The deliberate false statements made by the insolvent led to the recall of the order of annulment, emphasizing the duty of the insolvent to disclose all creditors and the obligations of the Official Assignee in insolvency proceedings.

1. This application is taken out by Kotak Mahindra Bank Limited as assignee of State Bank of India to recall the order dated 3rd December 2014 in Notice of Motion No. 52 of 2014 by which the Hon’ble Court was pleased to annul under Section 21(1) of the Presidency Town Insolvency At, 1909 (Insolvency Act), the order of adjudication dated 22nd April 2010 passed against Akshay D. Thakkar (Insolvent).

2. The reason why applicant wants this order to be recalled is because on 3rd December 2014 when the order of annulment was passed, to the knowledge of the insolvent and to the knowledge of the official assignee, there was an order and judgment passed by the Debt Recovery Tribunal on 20th May 2009 against the insolvent to pay to applicant a sum of Rs.9,60,97,800.69 with simple interest @ 8% per annum from the date of filing till realization along with costs and charges. Applicant to the application and both insolvent and official assignee were also aware that recovery proceedings have been initiated against the insolvent and even two properties belonging to the insolvent had been attached. Applicant also states that the insolvent has also filed an application to set aside/vacate the attachment order before the Debt Recovery Tribunal (DRT) of which nobody is aware what the status is. Shri Bhure states that the attachment order still continues.

3. The insolvent was adjudicated insolvent on a petition filed by one Manipal Finance Corporation Limited. The claim, according to the insolvent, of Manipal Finance Corporation Limited was settled by a well-wisher of the insolvent based on which insolvent took out a Notice of Motion No. 52 of 2014 for annulling the order of adjudication on the grounds that the petitioning creditor’s claim has been settled and there are no other creditors. The affidavit in support filed by the insolvent in the notice of motion affirmed on 30th August 2014, paragraph no.3 reads as under :-

“3. …............I say that other than the above Creditor I do not have any creditor payable either jointly or personally.”

(emphasis supplied)

4. In view of this statement made by the insolvent, this Court believed the averments made by the insolvent and recorded in the order dated 3rd December 2014 in paragraphs 2 and 3 which read as under :-

“2. The learned Advocate for the Insolvent states that the Insolvent has set out the name of his Creditor in the Affidavit-in-Support of the above Notice of Motion and the Petitioning Creditor M/s. Manipal Finance Corporation Ltd., is the only creditor of the Insolvent. It is further stated that the claim of the Petitioning Creditor has been duly settled by the well-wisher of Insolvent. Mr. Varma also states that the Insolvent has also complied with the requisitions raised in the above Rule Nisi.

3. Mr. Ramesh Jain, Advocate for the Petitioning Creditor states that the claim of his client has been duly settled by the well-wisher of the Insolvent. 1St Assistant to the Official Assignee states that the claim of the Petitioning Creditor whose name is disclosed by the Insolvent in the Schedule of Assets and Liabilities has been settled and there are no claims pending with the Office of the Official Assignee. However, she has stated that the original receipt is not lodged with the Office of the Official Assignee.”

(emphasis supplied)

5. Therefore, the counsel for the insolvent and the 1st Assistant to the official assignee had made a statement to the Court that apart from Manipal Finance Corporation Limited, there are no other creditors. Of course the Official Assignee has qualified by saying “.....disclosed by the insolvent in the Schedule of Assets and liabilities.............”. Therefore, if not disclosed the Official Assignee also would not know. One Madan K. Salve the alleged well-wisher of the insolvent has also filed undertaking-cum-indemnity bond with the official assignee that he has paid off the creditors in full and final settlement and also given an undertaking to pay/deposit all