCI securing of Rupee Term Loan of the Corporate Debtor, Supertech Limited. (ii) Supertech Limited committed default in payment of loan, IFCI recalled both the loans and both the Personal Guarantees issued by the Appellant and Demand Notice was issued. (iii) Application under Section 95 was filed by IFCI on 02.06.2021 for initiating CIRP against the Appellant. (iv) Another Financial Creditor, i.e., PNB Housing Finance Ltd. ("PNBHFL") filed Application under Section 95 on 24.07.2021, which, was registered on 02.08.2021. However, no order has yet been passed in the Application filed by PNBHFL. Thereafter on the Application of IFCI, the impugned order was passed, appointing the RP. (v) The Appellant aggrieved by the order dated 01.05.2024 has filed this Appeal. 3. We have heard Shri Gaurav Mitra, learned Counsel appearing for the Appellant and Mr. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dure prescribed. It is submitted that a three Member Bench of this Tribunal in Company Appeal (AT) (Insolvency) No.721 of 2022 - Krishan Kumar Basia vs. State Bank of India has already decided the controversial issue and has held that the date of filing of the Application is the date, when it is e-filed and the filing of the petition is not the date when the Application is registered. It is submitted that the issue raised in the Appeal is fully covered by the judgment of three Member Bench of this Tribunal. Reliance on judgment of Kerala High Court by the Appellant is misplaced. 6. We have considered the submissions of learned Counsel for the parties and have perused the record. 7. The only issue, which has been raised by the Appellant in the present Appeal is that another creditor, i.e. PNBHFL has filed an Application on 24.07.2021 under Section 95, sub-section (1) against the Appellant, which Application was registered on 02.08.2021, hence, the moratorium has commenced in the Application filed by the PNBHFL, prior to registration of the Application filed by IFCI. Hence, the order passed by the Adjudicating Authority, appointing RP in the Application of IFCI is without juris....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... beginning of the appeal or petition or application and need not be repeated in the subsequent proceedings in the same appeal or petition or application. (6) The names of parties shall be numbered consecutively and a separate line should be allotted to the name and description of each party. (7) These numbers shall not be changed and in the event of the death of a party during the pendency of the appeal or petition or matter, his legal heirs or representative, as the case may be, if more than one shall be shown by subnumbers. (8) Where fresh parties are brought in, they may be numbered consecutively in the particular category, in which they are brought in. (9) Every proceeding shall state immediately after the cause title the provision of law under which it is preferred." Rule 21 provides for 'particulars to be set out in the address for service'; Rule 22 provides for 'initialling alteration'; and Rule 23 deals with 'Presentation of petition or appeal', which is to the following effect: "23. Presentation of petition or appeal.- (1) Every petition, application, caveat, interlocutory application, documents and appeal shall be pres....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n. The submission, which has been pressed by the learned Counsel for the Appellant is that the Application cannot be held to be filed unless it is numbered by the Registry, that is, only when the Application is found defect free and accorded a numbering by the Registry. Thus, a filing within the meaning of 2019 Rules read with NCLT Rules, is the filing at the filing counter or the filing is to be treated to be filing only when it is numbered by the Office of the Registry, is a question to be answered. 15. The learned Counsel for the Appellant submits that the Application is to be considered as 'filed' only when it complies with NCLT Rules 22 to 24 and 26 and an Application which is presented to the Registry and not complied with the aforesaid provisions is marked 'defective' cannot be treated to have been filed. Any petition, which is marked defective is evidence of it not being 'filed' and it may be considered to be filed only when it becomes defect free and numbered. Hence, whether petition is filed or not is determined by the numbering of the petition, as otherwise, it is defective and cannot be treated as filed. The act of numbering of the petition is the sole evidence....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inst Krishan Kumar Basai is 01/10/2021 and filing number if 07101020/7186/2021, where as filing number of respondent is 07101020/7885/2021. Admittedly, the date of application filed by the Applicant is prior to the date of filing of the application by the Respondent under Section 95 of the IBC, 2016. Of course, the application filed on behalf of the Applicant was not listed earlier, rather it was listed after the listing of the application filed by the Respondent." 