TaxTMI 
TaxTMI 
2026 (2) TMI 1284
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....aw Tribunal, Mumbai Bench ("Ld. NCLT") in CP (IB) No. 141/MB/2024 whereby the Ld. NCLT has admitted the Company Petition filed on behalf of the Respondent No.2 and initiated the Corporate Insolvency Resolution Process ("CIRP") of the Corporate Debtor. 2. Appellant is the Suspended Director and claims that impugned order was passed in violations of principles of natural justice as the NCLT relied upon the affidavit filed on behalf of the Financial Creditor (after reserving of orders) without granting the Corporate Debtor any opportunity to respond to the same and also that the Ld. NCLT further ignored the fact that the said Affidavit was never served on the Corporate Debtor and the objections raised on behalf of the Corporate Debtor were rejected by the Ld. NCLT basis the Affidavit of the Respondent No.2 and the Impugned Order suffers from further procedural irregularities. Reliefs sought: 3. The Appellant has sought the following reliefs: a) Set aside the Impugned Order dated 02.09.2025 passed by the Ld. National Company Law Tribunal, Mumbai Bench in CP (IB) No. 141 of 2024; and/or b) Quash the Insolvency Resolution Process proceedings before the Ld. Nati....
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....rder that the right of a citizen to access justice is protected, the mechanism so provided must not only be effective but must also be just, fair and objective in its approach. So also the procedure which the court, tribunal or authority may adopt for adjudication, must, in itself be just and fair and in keeping with the well-recognised principles of natural justice." 5. Appellant contends that defect cannot be cured in a manner not recognized by the Code. Section 7(5)(b) of the Code provides that where an application is incomplete petition, the Ld. NCLT may, by order, reject such application after giving notice to the applicant to rectify the defect in the application within seven (7) days of receipt of such notice from the Ld. NCLT. Ld. NCLT either could have rejected the petition or given a notice to Respondent No.2 to cure the defects within a period of 7 days. The Code does not recognise any post facto curing of defects by way of additional affidavits after the orders have been reserved. Admittedly, the undermentioned defects were cured by way of the additional affidavit filed on behalf of the Respondent No.2. Thus there is non-compliance of the following Rules: â....
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....Court"" ii) Judgement dated 03.02.2021 passed by the Hon'ble Supreme Court titled OPTO Circuits (India) Ltd. v. Axis Bank [(2021) 6 SCC 707]: "14. This Court has time and again emphasised that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner alone and in no other manner. Among others, in a matter relating to the presentation of an election petition, as per the procedure prescribed under the Patna High Court Rules, this Court had an occasion to consider the Rules to find out as to what would be a valid presentation of an election petition in Chandra Kishore Jha v. Mahavir Prasad [Chandra Kishore Jha v. Mahavir Prasad, (1999) 8 SCC 266] and in the course of consideration observed as hereunder: (SCC p. 273, para 17) "17 .... It is a well-settled salutary principle that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner.". xxx. 9. Appellant also contends that the unstamped loan agreement could not have been relied upon by the Ld. NCLT while admitting the petition under Section 7 of the Code. Appellant also contends th....
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....nity to make any oral arguments on the additional affidavit or on the main matter. 12. It is a fact, that after the petition was reserved for judgment, the petition, on 23.07.2025 was again listed for clarification. The Ld. Adjudicating Authority, vide order dated 23.07.2025, sought clarification from the answering respondent, on compliance of Rule 4(3) of the IBC (Application to Adjudicating Authority), which mandates service of the application to both the Corporate Debtor and the Insolvency and Bankruptcy Board of India (IBBI) before filing. The Tribunal observed that the omission of service upon the IBBI constitutes a procedural irregularity, albeit one that is rectifiable. Accordingly, when this Application was listed for clarification on 23.07.2025, learned Counsel for the Financial Creditor was directed to clear the defect by effecting service of the petition upon the IBBI. On that occasion, the Counsel for the Financial Creditor, undertook to file proof of such service in additional Affidavit. The Financial Creditor, scrupulously complied with the subsequent order dated 23.07.2025, having served a copy of the petition upon the IBBI. The proof of service stands substantiat....
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.... had initially sanctioned the following facilities to the Corporate Debtor: • For sum of Rs. 10 crores term loan and cash credit facility for 5 crores • Fresh Term Loan of Rs.6.18 Crores sanctioned on 17.07.2016. • The debt was later part of a consortium loan with Apna Sahakari Bank Ltd., with DNS Bank acting as the lead bank, extending 6.18 Crores of the 10.8 Crores total facility. 16. The Debt was secured by way of multiple hypothecation and mortgage deeds, which were executed between 2014 and 2017, securing Movable and immovable assets including plant and machinery, stocks, receivables, land and building, etc. 17. Pegasus Assets Reconstruction Private Limited (R2) is the Assignee of the debts of the Corporate Debtor which was assigned along with all the underlying security interest, pledges and guarantees, by Dombivli Nagari Sahakari Bank Ltd. ("DNS Bank") vide an Assignment of Debt Agreement dated December 31, 2020. 18. The Corporate Debtor defaulted in repayment and the loan account was classified as NPA on 31.03.2018 by DNS Bank. As of 16.10.2023, the outstanding default amount is 37,35,74,442.07/- inclusive of principal, intere....
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....BI) before filing. 21. The Financial Creditor contends that the Corporate Debtor only raised technical and curable objections, without denying the existence of debt or occurrence of default. The Corporate Debtor availed loan facilities from DNS Bank (assignor) which are duly reflected in the Corporate Debtor's audited accounts and the erstwhile director of the Corporate Debtor, Mr. Vinod Parmar, by email dated 16.02.2024, admitted that the loan account was declared NPA and acknowledged liabilities. The Applicant/Financial Creditor assigned the debt to Pegasus ARC under SARFAESI Act, which was intimated to the Corporate Debtor vide letter dated 06.01.2021. The Corporate Debtor, approached the financial creditor i.e. Pegasus ARC for settlement, thus estopped from disputing the loan agreement and deed of assignment. The Application was filed through its authorized representative who is duly empowered under Board Resolutions dated 27.07.2023 and 12.12.2023. Inability to file record of default with IU is not fatal. Absence of IU record, specifically when there is categorical acknowledgment of debt in the book of accounts of the Corporate Debtor, cannot be a ground to reject the p....
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.... as a liability in the Corporate Debtors audited balance sheets. Thus we observe that under the SARFAESI Act assignment of debt vests a right in the assignee and the Corporate Debtor cannot dispute once acknowledgement is evident from its own records. 25. We further note that the account was classified as NPA on 31.03.2018 and the outstanding default amount was around Rs. 37.35 crs. The Corporate Debtor never disputed the quantum or existence of default. It had acknowledged the debt in its audited financial statements up to financial year 2021-21. The liability is also admitted in its email dated 16.02.2024 which expresses its financial distress. Under these conditions there are sufficient acknowledgements which conclusively establish the default under Section 3(12) of the Code. 26. We also note that this application was filed on 01.11.2023 and the acknowledgements as per the audited financial statements and also the admission of liability in its email dated 16.02.2024 shows that the application is within the limitation period as provided under Section 18 of the Limitation Act. The objections raised regarding the limitations thus cannot be sustained. 27. On some technical ....