TaxTMI 
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2025 (9) TMI 681
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....ion in both the Appeals are more or less identical, however, since the impugned orders are different, we propose to consider the Appeals separately hereunder. Company Appeal (AT) (Insolvency) No. 2027 of 2024 3. We will first deal with Company Appeal (AT) (Insolvency) No. 2027 of 2024 which has been filed by Smt. Vimla Devi-Appellant. This Appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 ('IBC' in short) by the Appellant arises out of the Order dated 24.09.2024 (hereinafter referred to as 'Impugned Order') passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Bench-III) in C.P.(IB)No.380(ND)/2024. By the impugned order, the Adjudicating Authority has rejected the restoration application No. 380 of 2024. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant. 4. Coming to the brief facts of the case, M/s MMR Agro Foods Pvt. Ltd.- Corporate Debtor had obtained credit facilities from the Respondent- Karnataka Bank. The present Appellant-Smt. Vimla Devi stood as a personal guarantor of the Corporate Debtor. The account of the Corporate Debtor was declared as NPA on 30.11.2022 following which a Secti....
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....d that the Appellant is a senior citizen suffering from multiple ailments and diagnosed with cancer and due to her serious medical condition, she could not pursue the case properly. Being an elderly citizen suffering from health challenges she faced challenges in navigating legal proceedings and had to rely on legal counsel for representation. The counsel had admittedly failed to follow up on the court proceedings in Petition No. 455 of 2023 for which lapse the Appellant cannot be held responsible. Being an elderly litigant, the Appellant should not be put to prejudice because of inaction on the part of the counsel. The Appellant having limited knowledge of court processes had no other choice but to rely on her counsel. Moreover, as she was suffering from bad health she could not participate in person before the court. Therefore, there was no deliberate or intentional omission on the part of the Appellant and hence she deserved a fair hearing on her restoration application. It was therefore urged that the restoration explanation should have been considered with leniency so that the Section 94 application could have been considered on merits to secure the ends of justice. 7. Repe....
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.... Petitioner present and submitted that the arguing counsel is not available today and therefore sought adjournment. In view of this, list the matter on 08.11.2023. Ld. Counsel on behalf of the Respondent is also present. ORDER (Dated 12.12.2023) Proxy Counsel on behalf of the Petitioner is present and submitted that the main Counsel is not available today. Ld. Counsel on behalf of the Respondent/Karnataka Bank is also present. List the matter on 19.01.2024. ORDER (Dated 19.01.2024) Ld. counsel on behalf of the petitioner is present and sought time to file AFA as it exists now of the proposed IRP. Ld. Counsel for the Respondent is also present. List the matter on 28.02.2024. ORDER (Dated 28.02.2024) This is a Section 94 Petition. An Authorized Representative C.A. Rakesh Jindal appears on behalf of the Petitioner and submitted that they have no further instructions from their client, and therefore they could not file valid AFA of the proposed IRP as it exist now. In view of this, the Personal Guarantor is directed to appear in person* on the next date of hearing and explain his case, failing which the matter will be dismissed for non- pros....
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....iming cannot be treated as a simple case of accidental coincidence but signifies the ulterior motive of the Appellant taking refuge of moratorium under Section 96 of the IBC and to hinder and delay the recovery proceedings as and when initiated by the Respondent Bank. 13. This now brings us to the second Section 94 petition bearing No. 380 of 2024 and see how it was dealt by the Adjudicating Authority. We find that the petition was dismissed on grounds of non- prosecution again. At this stage it may be useful to notice the orders of the Adjudicating Authority which reads as under: ORDER (Dated 10.07.2024) This matter was passed over in the first call. No one has appeared even on the second call. IB-380(ND)/2024 dismissed for non-prosecution. 14. When we look at the above order it is clear that the Appellant did not appear either on the first or the second revised call and hence the matter was dismissed for non-prosecution. It clearly shows that the Appellant was not serious of defending her case but was dragging the matter. When the Section 94 petition had already been dismissed once earlier, any vigilant litigant would not be as lackadaisical the seco....
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.... of non- prosecution was not passed unlike in the present case when the Appellant not only did not appear on the first call but continued to remain absent even on the revised call leading to the dismissal order on grounds of non-prosecution. 16. This brings us to the restoration application No. 100 of 2024 which was dismissed by the Adjudicating Authority. To find out the grounds as to why the Adjudicating Authority came to the conclusion that there was insufficient cause for the matter to be restored, we would like to reproduce the order which is as under: ORDER (Dated 24.09.2024) New Rest.A-100/2024 This application has been filed seeking to restore the IB380(ND) / 2024 which was dismissed for non-prosecution by this Adjudicating Authority vide order dated 10.07.2024. We find from the records that a similar application i.e. IB455(ND)/2023 filed between same parties "Mrs. Vimla Devi Versus Karnataka Bank Limited" under Section 94(1) of the Insolvency and Bankruptcy Code, 2016 has been dismissed for non-prosecution on 01.04.2024 by Court No. VI. Ld. Counsel for the Applicant submitted that IB455(ND)/2023 was dismissed for non-prosecution....
