TaxTMI 
TaxTMI 
2026 (9) TMI 560
X X X X Extracts X X X X
X X X X Extracts X X X X
....IBC"). Submissions of the Appellant 2. The Appellant is the Ex-director/Promoter of M/s. VDPL/Corporate Debtor and also the Ex-director/Promoter of M/s Vigneshwara Developwell Pvt. Ltd. ("VDWPL") and claims that Adjudicating Authority has disregarded that Hon'ble High Court of Delhi and had reserved judgment of the Second Motion Application of compromise, arrangement and the consequential revival of the Corporate Debtor. The Adjudicating Authority has in effect, commenced proceeding which are in direct overlap (and potential conflict) with the proceedings pending before the Hon'ble High Court. This has resulted in carrying out parallel proceedings for the same set of facts and that too in a scenario where the Hon'ble High Court is not only seized of the matter but has in fact reserved final judgment, on the above proceedings. 3. The Appellant further claims that as per order dated 18.11.2013, the Company Court of the Hon'ble High Court, had issued notice in a winding up Petition filed against the Corporate Debtor by one M/s Intercontinental Consultant and Technocrats Pvt. Ltd. Thereafter, several other winding up petitions were also filed against the Corporate Debtor and i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Debtor. However, the Company Court of the Hon'ble High Court expressed its difficulty in staying the CIR Process and granted liberty to the Appellant to take appropriate steps. 7. Accordingly, the Appellant approached the Hon'ble High Court by way a Writ Petition (C) No. 11706/2019, which issued the following directions on 08.11.2019: XXX "a) That a lot of time and effort went into the mediation proceedings which culminated into the Revival Scheme and that the said effort would go into vain if the Impugned Order is allowed to stand; b) That while there is a statutory remedy available, the High Court could exercise its jurisdiction under Article 227 of the Constitution of India. c) Accordingly, the Impugned Order of the Adjudicating Authority was kept in abeyance with liberty to the Appellant to approach this Hon'ble Appellate Tribunal within four weeks. d) It was further directed that the Impugned Order would be kept in abeyance till such time the Company Court of the Hon'ble High Court disposes off Co. Pet. No. 885 of 2015 (and connected matter) or this Hon'ble Appellate Tribunal disposes off the present Appeal, whichever....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which is reckoned from the date of the alleged default. However, in the present case, admittedly, the cause of action to prefer the Petition arose in or around 2010. The Impugned Order completely ignores this legal position despite being made aware of the same. Submissions of the Respondent No1/ Lavkesh Verma 11. On 11.08.2010, a Developer-Anchor Unit Agreement was executed between Lavkash Verma (Respondent No. 1) and M/s Vigneshwara Developers Pvt. Ltd. Thereafter, the default occurred for the first time in the year 2015 when the Company failed to repay the monthly assured return payable to Respondent No. 1. As per the List of Dates of the captioned Appeal, at page 8 under the heading "April, 2019," specifically admits that, according to the Appellant itself, the cause of action had arisen on 10.08.2015. The said default was continuous and consequently, the period of limitation stood extended on account of such continuing default. 12. Thereafter, the Winding-Up Petition was admitted on 22.07.2016. By virtue of Section 446 of the old Companies Act, upon admission of the winding-up petition, no coercive proceedings could have been initiated against the Company. Thus, the l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on had not been handed over till date. There was, thus, a continuous cause of action and a continuous and subsisting debt and default, which was also acknowledged by the Appellant. The scheme of arrangement expressly acknowledged the debt and default payable to Respondent No. 1, thereby constituting an acknowledgment of liability. Since the Company/Appellant remains in continuous default until the unit is provided to the Respondent, the Section 7 Petition was filed well within the prescribed period of limitation. Further, the Appellant itself relied upon and admitted the existence of the Scheme of Arrangement, which included the dues of allotees, including the Respondent. The scheme was subsequently declared unworkable on 4 January 2023, and therefore the Appellant cannot contend that the Section 7 Petition was time-barred. Accordingly, in view of the continuous default and express acknowledgment of the debt under the scheme and mediation, there is no question of the Section 7 Petition being barred by limitation. 18. The Respondent No.1 further places reliance upon the judgments of this Hon'ble Tribunal. In the matter of Shailendra Agarwal vs Asit Upadhyaya & Ors, 2025 SCC O....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "In these circumstances, and in view of the large number of investors involved, it would be apposite and in public interest that proceedings under the IBC be revived." 23. The order having attained finality, the Appellant could not thereafter be permitted to agitate the issue or challenge the initiation of the insolvency proceedings. The Promoters were present before the Hon'ble Delhi High Court and the order dated 24.09.2025 of transfer and revival of insolvency proceedings was passed with their consent. Refer Para 15 of order dated 24.09.2025 which is reproduced hereinbelow: - "15. Learned Senior Counsel for the Ex-Directors reiterates his contention that in view of the Judgment passed by this Court on 12.09.2025 in matter Vigneshwara Developwell case he has no objection, if the prayer (a) and (b) of this Application are followed by this Court." 