TMI Blog2023 (2) TMI 1235X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Corporate Debtor praying for dismissal of Section 7 Application on which application the Adjudicating Authority passed the order on 19.01.2023 taking note of the Application and granted time to Financial Creditor to file Reply since it has waived notice. Adjudicating Authority categorically directed that the Reply be filed before the adjourned date after duly serving copy to the Corporate Debtor. The Adjudicating Authority, it having already issued notice on the application, granted time to the Financial Creditor to reply the Application, ought to have considered the Application. At this stage when the Application has not been considered, it is not necessary to express any opinion on the merits of the Application which may prejudice the parties before the Adjudicating Authority. Let Adjudicating Authority consider the Application and pass fresh order both on Application IA No. 210 of 2023 and Section 7 Application in accordance with law. - Justice Ashok Bhushan, Chairperson And Mr. Barun Mitra, Member (Technical) For Appellant : Mr. Krishnendu Dutta, Sr. Advocate with Mr. Utsav Mukherjee, Ms. Smriti Churiwal, Mr. Jaiveer Kant, Ms. Deepti and Mr. Palash S Sing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Applicant, Corporate Debtor is present. It is observed that the main Company Petition is heard extensively and was Reserved for Orders on 14.12.2022. The present Interlocutory Application is filed by the Corporate Debtor for brining on record assignment of Debt. Ld. Counsel for the Respondent, Financial Creditor is present and waives service of notice and seeks time to file Reply. Let the same be done well before the adjourned date by duly serving copy to the other side well in advance. List this matter on Board on 21.02.2023. 4. Subsequent to the order dated 19.01.2023, the Adjudicating Authority by the Impugned order dated 10.02.2023, admitted the Section 7 Application. 5. Shri Krishnendu Dutta, learned Sr. Counsel appearing for the Appellant contends that when the Corporate Debtor had filed an Application praying for dismissal of the Application and it was entertained on 19.01.2023 and 21.02.2023 was the date fixed in the Application, there was no occasion for the Adjudicating Authority to admit Section 7 Application. It is submitted that the Adjudicating Authority ought to have considered the consequences of assignment in the Application no. 210 of 2023. 6. Mr. Ramj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication No. 3769 of 2022, i.e., on 14th December, 2022, it has already agreed to assign the (alleged) debt of the Applicant, as well as the debts of the Principal Borrowers in favour of the J.C. Flowers Asset Reconstruction Private Limited (hereinafter referred to herein as JC Flower ARC ). It is obvious that the Respondent was in discussions with JC Flower ARC to enter into terms of assignment of the debt much prior to 14th December 2022 as the total debt being assigned was in the sum upwards of Rs. 4,80,00,00,00,000/- (Rupees Forty-Eight Thousand Crores) which would require an extensive amount of time, deliberation and due diligence by the parties involved. 5. The Applicant states that, on 30th December 2022 the Respondent addressed letters to the Principal Borrowers and the present Applicant respectively, thereby intimating the addresses that, pursuant to the execution of Assignment Agreement dated December 16, 2022 between YBL and JCF ARC ( Assignment Agreement ), we have absolutely assigned and transferred, unto and in favour of JCF ARC, the Loans and all the amounts due and monies stipulated in or payable under the Financing Documents by the Borrower to YBL, togeth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding anything contained in any agreement or any other law for the time being in force, any securitisation company or reconstruction company may acquire financial assets of any bank r financial institution- (a) by issuing a debenture or bond or any other security in the nature of debenture, for consideration agreed upon between such company and the bank or financial institution, incorporating therein such terms and conditions as may be agreed upon between hem; or (b) by entering into an agreement with such bank or financial institution for the transfer of such financial assets to such company on such terms and conditions as may be agreed upon between them. (2) If the bank or financial institution is a lender in relation to any financial assets acquired under sub- section (1) by the securitisation company or the reconstruction company, such securitisation company or reconstruction company shall, on such acquisition, be deemed to be the lender and all the rights of such bank or financial institution shall vest in such company in relation to such financial assets. (3) Unless otherwise expressly provided by this Act, all contracts, deeds, bonds, agreements, powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Application could have been continued and would not have been prejudicially affected by reason of acquisition of the financial asset. But present is the case, where an application has been filed by the Corporate Debtor praying for dismissal of Section 7 Application on which application the Adjudicating Authority passed the order on 19.01.2023 taking note of the Application and granted time to Financial Creditor to file Reply since it has waived notice. Adjudicating Authority categorically directed that the Reply be filed before the adjourned date after duly serving copy to the Corporate Debtor. 12. Hon ble Supreme Court in the matter of Sharadamma Vs. Mohammed Pyrejan (Dead) through Legal representatives and Another .(supra) where the Hon ble Supreme Court had occasion to consider order 22, Rules 10 11 of Civil Procedure Code after noticing the aforesaid provisions in paragraphs 4 5, the following have been laid down: 4. Order 22 Rule 10 and Order 22 Rule 11 CPC are extracted hereunder: Order 22 Rules 10 11 10. Procedure in case of assignment before final order in suit. (1) In other cases of an assignment, creation or devolution of any interest d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... press any opinion on the merits of the Application which may prejudice the parties before the Adjudicating Authority. The fact that the Adjudicating Authority itself has fixed the date 21.02.2022 on the application in the same CP(IB) 301(MB) 2022, before considering the said Application it was not be appropriate to deliver the order under Section 7 Application. 15. The submission of Mr. Ramji Srinivasan that after reserving of the order, several applications are filed and if notices are issued, that should not prejudice the matter which has already been reserved, does not appeal to us. In the present case, the Adjudicating Authority has issued Notices and prayer of the Financial Creditor to file Reply was acceded to, it was necessary to decide the said application. Hence, before the date fixed for consideration of the case, the Adjudicating Authority ought not to have admitted Section 7 Application. In view of the above, we allow this Appeal and set aside the order dated 10.02.2022. I.A. No. 210/2023 may be considered by Adjudicating Authority and dispose of in accordance with law. We make it clear that we are not expressing any opinion on the merits of Section 7 Application and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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