Unitek Power Solutions India Ltd. v. JM Financial Asset Reconstruction Company Ltd.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SUNIL THOMAS** **WEDNESDAY, THE 25TH DAY OF SEPTEMBER 2019 / 3RD ASWINA, 1941** ## **OP(C).No.268 OF 2019** **AGAINST THE ORDER/JUDGMENT IN CP 91/ IB OF 2018 OF NATIONAL COMPANY LAW TRIBUNAL, CHENNAI** ## **PETITIONER/RESPONDENT:** **M/S.UNITEK POWER SOLUTIONS INDIA LTD., HAVING ITS REGISTERED OFFICE AT XVIII/135, MASJID ROAD, ALUVA, ERNAKULAM, KERALA- 683101, REP. BY ITS MANAGING DIRECTOR, JOHN ZACHARIA, AGED 50 YEARS, S/O.LATE M.K.JOHN, MARIKUDIYIL HOUSE, PAZHANGANADU KARA, KIZHAKAMBALAM P.O., KIZHAKAMBALAM VILLAGE, ERNAKULAM DISTRICT- 683562.** **BY ADV. SRI.G.SREEKUMAR (CHELUR)** ## **RESPONDENT/PETITIONER:** **M/S.JM FINANCIAL ASSET RECONSTRUCTION COMPANY LTD.,HAVING ITS REGISTERED OFFICE AT 7TH FLOOR, CNERGY, APPASAHEB MARATHE MARG, PRABHADEVI, MUMBAI, MAHARASHTRA- 400025, REP. BY ITS AUTHORISED SIGNATORY.** **R1 BY ADV. SRI.K.N.SIVASANKARAN R1 BY ADV. SRI.SUNIL SHANKER** **THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 25.09.2019, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **OP(C).No.268 OF 2019** **2** ## **JUDGMENT** **The petitioner herein assails Ext.P3 order dated 01.01.2019 in C.P.No.91/IB of 2018 of the National Company Law Tribunal, Chennai.** **2. The respondent herein, being a financial creditor, initiated corporate insolvency resolution proceedings under Section 7(1) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to be as the Code) as against the petitioner herein who was the corporate debtor.** **3. Petitioner herein appeared and filed an affidavit admitting the liability. Pursuant to it Ext.P3 order was passed directing the commencement of Corporate Insolvency Resolution Process and appointed an IRP, as proposed by the financial creditor. He was directed to take charge of the corporate debtors management immediately. This order is assailed by the petitioner herein.** **4. Heard the learned counsel for the** **OP(C).No.268 OF 2019** **3** **petitioner and the learned counsel for the respondent.** **5. The main contention of the learned counsel for the petitioner herein was that, the application was time barred. According to the counsel it ought to have been filed within three years from the date of default. According to the petitioner, the date of default as evident from the Ext.P1 application was 31.01.2011. Ext.P1 application was filed only on 10.01.2018. Hence it was patently barred by limitation. Consequently, the entire** **proceedings before the authority was not sustainable and hence the order is liable to be quashed.** **6. It was further contended that, the question of limitation was considered by the Hon'ble Supreme Court in Ext.P5 judgment in Civil Appeal No.23988 of 2017 in B.K. Education Service (P) Ltd v. Parag Gupta and Associates (2018 SCC Online SC 1921). In that, the Hon'ble Supreme** **OP(C).No.268 OF 2019** **4** **Court, considered the question whether the limitation as provided under Section 238 A of Code, applied to applications made under Section 7 or Section 9 of Code during the period from 01.12.2016 till 06.06.2018. Answering the issue, the Hon'ble Supreme Court, held that the Limitation Act was applicable to applications filed under Section 7 and 9 of the Code from the date of inception of the Code and Article 137 of the Limitation Act gets attracted.** **7. In a later decision of the Hon'ble Supreme Court in Gaurav Hargovindbai Dave v. Asset Reconstruction Company (India) Ltd. & another in Civil Appeal No.4952 of 2019, reiterating the principle in B.K. Education's case (supra) it was held that an application under Section 7 of Code was governed by Article 137 of the Limitation Act.** **8. In the light of these decisions, it was contended by the learned counsel for the** **OP(C).No.268 OF 2019** **5** **petitioner that the application is patently hit by Limitation Act and hence, the impugned order cannot survive in the bye of law. It was hence contended that the Court below, ought to have considered this before passing the impugned order. To support this contention, the learned counsel relied on the decision in Gagandeep Pratishthan Pvt. Ltd. & Others v. Mechano & Another 2002 (1) SCC 475.** **9. Answering this, the learned counsel for the respondent contended that the limitation period will not run from 31.03.2011 as contended. The learned counsel, invited my attention to Ext.P1 application at page 20, wherein there is a specific reference that O.A.No.376/2013, was initiated before the Debt Recovery Tribunal, Ernakulam. The learned counsel for the petitioner contended that, essentially, this indicates that it was not a stale or dormant claim and the recovery was being pursued. The learned counsel** **OP(C).No.268 OF 2019** **6** **for the respondent herein further contended that, this shows that it was not a pure question of law, but a mixed question of law and fact, which cannot be determined in an application under Article 227 of the Constitution of India. On facts, I feel that, the learned counsel for the respondent is justified in so contending.