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2024 Supreme(Online)(NCLAT) 1031
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Arun Baroka, Member (Technical)
Mr. Rakesh Kumar Jain – Appellant
Versus
M/s ADTV Communications Private Limited – Respondent
Company Appeal (AT) (Insolvency) No. 849 of 2023 | I.A. No. 2894, 2895 of 2023
For the Appellant :Mr. Sunil Dalal, Sr. Advocate with Mr. Tarun Diwan, Ms. Pyari, Mr. Chandra Prakash, Mr. Chiraayu Trehan and Mr. Nikhil Beniwal
For the Respondent: Mr. Anish, Proxy Counsel.
A decree holder can be classified as a financial creditor under the IBC if the decree is based on a financial debt, and acknowledgment of debt can extend limitation periods.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 61 - Appeal against dismissal of Petition for initiating CIRP Proceedings - Appellant as Financial Creditor gets support from the judgment in Dena Bank vs. C. Shivakumar Reddy; A decree holder can be classified as a financial creditor under IBC if the decree is based on a financial debt. (Paras 6, 18, 22, 30)
(B) Limitation - The cause of action refers to dishonoured cheque; acknowledgment of liability extends limitation. (Paras 25, 26, 27)
Facts of the case:
Appellant entered into Settlement Agreement for ₹15,23,00,000 with the Respondent, who defaulted on payment leading to execution proceedings.
Findings of Court:
Appellant qualifies as a financial creditor, and the petition is within limitation.
Issues: Whether the Appellant is barred by limitation and if he qualifies as a Financial Creditor.
Ratio Decidendi: A decree holder can initiate insolvency proceedings if the debt is based on financial transactions; acknowledgment of debt extends limitation period.
Result: The Appeal is allowed.
| Table of Content |
|---|
| 1. appeal filed under ibc against nclt order. (Para 1 , 2 , 3 , 4) |
| 2. details of settlement and default. (Para 5 , 8) |
| 3. arguments regarding the classification of the appellant. (Para 6 , 10 , 11) |
| 4. conclusion and ruling on appeal. (Para 15 , 31) |
| 5. legal standing of decree holders as financial creditors. (Para 22 , 24 , 30) |
JUDGMENT
(Hybrid Mode)
[Per: Arun Baroka, Member (Technical)]
This is an Appeal under Section 61 of the Insolvency and Bankruptcy Code , 2016, against the Order dated 24.04.2023 passed by the Ld. Adjudicating Authority i.e., National Company Law Tribunal-III, New Delhi in CP (IB) No. 3083/ND/2019 in the matter of Rakesh Kumar Jain vs ADTV Communications Pvt. Ltd. wherein Appellant is Financial Creditor.
2. The present Appeal, filed by Sh. Rakesh Kumar Jain is impugning the validity of the Order dated 24.04.2023 passed by the Ld. Adjudicating Authority wherein the Ld. Tribunal dismissed the Petition of the Appellant being CP (IB) No. 3083/ND/2019, for initiating the CIRP Proceedings against the Respondent Company.
3. There was some litigation going on between the parties including a suit for recovery of the amount filed by the Appellant/ Financial Creditor against the Respondent before the Hon’ble High Court of Delhi and other courts, wherein the disputes were referred to Mediation before the Mediation and Conciliation Centre Delhi High Court.
4. Appellant and Respondent reached an Agreement and resolved all their disputes in the Mediation Centre and signed a Settlement Agreement detailing terms of the settlement wherein the Respondent agreed to pay an amount of ₹15,23,00,000/- (rupees fifteen crores and twenty-three lakhs only) to the Appellant and issued four cheques of different amounts, which were to be paid on various dates. The Hon’ble Delhi High Court passed a decree in CS(OS) No. 2183/2013 based on the settlement arrived at between the parties in the Mediation and Conciliation Centre.
5. As per the Decree passed by the Hon’ble High Court in terms of the settlement between the parties an amount of ₹5,23,00,000/- (rupees five crores, twenty-three lakhs only) was paid by the Respondent. But the cheque of ₹10,00,00,000/- (rupees ten crores only) in terms of the settlement, deposited for encashment by the Appellant/Decree Holder was returned unpaid by the banker of the Respondent company on 07.04.2016. For the default of making payment of ₹10,00,00,000/- (rupees ten crores only) the Appellant filed the execution petition being Ex P. No. 65/2016 before the Hon’ble High Court in CS (OS) No. 278/2011. Hon’ble High Court in Ex. P No. 65/2016 attached the bank account of Judgment Debtor/Respondent i.e. Axis Bank, Nehru Place and Kotak Mahendra, Nehru Place to the maximum extent of ₹10,00,00,000/- (rupees ten crores only). And also, Judgment Debtor No. 2 Sanjeev J. Aeren i.e. Director of the Judgment Debtor/Respondent was directed to appear in person on the next date i.e. 19.09.2016 and was also restrained from leaving the country till the next date of hearing. But during the hearing of the Execution Petition it was noticed that the execution has wrongly been filed in CS(OS) No.278/2011 instead of in CS(OS) No.2183/2013. Therefore, the same was withdrawn with the liberty to file the execution in CS(OS) No.2183/2013 in terms of the Settlement Agreement between the parties, which was granted. The Hon’ble Court extended the stay till 30.09.2019 from releasing the amount with Kotak Bank Account No. 5011637955 of Respondent with ₹77,00,000/- (rupees seventy-seven lakhs only) in the accounts. The Hon’ble Delhi High Court in Ex. P No. 133/2016 attached immovable property of the Judgment Debtor being free hold plot of 19795 sq. mtrs. Further, the Hon’ble Delhi High Court in Ex. P No. 133/2016 appointed Mr. Amit Chaddha Advocate as Court Auctioneer to take steps as per law for sale of free hold plot of 19795 sq. mtrs. situated in Sector 11, G Block, Pratap Vihar, Ghaziabad, Uttar Pradesh, property of the Judgmen