18. When as per Rule 10, sub-rule (2), when an electronic facility is available and an Application is filed in electronic form, the filing is complete as soon as it is registered electronically, we do not find any support from the statutory scheme to the submission of learned Counsel for the Appellant that petition would be treated as filed when it is numbered by the Registry. Numbering of an Application by Registry is a process, which is undertaken by the Registry as per the relevant rules and instructions. Several consequences ensue on filing of the Application in the Registry, if it is accepted that the filing shall be dependent on numbering of the Application by the Registry. It will lead to uncertainty rega....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ubmissions, which was made before the Division Bench of the High Court, it is useful to notice the said submissions in paragraph 22, which is as follows: "22. Before the Division Bench, it was submitted on behalf of the appellants that prior to 1-7-2002, Section 26 of the Code merely indicated that every suit shall be instituted by the presentation of a plaint or in such other manner as may be prescribed. The manner in which such plaint was to be prepared and presented has been provided for in detail in Orders 6 and 7 of the Code. It was submitted on behalf of the appellants that with effect from 1- 7-2002 certain amendments were effected to the aforesaid provisions of the Code by Act 46 of 1999 which made it mandatory that in every plaint, facts would have to be proved by an affidavit. It was submitted that sub-section (2) was added to Section 26 by way of amendment incorporating the said provision. Correspondingly, amendments were also introduced in Order 6 Rule 15 relating to verification of pleadings and sub-rule (4) was inserted mandating that the person verifying the pleading was also required to furnish an affidavit in support of its pleadings. In addition to the ab....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... plaint is filed without compliance with the requirement of the amended provisions, in the eye of the law no plaint can be said to have been filed and the same is non est. However, having regard to the various decisions cited, including the decision of this Court in Salem Advocate Bar Assn. [(2003) 1 SCC 49] it was also held by the Division Bench that from the moment the error is rectified, the plaint will be deemed to have been properly instituted but the rectification could not relate back to a period when in view of the deeming clause there was no due institution of the plaint. On the aforesaid reasoning, the Division Bench held that the suit could not be dismissed nor could the plaint be rejected because of noncompliance with the amended provisions since the omission had been remedied by the filing of an affidavit by the respondent plaintiff. It was held that after the defect was removed the suit must be deemed to have been duly instituted with effect from 28- 7-2004 and not before that date and consequently the interlocutory order that had been passed by the learned Single Judge at a point of time when the suit had not been duly instituted could not survive. The judgm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....principal that even if there is any defect in the Application, which is subsequently cured, the date of presentation of the Application shall remain the same and shall not be dependent on the date when defects are cured. We, thus, are of the considered opinion that Adjudicating Authority after due consideration has taken correct view of the matter in holding that filing of the Application under Section 95 by the State Bank of India is on a date when Application was filed and allotted number electronically and the submission of the Appellant that date of filing of the Application shall be the date when Application is numbered has rightly been rejected." 11. The three Member Bench of this Tribunal in Krishan Kumar Basia's case has approved the view of the Adjudicating Authority that filing of the Application under Section 95 by the State Bank of India is on the date when the Application was filed and the date shall not be the date when the Application is numbered. 12. Applying the above ratio in the present case, we have to hold that filing of the Application by IFCI, was prior in time and the mere fact that Application filed by PNBHFL was registered earlier is inconsequential ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich by itself cannot be treated as filing of an application as contemplated by Section 96. 25. In view of the serious consequences that will follow on filing of an application under Section 96 by a debtor, on the creditors who will be disabled and disentitled from initiating or proceeding with any debt recovery legal mechanism, Section 96 should be construed strictly. Mere uploading of an application under Section 96 of the IBC 2016 cannot be taken as filing of an application. The filing of an application as contemplated under Section 96 should be defectless and devoid of any procedural lapses. Only when an application is filed without any defects and satisfying the statutory procedural requirements of filing and only when the adjudicating authority numbers the application, there can be a legal and acceptable filing of application. 26. In the case of the petitioner, admittedly the NCLT has not treated the application as a valid application by assigning regular case number to the application. As long as the petitioner's application is not duly numbered by the NCLT, the interim moratorium contemplated under Section 96(1)(b)(i) cannot come into operation. Theref....