Company Appeal (AT) (Insolvency) No. 1021 of 2019

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI

Company Appeal (AT) (Insolvency) No. 1021 of 2019

IN THE MATTER OF:

Karan Goel

.... Appellant

Vs

M/s Pashupati Jewellers & Anr.

.... Respondents

Present:

For Appellant:

Mr. Rana Mukherjee, Senior Advocate with

Ms. Bansuri Swaraj and Mr. Siddhash Kotwal,

Advocates.

For Respondents:

O R D E R

01.10.2019

This Appeal has been preferred by Mr. Karan Goyal,

Promoter of M/s Pashupati Jewellers (‘Corporate Debtor’) against order dated

20^th September, 2019 passed by the Adjudicating Authority (National

Company Law Tribunal), Special Bench New Delhi.

2.

By the impugned order, the Adjudicating Authority admitted the

application under Section 7 of the Insolvency and Bankruptcy Code, 2016

(for short the ‘I&B Code’) preferred by M/s Pashupati Jewellers (‘Financial

Creditor’). Learned Counsel appearing on behalf of the Appellant submits

that loan amount Rs.2,60,00,000/- was taken by one Mr. Bal Karan Singh

Bhullar from Sumedha Kanodia and an agreement was executed on

7^th April, 2017. The said agreement was executed in violation of Section 185

of the Companies Act, 2013. The ‘Corporate Guarantee and Undertaking’

Agreement dated 7^th April, 2017 as purported, has been given by Marigold

Overseas Limited (‘Corporate Debtor’). There is actually a fraud played by

one of the erstwhile Director, namely – Mr. Navlesh. The so-called ‘Corporate

Guarantee and Undertaking’ Agreement dated 7^th April, 2017, in fact, is not

reflected in the records of the ‘Corporate Debtor’ available with the Registrar

Company Appeal (AT) (Insolvency) No. 1021 of 2019

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of Companies. Therefore, according to him, in the eyes of law, no ‘Corporate

Guarantee’ has been given by the Marigold Overseas Limited (‘Corporate

Debtor’) and, therefore, application under Section 7 of the I&B Code is not

maintainable.

3.

We have heard the learned Counsel for the Appellant and perused the

record.

4.

‘Corporate Guarantee and Undertaking’ Agreement was executed on

7^th April, 2017 is on record, which shows that the said Agreement is on

e-Stamp, Indian Non Judicial issued by Government of National Capital

Territory of Delhi. In the said e-Stamp, it has been clearly mentioned that

the e-Stamp was purchased by Marigold Overseas Ltd. for the purpose of

Loan Agreement. Merely, because the Appellant - Mr. Karan Goel has entered

into as Director in May 2017, now cannot take a plea that the ‘Corporate

Guarantee and Undertaking’ Agreement dated 7^th April, 2017 was a fraud

played by one Mr. Bal Karan Singh Bhullar on the ground that is has not

been reflected in the record of the Registrar of Companies.

5.

The ‘Corporate Guarantee’ was entered into by the Management of the

‘Corporate Debtor’, i.e., Marigold Overseas Limited. If for one or the other

reason, they have not referred the ‘Corporate Guarantee and Undertaking’

Agreement to Registrar of Companies and suppressed the fact, the Appellant

or the subsequent Director, cannot take a plea that the ‘Corporate Guarantee

and Undertaking’ Agreement was obtained by fraud on 7^th April, 2017 and is

not reflected in the records of the Registrar of Companies.

6.

In “Innoventive Industries Ltd. Vs. ICICI Bank and Anr. –

(2018) 1 SCC 407”, the Hon’ble Supreme Court observed: -

“27. The scheme of the Code is to ensure that when a

default takes place, in the sense that a debt becomes due

and is not paid, the insolvency resolution process begins.

Default is defined in Section 3(12) in very wide terms as

Company Appeal (AT) (Insolvency) No. 1021 of 2019

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meaning non-payment of a debt once it becomes due and

payable, which includes non-payment of even part

thereof or an instalment amount. For the meaning of

“debt”, we have to go to Section 3(11), which in turn t