TMI Blog2020 (12) TMI 1395X X X X Extracts X X X X X X X X Extracts X X X X ..... uary, 2017 only tell us that the review committee had declined to review the order of the decision of the identification committee. When a relevant fact is not considered while exercising this discretion, the considerations are different and the appeal court has the jurisdiction to set aside or modify the interim order appealed against - It is true that this order of the NCLT was not in existence at the time the review was made by the said committee. It is in existence now. For doing complete justice to the case, it is important that this development is also considered by the review committee. Fresh opportunity granted to the appellants to approach the review committee - application disposed off. - HON BLE JUSTICE I. P. MUKERJI AND HON BLE JUSTICE MD. NIZAMUDDIN For the Appellant : Mr. Jishnu Saha, Mr. Raghunath Ghosh, Mr. Ishan Saha, Mr. P. Ghosh. For the Respondent : Mr. Rahul Karmakar, Mr. Ranajit Chowdhury, Ms. Bandana Nayak, Ms. Ankita Upadhyay, Mr. Arnab Basu Mallick. JUDGMENT I.P. MUKERJI, J. No organisation or businessman wants to be labelled as a wilful defaulter by a bank or a financial institution. With this label on the head, the organisation or the businessman would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the company had the capacity to pay but was not repaying the loan of the bank. It was regularly paying interest on loan and the loan instalments to the consortium banks. Hence, this default was construed as wilful default and the appellants classified as wilful defaulters by the Committee for Identification of wilful defaulters according to the Master Circular dated 1st July, 2015 of the Reserve Bank of India in their meeting held on 10th August, 2016 and 17th August, 2016. Furthermore, this decision was placed before the Review Committee for wilful defaulters headed by the Managing Director and Joint Executive Officer. This committee confirmed the decision dated 10th August, 2016 and 17th August, 2016 declaring, inter alia, the appellants as wilful defaulters after a meeting held on 14th December, 2016. Before proceeding any further with this appeal I think it is necessary to consider some definitions contained in the said Master Circular of the Reserve Bank of India. 2.1.2 Unit : The term unit includes individuals, juristic persons and all other forms of business enterprises, whether incorporated or not. In case of business enterprises (other than companies), banks/Fls m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Senior Advocate appearing for the appellant raised three basic points challenging the said decision of Vijaya Bank. His first point was that before declaring the appellants as wilful defaulters their track record was not gone into as required by Clause 2.1.3 (a) of the Master Circular. Secondly, the adjudication order was not served upon his clients. Hence, they were unable to make an application for review. In any event, the review under the said circular was done by the concerned committee without giving an opportunity to the appellants to represent their case and without any reasons. Thirdly, the resolution of the insolvency under the said scheme or plan, approved by NCLT, necessarily meant that the bank could not make a separate claim against the appellants or declare them as wilful defaulters. In any event he submitted that approval of this plan by NCLT showed that the appellants could not be described as wilful defaulters. Mr. Karmakar for the bank raised two fundamental points. He contended that the writ application was vitiated by delay and ought to have been dismissed. Though it was not dismissed by the learned single judge, he refused to grant any interim order. This exer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants were charge sheeted under this provision of the circular. The said clause also provides that in ascertaining the mental element of the borrower, his track record, obviously with regard to repayment of loan has to be scrutinised by the bank. There is nothing in the communication dated 4th January, 2017 to suggest that the committee for identification of wilful defaulters in their meeting held on 10th August, 2016 and 17th August, 2016 considered the track record of the appellants. The reason given, namely that the asset is standard with ten other consortium members which shows that the company was regularly paying interest/ instalments to the banks but willingly not paying our dues is not convincing at all. This court expected more detailed reasons which should be based on facts as to why in the opinion of the bank, the appellants were deliberately not paying their dues. There is neither any such discussion in the order of the review committee. The rights of an alleged wilful defaulter are now circumscribed by the judgment of the Supreme Court reported in State Bank of India Vs. Jah Developers Pvt. Ltd. Ors. reported in (2019) 6 SCC 787. This judgment lays down some very import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, the NCLAT judgment must also be set aside on this count. A Division Bench judgment of this court dated 18th September, 2020 on the same point is: FMA 906 of 2020 (MAT 494 of 2020) with IA No. CAN 3 of 2020 (CAN 4730 of 2020) (Axis Bank Limited Vs. Gaurav Dalmia Ors.) with COT 36 of 2020 CAN 1 of 2020 (CAN 5809 of 2020) (Axis Bank Limited Vs. Gaurav Dalmia Ors.) with FMA 907 of 2020 (MAT 495 of 2020) with IA No. CAN 3 of 2020 (CAN 4734 of 2020) (Axis Bank Limited Vs. Raghu Hari Dalmia Ors.) with COT 35 of 2020 IA No. CAN 1 of 2020 (CAN 5804 of 2020) (Axis Bank Limited Vs. Raghu H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted in 1990 (Supp) SCC 727 and Purshottam Vishandas Raheja and Anr. vs. Shrichand Vishandas Raheja (Dead) through LRS. and Ors. reported in (2011) 6 SCC 73 presupposes that the appeal court sits in judgment over the same set of facts that were before the trial court. In such a case, it would not interfere with the plausible view taken by that court or would not interfere with its discretion unless it was shown that it was exercised arbitrarily, capriciously, perversely or against law. When a relevant fact is not considered while exercising this discretion, the considerations are different and the appeal court has the jurisdiction to set aside or modify the interim order appealed against. Even if we assume that this point was not raised before the court below, we are taking it into account for doing complete justice between the parties. It is true that this order of the NCLT was not in existence at the time the review was made by the said committee. It is in existence now. For doing complete justice to the case, it is important that this development is also considered by the review committee. For all those reasons, we grant a fresh opportunity to the appellants to approach the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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