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Whether where, the appellant has not challenged the original order admitting the application whereby CIRP was initiated, the appellant can subsequently take the shelter of the question of limitation, was considered by the NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI, before a bench consisting of Justice Anant Bijay Singh, Member (Judicial); and Ms. Shreesha Merla,  Member (Technical), in the matter of Amish Kumar Gupt vs. K Subhra Narayan Mohapatra & Ors. [Company Appeal (AT) (Insolvency) No. 696 of 2020], on 25.01.22.

The present appeal was preferred by the appellant – Amish Kumar Gupta being aggrieved and dissatisfied by the order dated 22.07.2020 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Principal Bench whereby and where under the application filed by the Resolution Professional under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 (IBC) was allowed and appointed Mr. K. Subhra Narayan Mohapatra as Liquidator. On 31.08.2012, the account of the Corporate Debtor was classified as Non-Performing Asset by the Financial Creditor with the outstanding amount of Rs. 812.60 lacs. On 25.09.2012, the Notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The Financial Creditor filed Original Application for an amount of Rs. 1912.60 Lakhs before DRT II, Delhi. In the month of April and August, 2013 the Financial Creditor sold two properties of the guarantors situated at Khurja (U.P.), before issuing a Section 13(4) notice on 17.05.2017 under the SARFAESI Act against the Company, Promoters, Directors, Guarantors.

On 30.12.2014, without considering the reply submitted by the Corporate Debtor in light of the show cause dated 11.09.2013, the Financial Creditor vide it order dated 20.12.2014 classified the Corporate Debtor as to be the wilful defaulter on the ground that the Corporate Debtor failed to submit any representation on the show cause notice which was completely fake. It was averred that on 12.01.2015, the Financial Creditor took physical possession of the plant of the Corporate Debtor at Pant Nagar, District Udham Singh Nagar, forcibly/illegally by putting its own lock on the main gate of the plant. It was also averred that on 18.05.2018, the Petition was filed by the Financial Creditor under Section 7 of the IBC with a prayer to trigger the Corporate Insolvency Resolution Process against the Corporate Debtor. The Adjudicating Authority vide its order dated 02.07.2019, admitted the Petition filed by the Financial Creditor and appointed the Interim Resolution Professional for carrying out the Insolvency Resolution Process of the Corporate Debtor. Thereafter, the Resolution Professional / Respondent No. 1 herein filed an Application under Section 33(2) of the IBC based on the resolution dated 17.12.2019 by the Committee of Creditors for liquidation of the Corporate Debtor. The said application was allowed by the Adjudicating Authority and hence the present appeal.

The Learned Counsel for the Appellants argued that although the appellant has not challenged the order dated 02.07.2019 whereby the Application under Section 7 of the IBC filed on 18.05.2018 by the Financial Creditor (Respondent No. 3) was allowed; the appellant has challenged the order dated 22.07.2020 passed by Adjudicating Authority whereby the Application under Section 33(2) of the IBC filed by Resolution Professional (Respondent No. 2) was allowed and appointed Mr. K. Subhra Narayan Mohapatra as Liquidator. It was further submitted that the Adjudicating Authority admitted the application filed under Section 7 of the IBC without considering an important aspect of Limitation under Article 137 of the Limitation Act, 1963. It was further submitted that the application under Section 7 of the IBC was filed on 18.05.2018, on the basis of purported NPA dated 31.08.2012. It was asserted that this ignores the fact that the application under Section 7 of the IBC would be time barred if it is not filed within three years from the date of the cause of action.

The Learned Counsels for the Respondents argued that the Liquidator is doing his statutory duty as assigned by NCLT from the date of appointment as Liquidator vide liquidation order dated 22.07.2020, therefore, based on these submissions there is no merit in the Appeal, the Appeal is fit to be dismissed. It was further asserted that as the appellant chose not to avail the remedy provided under the IBC, the order passed by the Adjudicating Authority attained finality. It was further contended that no objection was raised or received, and that CIRP was conducted strictly in accordance with the provisions of the IBC. It was also submitted that the said Applications were filed with the most ulterior motive and mala file intentions, that too only after the liquidation application was filed by the Resolution Professional solely with the object of frustrating the proceedings under the IBC.

The National Company Law Appellate Tribunal, Principal Bench, New Delhi, after considering the facts, arguments presented, and placing reliance on several precedents, held that admittedly, the appellant has not challenged the original order dated 02.07.2019 passed by Adjudicating Authority admitted the Application filed by the Respondent No. 3 whereby the CIRP was initiated, so the Appellant cannot now take the shelter of the question of limitation. From the conduct of the appellant which has been mentioned therein above in the submissions of the Respondent No. 1 and 3, the tribunal was of the view that the appellant was taking all steps to delay the process. The tribunal did not find any illegality in the impugned order. Accordingly, the impugned order dated 22.07.2020 passed by the Ld. Adjudicating Authority (National Company Law Tribunal), New Delhi, Principal Bench was affirmed. The appeal was held to be devoid of merit and was accordingly dismissed.

Click here to read the judgement.

Judgement reviewed by Bhargavi