TaxTMI 
TaxTMI 
2026 (6) TMI 72
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....N, J. These two appeals have been filed by the suspended director of the corporate debtor challenging two separate orders passed by the adjudicating authority (National Company Law Tribunal, New Delhi, Court - II) in C.P. (IB) No.474/ND/2025 dated 15.12.2025 & C.P. (IB) No.585/ND/2025 dated 21.01.2026. The adjudicating authority by the above two separate orders have admitted Section 7 application filed by the JC Flowers Asset Reconstruction Private Limited, the financial creditor herein. Appellant aggrieved by the above orders initiating Corporate Insolvency Resolution Process ("CIRP") proceedings against the corporate debtor has filed these two appeals. 2. Brief facts of the case giving rise to these two appeals are as follows: Comp. App. (AT) (Ins.) No. 2040/2025 i. The corporate debtor - Bliss Abode Private Limited entered into Loan Agreement dated 13.07.2017 with Indibulls Housing Finance Limited for Rs.90 crore. ii. 4 other Loan Agreements dated 05.10.2017 were entered between the corporate debtor and Indiabulls Housing Finance Ltd. for sum of Rs.75 crore Rs.67 crore Rs.60 crore and Rs.83 crore respectively. iii. As security to the loan pers....
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.... application, to which reply was filed by the corporate debtor objecting to Section 7 application. Adjudicating authority after hearing the parties vide order dated 15.12.2025 admitted Section 7 application and appointed the Interim Resolution Professional ("IRP"), aggrieved by which order, Comp. App. (AT) (Ins.) No.2040/2025 has been filed. Comp. App. (AT) (Ins.) No. 585/2026 i. Loan Agreement dated 05.09.2018 was entered into between Bliss Abode Pvt. Ltd., the corporate debtor with Indibulls Housing Finance Ltd. for Rs.75 crore. ii. Further Agreement dated 29.03.2019 was entered between the corporate debtor and Indiabulls Housing Finance Ltd. for sum of Rs.105 crore. The common deed of guarantee was executed by appellants Ms. Bindu Kapoor and Mr. Rana Kapoor. iii. Mortgage deed was executed in favour of security trustee, mortgaging the Duplex Apartment No. 5 on 15th & 16th Floor at a project named as Sesen, owned by a related party - Imagine Residence Private Limited. iv. On 09.03.2020, Indiabulls Housing Finance Ltd. issued a loan recall notice asking the corporate debtor to repay the outstanding amount of Rs.189,27,34,375/- along with the ....
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....y Directorate of Enforcement only on 09.07.2020 valued for Rs. 562 crore. NCLT failed to consider that debt and default had not been crystallized. The award in favour of the financial creditor in C.P. (IB) No.474/2025 was under challenge by filing Section 34 application by the corporate debtor, which is pending consideration before the Delhi High Court. Debt and default had not been crystallized in view of the challenge to award of Section 34. Section 7 was not maintainable on basis of uncrystallised award. The adjudicating authority failed to consider that financial creditor in C.P. (IB) No.474/2025 was seeking execution of the arbitration award by means of Section 7 proceeding which is impermissible. Financial creditor when failed to achieve the execution before the Delhi High Court, it proceeded to file Section 7 application. Further Section 7 application filed in C.P. (IB) No.474/2025 was barred by time. 5. Learned counsel for the appellant pressed the above noted submissions in support of Comp. App. (AT) (Ins.) No.585/2026 also claiming that loan recall notice being unfounded the entire proceedings initiated by financial creditor is without any basis and deserves to be set ....
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.... have elapsed but the corporate debtor has not paid even a rupee. In the facts and circumstances of both these appeals, it is necessary to resolve the corporate debtor through insolvency resolution process under the IBC and both the appeals deserves to be dismissed with cost. 7. Learned counsel for both the parties have placed reliance on the judgments of this Tribunal and the Hon'ble Supreme Court, which we shall notice while considering the submissions hereinafter. 8. The loan recall notice dated 09.03.2020 was issued to the corporate debtors; Bliss Abode Pvt. Ltd. and Bliss House Pvt. Ltd. with guarantors Bindu Kapoor and Rana Kapoor. It is useful to notice the loan recall notice dated 09.03.2020 issued to the corporate debtor Bliss Abode Pvt. Ltd. and the said personal guarantors. It is useful to extract the notice 09.03.2020 which is to the following effect: "To Date: March 09, 2020 1. M/s Bliss Abode Private Limited 40, Amrita Shergill Marg New Delhi-110003 Corporate Identity Number: U70109DL2017PTC313912 2. M/s RAB Enterprises (India) Private Limited 15th Floor, Tower 2A, One Indiabulls Centre, Senapati Bapat Marg, Lower Parel, Mumbai-4....