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.... time of the Adjudicating Tribunal. It would not be far from truth to infer that the underlying intent of the Appellant was to prevent the Respondent from taking legal action for the recovery of its outstanding dues against the Appellants including enforcement actions undertaken under SARFAESI Act. We have no reasons to disagree with the Adjudicating Authority that it did not find any satisfactory basis for allowing the restoration application. We are of the considered view that the dismissal of the restoration application is not for unjustified reasons. The Adjudicating Authority cannot be faulted for rejecting the restoration application. Company Appeal (AT) (Insolvency) No. 04 of 2025 19. We will now deal with Company Appeal (AT) (Insolvency) No. 04 of 2025 which has been filed by Shri Manoj Aggarwal-Appellant. This Appeal filed under Section 61 of IBC by the Appellant arises out of the Order dated 08.10.2024 (hereinafter referred to as 'Impugned Order') passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Bench- III) in C.P.(IB)No.347(ND)/2024. By the impugned order, the Adjudicating Authority has dismissed the Section 94 application filed by th....
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....sfied with the explanation offered in the Affidavit for non-disclosure of dismissal of the first Section 94 petition and dismissed the Section 94 petition. It was submitted that since the existing counsel was not dealing with the court proceedings properly, as a remedial measure, he had already changed the counsel and engaged a new one who prayed for adjournment on the date of hearing i.e. 08.10.2024. The Adjudicating Authority however declined the prayer of the new counsel seeking adjournment. It is the contention of the Appellant that both himself and his mother were faced by serious medical handicap which prevented them from following the court proceedings. The Adjudicating Authority by not considering the submissions made by the new counsel while passing the impugned order did not act in conformity with the principles of natural justice. This had deprived the Appellant an opportunity of being heard causing miscarriage of justice. It was also pointed out the Adjudicating Authority had dismissed this Section 94 application keeping in mind that the earlier Section 94 application of the Appellant had already been dismissed once for non-prosecution. Even if the earlier petition was ....
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....ounsel appearing for the Applicant, the matter is adjourned to 10.01.2024. ORDER (Dated 10.01.2024) Mr. Narendra Singh, Proxy Counsel appearing on behalf of the Applicant seeks an adjournment. We have noticed from the records that on 05.07.2023 and 13.12.2023 a Proxy Counsel appearing for the Applicant sought adjournments and the matter was adjourned. It appears that the Applicant is not interested in pursuing the matter and taking advantage of the moratorium. Therefore, the application is dismissed for non-prosecution. 26. From a reading of the above orders, it is clearly borne out that the Adjudicating Authority had given enough opportunity to the Appellant to be heard. However, the Counsel on one pretext or the other did not appear whenever the matter was not getting adjourned on its own steam due to paucity of time. Thus, facts on records show that the Adjudicating Authority having given sufficient opportunity and latitude to the Appellant to defend his interest cannot be said to have violated the principles of natural justice. 27. When petition No. 364 of 2023 was dismissed for non-prosecution, we find that the Appellant did not challenge the dism....
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....itted that the same Personal Guarantor had earlier filed IB364/2023, through the same Counsel, Mr. Narendra Singh, with respect to the same subject matter which was dismissed for non- prosecution on 10.01.2024. He, therefore, submitted that the present application is not maintainable. We find that the Applicant has failed to disclose the above facts in the present application and filed second application under Section 94 of IBC, arising out of the same subject matter and transaction, which according to our considered view, the amounts grows abuse of process of law. We therefore, issue show-cause notice to the Applicant, Mr. Narendra Singh, Learned Counsel who has filed the present application and Vakalatnama and Mr. Rakesh Jindal, Chartered Accountant, who has appeared today, and directed them to file an affidavit explaining the conduct within ten days. List the matter on 04.09.2024. ORDER (Dated 08.10.2024) Mr. Gulshan Kumar Sachdev, Ld. Counsel appearing on behalf of Applicant seeks adjournment. We may note that this matter was listed for the first time on 03.07.2024 and was adjourned on the request made on behalf of Ld. Counsel for Appli....
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....n 94 petition. It is also an indisputable fact that the Appellant did not disclose to the Adjudicating Authority about the dismissal of their first Section 94 application. We therefore do not find anything unusual or unreasonable on the part of the Adjudicating Authority to ascertain the reasons from the Appellant as to why they had filed Section 94 petition again when it had already been dismissed earlier. We also notice that the Adjudicating Authority in the order dated 08.10.2024 which has already been reproduced above has clearly stated that it perused the affidavit by which explanation had been offered but was not satisfied with the explanation given. 32. Likewise, as in the Restoration Application filed by the present Appellants' mother, even in this appeal it is contended by the Appellant that there is no provision under the IBC or NCLT Rules, 2016 which bars the filing of a second petition after dismissal for non-prosecution by relying on the judgment of this Tribunal in Venus Sugar judgment supra. However, we have already noticed at para 15 above that the facts of Venus Sugar judgment supra was specific to that case and hence this judgment does not help the present Appe....