TMI Blog2021 (9) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 are pointed out. The fact that the Financial Creditor has obtained Recovery Certificate under Section 101 of the Maharashtra Co-operative Societies Act on 21.01.2015 is also not disputed - we discard the claim being made by the Corporate Debtor that he did not get opportunity to file reply to the petition. Violation of principles of natural justice - HELD THAT:- Once the party has appeared in the proceeding in the original forum where the further dates are given in the proceedings, and pendency of the proceeding is known to a party, it is the responsibility of the party also to keep track of the proceedings and to participate in future developments in the matter. The Corporate Debtor sought time to amicably settle the matter. It was recorded that failing settlement the matter will be heard on merits on next date of hearing and the matter came to be adjourned to 07.04.2020. The matter could not be heard on 07.04.2020 and was taken up on 24.11.2020 and the order dated 24.11.2020 shows that the Adjudicating Authority referred to hearings that took place on earlier dates and that the Corporate Debtor had filed reply. The Adjudicating Authority by way of abundant caution di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appeal claims and it is argued for the Appellant that the Respondent Financial Creditor is a Cooperative Credit Society registered under Maharashtra State Co-operative Societies Act, 1960. The Corporate Debtor had availed of credit facilities i.e. Working Capital Term Loan of ₹ 5 Crore for expansion of educational institution of the Corporate Debtor. The Financial Creditor granted consortium loan vide sanction letter dated 25.10.2013. Out of the amount sanctioned ₹ 2.25 Crore was disbursed by the Financial Creditor. ₹ 1.75 Crore was disbursed by Shivkrupa Sahakari Padpedhi, Nashikand and balance ₹ 1 Crore was disbursed by Janalaxmi Gramin Bigarsheti Patsanstha Maryadit, Akole. The Corporate Debtor mortgaged properties of the educational facilities. The Corporate Debtor expected to receive grant-in-aid from Government of Maharashtra which was to be released by 30.09.2018 but was not released. The Financial Creditor on 22.11.2019 filed Application under Section 7 of IBC alongwith Annexures (Annexure A-2 Colly). 4. The Appellant claims that Respondent had filed one MA No. 452/2020 seeking amendment in the petition. This MA was however withdrawn on 07.02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Copies of the orders have been attached with Annexure A-3 of the Appeal. The Appellant claims that although on 24.11.2020, the Adjudicating Authority directed the Registry to inform the Corporate Debtor the next date of hearing still no Court Notice was issued. Thus, it is claimed that the Corporate Debtor remained unrepresented in subsequent proceedings and impugned order came to be passed on the basis that the Corporate Debtor has filed Reply. Appellant claims in proceedings dated 05.02.2021, Adjudicating Authority recorded that the Corporate Debtor has been served with the notice with date of hearing on 04.04.2020 but according to the Appellant it was not possible as there was nationwide lockdown in the country from 24.03.2020 till 31.05.2020. Thus, Appellant claims that there was violation of Principles of Natural Justice. It is claimed that the Reply filed by the Corporate Debtor was to MA No. 452/2020 and that the Adjudicating Authority wrongly mentioned that the Corporate Debtor has filed Reply to the main Petition. The other ground raised by the Appellant on behalf of the Corporate Debtor is that the date of default in the present matter is stated to be 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notice and email sent informing dates of the proceeding. It is argued that inspite of keeping the Corporate Debtor informed the Corporate Debtor did not choose to appear and participate in subsequent proceedings and thus cannot claim any violation of Principles of Natural Justice. The Learned Counsel for the Respondent has relied on the various payments made by the Corporate Debtor from time to time and also relied on the proceedings which took place before the Co-operative Court Authorities and the Recovery Certificate issued under Section 101 of the Maharashtra Co-operative Societies Act and reliance has been placed on the provisions of the Limitation Act and judgments in the matter of Sesh Nath Singh Anr. vs. Bidyabati Sheoraphuli Co-operative Bank Ltd. Anr. , Civil Appeal No. 9198 of 2019 dated 22.03.2021 passed by the Hon ble Supreme Court of India. It is argued that the claim before the Adjudicating Authority was within limitation and that it has been rightly admitted. 8. As regards the claim of the Appellant that the Principles of Natural Justice were violated, Appellant has filed copies of orders at Annexure A-3. We have gone through the orders. The order dated 27.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... py to the other side. 3. It is made clear that even if, Respondent fails to file reply, the matter will be heard on merits. 