TaxTMI 
TaxTMI 
2025 (12) TMI 885
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....e to this appeal are: i. The CM Smith & Sons Limited is a company consisting of two groups of shareholders. A Shareholder Agreement was entered on 11.12.2014, under which the Mahendra Lodha group became 51% shareholder of the corporate debtor and 49% shareholding was retained with Smith family. The corporate debtor had obtained financial facilities from the State Bank of India (SBI) as well as the Indian Bank. ii. On 13.07.2016, Indian Bank assigned its debt to the financial creditor, Invent Assets Securitisation & Reconstruction Pvt. Ltd., the respondent herein for a purchase consideration of Rs. 17 crore. Mahendra Lodha group got transferred 26% share from appellant and his family and became shareholder of 78% in the corporate debtor. iii. The corporate debtor had also submitted an OTS proposal to the financial creditor vide letter dated 03.10.2016. The R-1 accepted the OTS proposal on 22.12.2016. Payment of only Rs. 98 lakhs was made and the corporate debtor defaulted in making the payment as per the OTS. Default was committed by the corporate debtor on 10.01.2019. Application under Section 19 was filed by R-1 before the Debt Recovery Tribunal (DRT), w....
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....areholder where financial creditor is also one of the respondents. Issues of oppression, mismanagement, fund diversion, and fraudulent transfer of shares are issues in the said proceedings. R-1 has been arrayed as R-8 in the CP 17/2023. The appellant is also the personal guarantor of the corporate debtor and admission of Section 7 application exposes the appellant to personal insolvency, coercive recoveries and execution proceedings. It is submitted that all facts have been pleaded any materials brought on the record in company petition filed by the appellant under Sections 241 & 242 of the Companies Act, 2013. Appellant has also filed additional affidavit in this appeal on 11.11.2025, bringing relevant materials on record to prove round tripping by the majority shareholder and fraudulent filing of Section 7 application which is malicious filing by R-1 at the instance of majority shareholder. Counsel for the appellant submitted, in the written submissions which was filed by the appellant before the adjudicating authority all relevant grounds and pleadings have been taken, which has not been adverted by the adjudicating authority while admitting Section 7 application. Learned Sr. co....
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....on false allegations. Appellant did not file any document in the reply filed under Section 7 which are now sought to be filed by additional affidavit which were not before the adjudicating authority. Documents now sought to be introduced by the appellant by additional affidavit need not be looked into or considered or taken on the record in the present case. It is submitted that financial creditor has successfully proved debt and default on the part of the corporate debtor and has rightly admitted Section 7 application. In pursuance of admission of Section 7 application, Resolution Professional (RP) has made publication and claims of more than Rs. 500 crore have been received by the RP. 6. We have considered the submissions of the counsel for the parties and perused the records. 7. We need to first consider the objection raised by R-1 regarding locus of the appellant. 8. Coming to the submission of the appellant that judgment of this Tribunal relied by R-1 that appeal cannot be maintained by a shareholder, suffice it to say that for the purposes of this case the above submission need not be gone into the facts of the present case. 9. We proceed to consider the locus of ....
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.... 75 & 76: "75. The provision stipulates that "any person" who is aggrieved by the order of Nclat may file an appeal before the Supreme Court within the prescribed limitation period. Similar language is used in Section 61 IBC, which provides for appeals to Nclat from orders of NCLT. ["61. Appeals and appellate authority.-(1) Notwithstanding anything to the contrary contained under the Companies Act, 2013 (18 of 2013), any person aggrieved by the order of the adjudicating authority under this part may prefer an appeal to the National Company Law Appellate Tribunal." (emphasis supplied)] The use of the phrase "any person aggrieved" indicates that there is no rigid locus requirement to institute an appeal challenging an order of NCLT, before Nclat or an order of Nclat, before this Court. Any person who is aggrieved by the order may institute an appeal, and nothing in the provision restricts the phrase to only the applicant creditor and the corporate debtor. As noted above, once CIRP is initiated, the proceedings are no longer restricted to the individual applicant creditor and the corporate debtor but rather become collective proceedings (in rem), where all creditors, such as ....
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....ly to Section 7 application and further he is a personal guarantor of the corporate debtor for the financial facilities availed from Indian Bank on 11.03.2014 which facilities are basis of initiating Section 7 application, we are of the view that appellant has locus to maintain the appeal, hence the objection of the respondent that appellant has no locus is rejected. 15. Now we come to the order of the adjudicating authority admitting Section 7 application. In paragraphs 19 & 20 of the impugned order, adjudicating authority has made following observations: "19. Heard the submissions of Ld. Counsels of both the parties and perused the documents on record. The acceptance of loan and other facilities are not denied by the Corporate Debtor. According to the Petitioner there was a default in making payment from November-2014 and from February-2015, the Indian Bank classified account of the Corporate Debtor as "Non-Performing Asset on 12.0.2015. The Indian Bank further assigned the debt to financial creditor by Registered Deed of Assignment dated 13.07.2016. It was intimated to the Corporate Debtor therefore, Corporate Debtor has given an OTS proposal, which was accepted by t....
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....e balance sheet of 2020-21, corporate debtor has admitted and acknowledged its liability. In the above facts, we do not find any error in order of the adjudicating authority admitting Section 7 application by the impugned order. 17. The submission on which counsel for the appellant much emphasised is that Section 7 application filed by R-1 was at the instance of majority shareholder Mahendra Lodha of the corporate debtor and Section 7 application has been initiated maliciously and the present case was a case where adjudicating authority ought to have exercised its jurisdiction under Section 65 of the IBC to reject Section 7 application as well as to impose penalty. Learned counsel for the appellant submitted that it was decided by Mahendra Lodha and its companies to buy the debts of Indian Bank as well as the SBI and for buying the debt of Indian Bank and SBI there was round tripping of the funds from the account of the corporate debtor and three companies of Mahendra Lodha. Learned counsel for the appellant submits that appellant has filed an additional affidavit and has pleaded that after appellant having filed CP 17/2023 for oppression and mismanagement under Sections 241 & 2....