Strict compliance with section 12(2) of the Presidency Towns Insolvency Act, 1909 is mandatory for creditors. Non-compliance warrants the annulment of adjudication orders as it undermines the court's jurisdiction.

COMMON JUDGMENT

S.S.SUNDAR, J.,

(1)The above appeals have been preferred by the creditor challenging the common order passed by the learned Single Judge dated 14.06.2021 in A.Nos.298 and 299/2018 in IP.No.5/2013 allowing the applications to annul the exparte order of adjudication dated 28.09.2015 and to stay all further proceedings in IP.No.5/2013.

(2)Since this Court is called upon to examine several factual and legal issues, this Court finds it appropriate to narrate the dates and events and the admitted facts for the sake of appreciating the arguments on both sides.

i. The 1^st respondent and his brother were doing business by running a few Private Limited Companies, namely, M/s.Ravishankar Industries Private Limited, M/s.Green Gardens Private Limited, M/s.Gemini Arts Private Limited and M/s.Mahalakshmi Properties and Investments Private Limited. M/s.Ravishankar Industries Private Limited along with the 1^st respondent and his brother approached M/s.IndBank Merchant Banking Services Limited and availed loan for business purpose. Similarly, M/s.Green Gardens Private Limited, Gemini Arts Private Limited, Mahalakshmi Properties and Investments Private Limited promoted by the 1^st respondent and his brother, had availed loan facilities from M/s.IndBank Housing Private Limited.

ii. Mr.A.Manohar Prasad, the 1^st respondent herein and his brother Mr.A.Ravishankar Prasad, stood as guarantors. Since the borrowers and the guarantors had not repaid the loan, the following suits were filed:-

1. CS.No.1023/1998 filed against M/s.Mahalakshmi Properties and Investments Private Limited and Others.

2. CS.No.33/1999 filed against M/s.Green Gardens Private Limited and Others.

3. CS.No.52/1999 filed against M/s.Gemini Arts Private Limited and Others.

4. CS.No.225/1999 filed against M/s.Ravishankar Prasad Properties and Others.

In all the suits, the 1^st respondent and his brother Mr.A.Ravishankar Prasad were also parties as guarantors.

iii.In CS.No.225/1999, a Memorandum of Compromise was entered into on 30.11.2000 between M/s.IndBank Merchant Banking Services Limited and the defendants in the suits who are M/s.Ravishankar Industries Private Limited, Mr.A.Ravishankar Prasad and Mr.A.Manohar Prasad [1^st respondent herein]. The defendants in the said Memorandum of Compromise submitted to decree, for a sum of Rs.4,21,71,000/- as on 24.07.2000. The terms of compromise enabled the borrowers to pay the amount in instalments and there was a default clause by which the plaintiff was given the right to execute the decree for the entire amount with interest at 24% per annum in case there is delay or default, jointly and severally against the defendants. There were other terms also regarding withdrawal of company petition in CP.No.318/1997 and other criminal cases filed under Section 138 of Negotiable Instruments Act .

iv. On 11.12.2000, the Memorandum of Compromise was recorded in CS.No.225/1999 and a decree was passed based on the said Memorandum of Compromise. Despite the decree dated 11.12.2000 based on Memorandum of Compromise, the judgment debtors namely, the defendants in the suit in CS.No.225/1999 committed default and hence, M/s.IndBank Merchant Banking Services Limited filed EP.Nos.45 to 47 of 2004 for execution of the decree dated 11.12.2000 passed in CS.No.225/1999. The decree holder obtained an order of attac