4. List this matter on 12.04.2020. [Emphasis supplied] 11. From the above order it is clear that the Adjudicating Authority reiterated that the earlier MA No. 452/2020 was already withdrawn on 07.02.2020 and is wrongly on board and Counsel for the Corporate Debtor sought time to file reply in the main Company Petition. Now in the Appeal, Appellant is harping upon the fact that the reply was to the MA and not to the petition. This deserves to be rejected. If one peruses Annexure A-5 (page 97), it shows that in para 1 of the Reply (see pg. 99 of Dy. No. 26448) although the Corporate Debtor referred to Miscellaneous Application (which was already withdrawn), the Corporate Debtor in para 3 stated that the Appellant was filing this affidavit for the purpose of opposing the Company Petition. In said reply the contentions of the company petition are met for the purpose of opposing the company petition. The reply goes on to answer averments of the petition. The receipt of the loan is admitted. It is stated in Para 6 of the Reply as under: 6. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill be heard on merits on next date of hearing and the matter came to be adjourned to 07.04.2020. The matter could not be heard on 07.04.2020 and was taken up on 24.11.2020 and the order dated 24.11.2020 shows that the Adjudicating Authority referred to hearings that took place on earlier dates and that the Corporate Debtor had filed reply. The Adjudicating Authority by way of abundant caution directed the Registry to send a court notice to the Corporate Debtor as although the Counsel for Petitioner was present nobody was present for the Corporate Debtor. Thus, if the Counsel for the Petitioner could be present there is no justification why Counsel for the Corporate Debtor was not present. On 08.01.2021 also Counsel for the Petitioner was present but Counsel for the Corporate Debtor did not appear and the Adjudicating Authority adjourned the matter to 05.02.2021. On 05.02.2021, the order of the Adjudicating Authority is as follows: 1. Heard the professional appearing on behalf of the petitioner. There is no representation on side of the Corporate Debtor. 2. However, the Corporate Debtor had appeared earlier and filed their reply and the notice of the date of hearing was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019. the chronology of the dates of default and the instalments paid by the Corporate Debtor as per the Bank Statement submitted and which has been not denied by the Corporate Debtor is as under:- PARTICULARS DATE AMOUNTS IN Rs. DATE OF DEFAULT 30/11/2013 - DATES AND AMOUNT ON WHICH THE INSTALMENTS WAS PAID BY THE CORPORATE DEBTOR REFER PAGE (252-256) OF THE BANK STATEMENT 13/10/2014 13/10/2014 31/12/2014 13/10/2014 09/01/2015 13/10/2014 28/02/2015 13/10/2014 26/03/2015 13/10/2014 11/06/2015 13/10/2014 07/07/2015 13/10/2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the SARFAESI Act may not have formally been terminated. The proceedings have however been stayed by the High Court by an interim order, on the prima facie satisfaction that the proceedings initiated by the financial creditor, which is a cooperative bank, was without jurisdiction. The writ petition filed by the Corporate Debtor was not disposed of even after almost four years. The carriage of proceedings was with the Corporate Debtor. The interim order was still in force, when proceedings under Section 7 of the IBC were initiated, as a result of which the Financial Creditor was unable to proceed further under the SARFAESI Act. 86. In the instant case, even if it is assumed that the right to sue accrued on 31.3.2013 when the account of Corporate Debtor was declared NPA, the financial creditor initiated proceedings under SARFAESI Act on 18th January 2014, that is the date on which notice under Section 13(2) was issued, proceeded with the same, and even took possession of the assets, until the entire proceedings were stayed by the High Court by its order dated 24th July 2017. The proceedings under Section 7 of the IBC were initiated on 10th July 2018. 87. In our view, since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and setting aside the order dated 21st March 2019 passed by the Adjudicating Authority, admitting the said Petition. 24. In other words, the main question involved in this appeal is, whether a Petition under Section 7 of the IBC would be barred by limitation, on the sole ground that it had been filed beyond a period of 3 years from the date of declaration of the loan account of the Corporate Debtor as NPA, even though the Corporate Debtor might subsequently have acknowledged its liability to the Appellant Bank, within a period of three years prior to the date of filing of the Petition under Section 7 of the IBC, by making a proposal for a One Time Settlement, or by acknowledging the debt in its statutory Balance Sheets and Books of Accounts. 25. Another question which arises for the consideration of this Court is, whether a final judgment and decree of the DRT in favour of the Financial Creditor, or the issuance of a Certificate of Recovery in favour of the Financial Creditor, would give rise to a fresh cause of action to the Financial Creditor to initiate proceedings under Section 7 of the IBC within three years from the date of the final judgment and decree, and/or wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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