Karnataka High Court
Miller Traders Private Limited vs Canara Bank on 15 February, 2024
Author: P.S. Dinesh Kumar
Bench: P.S. Dinesh Kumar
W.P. No.1538/2024
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF FEBRUARY, 2024
PRESENT
THE HON'BLE MR. P.S. DINESH KUMAR, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE T.G. SHIVASHANKARE GOWDA
WRIT PETITION NO.1538 OF 2024 (GM-RES)
BETWEEN:
MILLER TRADERS PRIVATE LIMITED
A COMPANY WITHIN THE MEANING
OF COMPANY UNDER THE
COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE
NO.9, EZRA STREET
KOLKATA-700 001
REPRESENTED BY ITS
AUTHORIZED SIGNATORY
MR. SUJIT DUTTA ROY ...PETITIONER
(BY SHRI. MANU PRABHAKAR KULKARNI, ADVOCATE)
AND:
1. CANARA BANK
ARM BRANCH
NO.86, SPENCER TOWER
M.G.ROAD, BENGALURU
REPRESENTED BY ITS
CHIEF MANAGER
2. DUNLOP POLYMERS PVT. LTD.,
A COMPANY WITHIN THE
MEANING OF COMPANY
W.P. No.1538/2024
2
UNDER THE COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
PLOT NO.139C, BELAGOLA
INDUSTRIAL AREA
METAGALLI INDUSTRIAL ESTATE ROAD
MYSORE-570 016
UNDER CORPORATE INSOLVENCY
RESOLUTION PROCESS
REPRESENTED BY ITS
RESOLUTION PROFESSIONAL
3. SUBHLAXMI COMPUSIS PVT. LTD.,
A COMPANY WITHIN THE
MEANING OF COMPANY
UNDER THE COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
9, EZRA STREET
KOLKATA-700 001
REPRESENTED BY ITS
AUTHORISED REPRESENTATIVE
4. SURYAMANI FINANCING COMPANY LTD.,
A COMPANY WITHIN THE MEANING
OF COMPANY, UNDER THE
COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
9, EZRA STREET, TOP FLOOR
ROOM NO.47, KOLKATA-700 001
REPRESENTED BY ITS
AUTHORISED REPRESENTATIVE
5. DAHISAR TRADERS PVT. LTD.,
A COMPANY WITHIN THE
MEANING OF COMPANY
UNDER THE COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
2/7, SARAT BOSE ROAD,
VASUNDHARA, 6TH FLOOR
SPACE NO.7, KOLKATA-700 020
REPRESENTED BY ITS
AUTHORIZED REPRESENTATIVE
W.P. No.1538/2024
3
6. NANDAKINI CONTRACTORS PVT. LTD.,
A COMPANY WITHIN THE
MEANING OF COMPANY
UNDER THE COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
9 EZRA STREET
KOLKATA-700 001
REPRESENTED BY ITS
AUTHORIZED REPRESENTATIVE
7. KANTI COMMERCIALS PVT. LTD.,
A COMPANY WITHIN THE
MEANING OF COMPANY
UNDER THE COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
1, ZUMRUDPUR COMMUNITY CENTER
KALIASH COLONY EXTENSION
NEW DELHI-110 048
REPRESENTED BY ITS
AUTHORISED REPRESENTATIVE
8. LUNI HOUSING AND DEVELOPERS
PVT. LTD., A COMPANY WITHIN THE
MEANING OF COMPANY
UNDER THE COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
5A, ANANDILAL PODDAR SARANI
1ST FLOOR, KOLKATA-700 071
REPRESENTED BY ITS
AUTHORISED REPRESENTATIVE
9. SWAPANLI TRADE AND COMMERCE PVT LTD.,
A COMPANY WITHIN THE
MEANING OF COMPANY
UNDER THE COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
29A , WESTON STREET, 3RD FLOOR
ROOM NO.C5, KOLKATA-700 012
REPRESENTED BY ITS
AUTHORIZED REPRESENTATIVE
W.P. No.1538/2024
4
10. STEPHENS FINANCIAL SERVICES PVT LTD.,
A COMPANY WITHIN THE
MEANING OF COMPANY
UNDER THE COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
9, EZRA STREET
KOLKATA-700 001
REPRESENTED BY ITS
AUTHORIZED REPRESENTATIVE
11. KANPUR PROPERTIES AND FINANCE PVT LTD.,
A COMPANY WITHIN THE
MEANING OF COMPANY
UNDER THE COMPANIES ACT, 2013
HAVING ITS REGISTERED OFFICE AT
9, EZRA STREET, 1ST FLOOR
ROOM 23, KOLKATA-700 001
REPRESENTED BY ITS
AUTHORISED REPRESENTATIVE ...RESPONDENTS
(BY SHRI. HEMANTH S. RAO, ADVOCATE FOR C/R1)
[THROUGH VIDEO CONFERENCE]
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE
COMMON ORDER DATED 07/12/2023 PASSED BY THE HON'BLE
NATIONAL COMPANY LAW TRIBUNAL, SPECIAL BENCH, BENGALURU
(ANNEXURE-A) IN IA NO.575/2022 FILED BY THE RESPONDENT NO.1
AND IA NO.326/2023 FILED BY THE PETITIONER IN C.P.(IB)
NO.123/BB/2019.