24. The order dated 24.09.2025 passed by the Hon'ble Delhi High Court has not been challenged and has thus attained finality. Accordingly, the Appellant is barred from challenging the revival/initiation of insolvency proceedings against the Company. The arguments in this Appeal are restricted to the issue o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... part IV of Form 1 relating to Application by Financial Creditor to initiate Corporate Insolvency Resolution Process under the Code under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Part IV notes that the total claim of the Financial Creditor / Respondent No.1 in this case is to the tune of Rs.29.25 lakhs including @ 18% interest, which was for a commercial technology unit measuring 250 sq. ft. for a total consideration of Rs. 18 lakhs. The amount was paid on 10.08.2010 vide Cheque No. 153886 and 153886 drawn on Bank of Baroda as noted in the Appeal Paper Book at page 70. The Appellant claims that the petition was filed in 2019 and therefore the claim is time barred at the filing of the petition. 30. Respondent No.1 - Lavkash Verma brings to our notice that the scheme of arrangement of VDPL was subjudice before the Hon'ble /Delhi High Court. The Hon'ble Delhi High Court vide its order dated 08.11.2019^2 in Writ Petition (C) No. 11706/2019 being Sunil Kumar Dahiya Vs. Union of India stayed the operation of the order dated 10.10.2019 under Section 7 of the Code agai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 contends that this is a case of a continuing breach and limitation runs afresh with each successive instance of default and the Corporate Debtor's failure to handover possession of the flats and its continuing default in refunding amounts to the allottees constitute a continuous cause of action. It has relied upon the Judgement of this Appellate Tribunal in Shailendra Agarwal (Suspended Director of M/s NHA Infrabuild Pvt. Ltd.) Vs Asit Upadhyaya & Ors., 2025 SCC OnLine NCLAT 785, the relevant extract is reproduced herein below: "29. We also note that the limitation period under the Limitation Act, 1963, is governed by Section 22, which provides that in the case of a continuing breach, limitation runs afresh with each successive instance of default. The Corporate Debtor's failure to hand over possession of the flats and its continuing default in refunding amounts to the allottees constitute a continuous cause of action. The directions issued by UP RERA from time to time, including the refund order dated 13.10.2020, its amendment on 18.06.2022, and the project registration cancellation on 24.12.2022, reaffirm the subsistence of debt and the ongoing breach by the Corpor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Section 7 of the IBC filed by Respondent No. 1 for seeking initiation of CIR Proceeding against the Appellant Company VDPL. Delhi High Court also takes note that the proceedings under the revival scheme had failed and Section 7 proceedings were being agitated before the NCLT. The Hon'ble High Court also observes that, it would be apposite and in public interest that proceeding under the IBC be revived, and accordingly the parties were given liberty to take appropriate steps in accordance with law for further proceedings before the NCLT. 37. In addition, Hon'ble Delhi High Court has noted that "the Supreme Court in the A. Navinchandra case has held that the pendency of admitted winding up proceedings is not a bar to proceedings under Section 7 or Section 9 of the IBC. It was held that Section 7 of the IBC is an independent proceeding, which has to be tried on its own merits and that stands by itself. It was further held that the discretionary provision under the 5th proviso to Section 434(1)(c)^4 of the 2013 Act cannot prevail over the jurisdiction of the NCLT under the IBC, once the parameters of Section 7 of the IBC and the other provisions of the IBC have been met." 38. W....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tatutory authorities were not paid nor were the claims of the land owners settled. The land for the projects could also not be handed over since the Propounders of the Scheme were in judicial custody. Since the Scheme had become unworkable, the Scheme was set aside by this Court on 04.01.2023. 29. Although the Official Liquidator has taken over the assets of the Company, it has confirmed in its Reply that no other irretrievable steps such as sale of the assets have been taken by the office of the Official Liquidator. The Official Liquidator has also averred that the Petition which was previously filed before the NCLT as a company Petition being C.P.(IB)-1076(ND)/2019 captioned Lavkash Verma v. Vigneshwara Developers Private Limited can be revived. 30. The IBC is a self-contained creditor driven framework, where the costs of the corporate insolvency resolution process are defrayed from recoveries, and in terms of the provisions of the IBC. The entire process is mandatory and to be undertaken in a time bound manner to ensure preservation of assets as well as that the creditors are paid in a defined framework. The IBC also contains a framework for effective powers to deal with f....