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....,048/- (Rupees Four Crore Thirty Six Lakh Forty Six Thousand Forty Eight only) is also to be submitted to the Lender under Loan Documents, In view of the aforesaid and pursuant to the provisions of the Loan Documents, without prejudice to our other nights. and remedies, we hereby recall the outstanding Loan(s) and call upon you to forthwith pay us all the amounts payable to the Lender under the Loan Documents within five days from the date of receipt of this notice. In case of failure on your part to comply with the aforesaid, without prejudice to our other rights/remedies and without any further notice to any of you, (a) please treat this notice (issued under the Loan Documents and/or the applicable laws) as a notice of/for sale, disposing off, transfer, grant, conveyance, assignment and/or encumbrance of any fall of the Security/Securities provided in favour of the Lender under the Loan Documents; and/or (b) please treat this notice (issued under the Loan Documents and/or the applicable laws) as a notice for invocation of the guarantee(s) executed by the Guarantor(s) in favour of the Lender, and pursuant to which the Guarantor(s) shall be liabl....
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....he opinion of the Lender on or affecting: (a) the business, operations, property or condition (financial or otherwise) of the Borrower(s); (b) the ability of the Obligor(s) to perform its/their obligations under the Loan Documents; or (c) the validity or enforceability of the Loan Documents or the rights or remedies of the Lender under the Loan Documents. "Obligor(s)" means the Borrower(s), the Hypothecator(s), the Guarantor(s), the mortgagor(s), the Pledgor(s) and/or any other persons providing Security to secure the Borrower(s)' obligations under the Loan Documents including the Borrower's Dues and/or who is or becomes a party (other than the Lender) to the Loan Documents." 11. Guarantors are included into the definition of obligors both Rana Kapoor and Bindu Kapoor are admittedly the guarantors of the loan. 12. Learned counsel for the appellant questioned very issuance of loan recall notice. It is contended that the fact that one of the guarantors Rana Kapoor was arrested on 08.03.2020 cannot be said to be any effect which is material adverse effect. The liability of guarantors arises only when borrower commits default in making ....
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....res, guarantees and demand promissory notes, and/or do such other things in relation to and/or with respect to the Security (any part thereof) which may be permitted under law." 13. We thus are of the view that no infirmity is found in issuance of loan recall notice dated 09.03.2020. The loan recall notice recalled the entire loan and asked the corporate debtor and obligors to make the payment within 5 days from receipt of the notice. Loan recall notice dated 09.03.2020 to M/s. Bliss Abode Pvt. Ltd. demanded a payment of amount of Rs.388,42,96,875/-, whereas, loan recall notice dated 09.03.2020 demanded the corporate debtor Bliss House Pvt. Ltd. an amount of Rs.189,27,34,375/-. We thus are of the view that submission raised by the counsel for the appellant that loan recall notice is not in accordance with the agreement between the parties cannot be accepted. The loan agreement between the financial creditor and Bliss Abode Pvt. Ltd. as well as Bliss House Pvt. Ltd. were both in the same terms relying on which, the loan recall notice against the corporate debtor was issued on 09.03.2020. 14. Learned counsel for the appellant in support of Comp. App. (AT) (Ins.) No.2040/2025 su....
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....utstanding sum of Rs. 388,42,96,875/-, along with Rs. 4,36,46,048/- towards Tax Deductible at Source (TDS) within a period of 5 days i.e., on 14.03.2020, failing which SCL would the Loan Recall Notice would be treated as an invocation of all security documents and that SCL would be entitled to enforce such securities as offered by the Corporate Debtor and the obligors to recover the outstanding dues under Loans 1 to 5. A copy of the Loan Recall Notice dated 09.03.2020 issued by Sammaan Capital Limited to the Corporate Debtor and the obligors is annexed herewith and marked as Annexure P-11. 15. Part IV also referred to the Arbitration Proceedings which culminated into arbitral award on 28.02.2023. In Part IV it was specifically pleaded that after loan recall notice did not pay any outstanding amount. Part IV pleads that default on the part of the corporate debtor subsist. In Part IV in paragraph 33, following has been pleaded: "PART-IV PARTICULARS OF FINANCIAL DEBT 1 TOTAL AMOUNT OF DEBT GRANTED AND DATE OF DISBURSEMENT 33.It is clear from the position set out above that the Corporate Debtor has defaulted in its obligations under the Loan Agreements for Loans 1 to ....
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.... that cannot be relied by the lenders for filing any Section 7 application. We have already noticed the pleadings in Part IV of Section 7 application against the Bliss Abode Pvt. Ltd. which indicate that application is not founded only on Arbitral Award rather that first default which is claimed by corporate debtor is default on loan recall notice dated 09.03.2020, when no payment was made by 14.03.2020. Section 7 application specifically relies on loan recall notice 09.03.2020. Thus, it cannot be said that application was filed only on basis of Arbitral Award. The Regulation 2A(b) which is relied by the appellant which provides that record or event of default by financial creditor which can be relied in support of Section 7 application. As noted above in the facts of the present case arbitral award is not the only basis for filing Section 7 application and default was committed on 14.03.2020 in response to loan recall notice, no amount was paid. 18. Learned counsel for the appellant further submitted that Section 7 application was filed to execute the award which is not permissible. Learned counsel for the appellant has relied on the judgment of this Tribunal in 'Shaikh Mohamme....