** **10. The learned counsel for the petitioner further contended that, notwithstanding the provision under Section 61 of the IDB Code, the petitioner is justified in approaching this Court, since Section 61(3) enables the petitioner herein to assail Ext.P3 order only on limited grounds mentioned therein. It was hence contended that, the original petition under Article 227 of the Constitution of India is maintainable.** **11. The learned counsel for the respondent contended that Section 61 provides for an appellate Forum and the grounds for attack are not confined to those five grounds mentioned in** **OP(C).No.268 OF 2019** **7** **Section 61(3)and 61(4) of Code. It was also contended that, the normal procedure of passing through the authorities and appellate authorities contemplated under the Code will have to be followed by the parties. Evidently, no exceptional circumstances has been made out by the petitioner to establish why the above procedure is bye passed and jurisdiction under Section 227 of the Constitution is invoked.** **12. The maintainability of the petition was seriously challenged by the learned counsel for the respondent. It was contended that this Court in exercise of jurisdiction of Article 227 of the Constitution of India, cannot exercise the right of superintendence over the statutory authority involved herein, which is the National Company Law Tribunal at Chennai, passed Ext.P3 order. It was pointed out by the learned counsel for the respondent that, the bench of the National Company Law Tribunal at Chennai, which has exercised** **OP(C).No.268 OF 2019** **8** **jurisdiction in this case and this Court has no right of superintendence over that authority.** **13. It seems that, this point is concluded by the judgment of this Court in Madhyamam Broadcasting Ltd. v. Asianet Satellite Communications Ltd. (MANU/KE/1800/2017), in which on an identical issue regarding the orders passed by the TDSAT, New Delhi, this Court relying on Radhey Shyam & Another v. Chhabi Nath & Others (2015 (5) SCC 423) held that Article 227 of Constitution of India does not confer power of superintendence on the High Court over Courts and Tribunals beyond the territory of the state. Evidently, this Court has no jurisdiction over the National Company Law Tribunal, Chennai, which has passed Ext.P3 order.** **14. Above all, it is also to be noted that, at no point of time the petitioner herein raised the question of limitation. It is seen that, the** **OP(C).No.268 OF 2019** **9** **petitioner herein appeared before the authority and filed Ext.P2 affidavit, accepting the liability. The authority took cognizances of the issue on the basis of this affidavit and proceeded to pass orders. This is seen noted in Ext.P3 order itself at page 2. The authority by Ext.P3 took note of the fact that the petitioner herein was trying to delay the proceedings. Thereafter, the Court noted at Para 13 that a fair chance was given to the corporate debtor for stating his defence, in which he submitted that the corporate debtor has nothing to argue on merits and the liability was already admitted by the affidavit dated 09.07.2018. This resulted in Ext.P3 order.** **15. It is also to be noted that the petitioner herein approached this Court by filing W.P. (C).No.11535/2019 and obtained an interim order. It was not pursued thereafter. It was much later the present original petition was filed through another counsel and again interim order was** **OP(C).No.268 OF 2019** **10** **sought. Since the earlier W.P. was not disclosed, W.P.(C)No.11535/2019, was posted along with this original petition. There was no representation for the petitioner. Hence W.P.(C) was dismissed for non prosecution. This Court cannot refrain from taking note of the conduct of the petitioner herein.** **16. Having evaluated the entire facts, I find that the original petition is not sustainable and no relief can be granted to the petitioner herein.** **Accordingly, the original petition (civil) fails and is dismissed.** **Sd/-** **SUNIL THOMAS JUDG** **VPK** **OP(C).No.268 OF 2019** **11** ## **APPENDIX OF OP(C) 268/2019** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 A TRUE COPY OF THE APPLICATION IN C.P.NO.91/IB OF 2018 ON THE FILES OF THE NATIONAL COMPANY LAW TRIBUNAL, CHENNAI, DATED 10.01.2018.** **EXHIBIT P2 A TRUE COPY OF THE AFFIDAVIT DATED 09.07.2018 FILED IN C.P.NO.91/1B OF 2018 ON THE FILE OF THE NATIONAL COMPANY LAW TRIBUNAL, CHENNAI.** - **EXHIBIT P3 A TRUE COPY OF THE ORDER DATED 01.01.2019 IN C.P.NO.91/1B OF 2018 ON THE FILES OF THE NATIONAL COMPANY LAW TRIBUNAL, CHENNAI.** - **EXHIBIT P4 A TRUE COPY OF THE NOTIFICATION NO.3683(E) DATED 27.07.2018 ISSUED BY MINISTRY OF CORPORATE AFFAIRS, GOVERNMENT OF INDIA.** **EXHIBIT P5 A TRUE COPY OF THE JUDGMENT OF THE HON'BLE APEX COURT IN CIVIL APPEAL NO.23988/2017 DATED 11.10.2018.** **RESPONDENT'S/S EXHIBITS:** **EXHIBIT R1 TRUE COPY OF CERTIFIED EXTRACT OF ORDER SHEET OF HEARING OF NCLT** **EXHIBIT R2 TRUE COPY OF NOTIFICATION NO.S.O.1935(E) ISSUED BY MINISTRY OF CORPORATE AFFAIRS, GOVERNMENT OF INDIA** **//TRUE COPY //** **PA TO JUDGE** **VPK**