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....t of the Vidarbha Industries Power Ltd.' (supra) in subsequent judgments. It is relevant to notice the recent judgment of the Hon'ble Supreme Court in 'Power Trust (Promoter of Hiranmaye Energy Ltd.)' Vs. 'Bhuvan Madan & Ors. (Interim Resolution Professional of Hiranmaye Energy Ltd.)' reported in [2026 SCC OnLine SC 248], where in paragraphs 33 & 34 following was laid down: "33. Reiterating the ratio in Innoventive Industries Ltd. v. ICICI Bank [(2017) 205 Comp Cas 57 (SC); (2018) 1 SCC 407; (2018) 1 SCC (Civ) 356; 2017 SCC OnLine SC 1025.], this court in E.S. Krishnamurthy v. Bharath Hi-Tech Builders P. Ltd. [(2022) 230 Comp Cas 226 (SC); (2022) 3 SCC 161; (2022) 2 SCC (Civ) 129; 2021 SCC OnLine SC 1242.] held as follows [ See page 245 of 230 Comp Cas.] : "The Adjudicating Authority has clearly acted outside the terms of its jurisdiction under section 7(5) of the Insolvency and Bankruptcy Code. The Adjudicating Authority is empowered only to verify whether a default has occurred or if a default has not occurred. Based upon its decision, the Adjudicating Authority must then either admit or reject an application, respectively. These are the only two courses of acti....
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....iss Ribbons P. Ltd. v. Union of India [[2019] 213 Comp Cas 198 (SC); (2019) 4 SCC 17; 2019 SCC OnLine SC 73.], this court reaffirmed that the trigger for the corporate insolvency resolution process is default, and the object of the Code is to ensure timely resolution to preserve enterprise value. 12.5. The reliance placed by the corporate debtor on Vidarbha Industries Power Ltd. v. Axis Bank Ltd. [(2022) 233 Comp Cas 544 (SC); (2022) 8 SCC 352; (2022) 4 SCC (Civ) 329; 2022 SCC OnLine SC 841.] is wholly misconceived. That decision has consistently been recognised as a narrow exception confined to its peculiar facts, namely the existence of an adjudicated and realisable claim in favour of the corporate debtor exceeding the debt owed. 12.6. This position now stands authoritatively clarified in M. Suresh Kumar Reddy v. Canara Bank [[2023] 22 Comp Cas-OL 586 (SC); (2023) 8 SCC 387; 2023 SCC OnLine SC 608.], wherein this court held that Vidarbha Industries Power Ltd. v. Axis Bank Ltd. [(2022) 233 Comp Cas 544 (SC); (2022) 8 SCC 352; (2022) 4 SCC (Civ) 329; 2022 SCC OnLine SC 841.] does not dilute the binding ratio of Innoventive Industries Ltd. v. ICICI Bank [(2017) 205....
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....tion 34 application in which corporate debtor has challenged the arbitral award dated 28.02.2023 cannot be a ground to admit Section 7 application which was also founded on default which was committed by the corporate debtor on 14.03.2020 even much before the arbitral award was delivered. 23. Learned counsel for the appellant has also relied on the recent judgment of the Hon'ble Supreme Court in 'Anjani Technoplast Ltd.' Vs. 'Shubh Gautam' in [Civil Appeal No.8247/2022] decided on 23.04.2026. Reliance has been placed on paragraph 31 of the judgment. In paragraph 31 following has been held: "31. We have considered the NCLAT's reliance on this Court's decision in Dena Bank (supra). It is true that in paragraph 141 of that judgment, this Court held that a decree for money in favour of a financial creditor would give rise to a fresh cause of action for initiating proceedings under Section 7 of the IBC. We do not doubt that proposition as a general statement of law. However, that principle does not operate in a vacuum. It does not mean that every decree holder who also happens to be a financial creditor is entitled, as a matter of right, to invoke the insolvency process ....
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....ect to the provisions of the Code, so that the corporate debtor may be pulled out of the woods and may continue as a going concern, thus benefitting all stakeholders involved. It is only as a last resort that winding up of the corporate debtor is resorted to, so that its assets may be liquidated and paid out in the manner provided by Section 53 of the Code. On the other hand, RERA protects the interests of the individual investor in real estate projects by requiring the promoter to strictly adhere to its provisions. The object of RERA is to see that real estate projects come to fruition within the stated period and to see that allottees of such projects are not left in the lurch and are finally able to realise their dream of a home, or be paid compensation if such dream is shattered, or at least get back monies that they had advanced towards the project with interest. At the same time, recalcitrant allottees are not to be tolerated, as they must also perform their part of the bargain, namely, to pay instalments as and when they become due and payable. Given the different spheres within which these two enactments operate, different parallel remedies are given to allottees under RERA....