THIS WRIT PETITION, HAVING BEEN HEARD AND RESERVED
FOR ORDERS ON 23.01.2024, COMING ON FOR PRONOUNCEMENT OF
ORDERS THIS DAY, CHIEF JUSTICE PRONOUNCED THE FOLLOWING:-
W.P. No.1538/2024
5
ORDER
This writ petition is presented with following prayers:
"(i) Set aside the common order dated 07.12.2023 passed
by the Hon'ble National Company Law Tribunal, Special
Bench, Bengaluru (Annexure "A") in I.A. No.575/2022 filed
by the Respondent No.1 and I.A No.326/2023 filed by the
Petitioner in C.P. (IB) No.123/BB/2019;
(ii) Consequently, dismiss I.A. No.575/2022 filed by the
Respondent No.1 and allow I.A. No.326/2023 filed by the
Petitioner in C.P. (IB) No.123/BB/2019 before the Hon'ble
National Company Law Tribunal, Special Bench, Bengaluru;
(iii) Pass such other order(s) as this Hon'ble Court may deem
fit, in the interest of justice and equity."
2. We have heard Shri. Manu Prabhakar Kulkarni,
learned Advocate for the petitioner and Shri. Hemanth S
Rao, learned Advocate for respondent No.1.
3. Brief facts of the case are, petitioner-Miller Traders
Pvt Ltd. is a financial creditor of the respondent No.2. By
loan agreement dated 05.11.2015, respondent No.2-Dunlop
Polymers Pvt. Ltd. availed loan of Rs.3 crores, out of which,
it defaulted in making payment of Rs. 48,48,699/-. On
18.02.2019, petitioner initiated CIRP1 under Section 7 of the
Insolvency and Bankruptcy Code, 2016 before the NCLT2and
petitioner was made a member of COC3. In the said CIRP4,
respondent No.1- Canara Bank filed I.A.No.575/2022 on
20.10.2022, with a prayer inter alia to declare the petitioner,
respondents No.2-5 (therein) as related parties of corporate
debtor; to appoint Shri. Kenekal Chandrashekhar as RP5
and to reconstitute COC. On 28.04.2023, petitioner filed
I.A.No.326/2023 praying inter alia to appoint
IPR6/chairperson to conduct meeting of COC for the purpose
of appointing RP.
4. On 03.06.2023, respondent No. 1 filed its objections
to I.A. No. 326/2023. On 22.09.2023, both the I.A.s were
listed. The NCLT directed the parties to file written
Corporate Insolvency Resolution Process
National Company Law Tribunal
Committee of Creditors
in C.P. (IB) No. 123/BB/2019
Resolution Professional
Interim Resolution Professional
statement within a period of 10 days and reserved both the
I.A.s for orders.
5. Respondent No.1 filed its written statement on
25.09.2023.On 05.10.2023 and 06.10.2023, petitioner filed
two applications to recall the order dated 22.09.2023 and
the same were not considered. On 18.10.2023, petitioner
filed its written statement. On 07.12.2023, the NCLT allowed
I.A. No. 575/2022 filed by respondent No.1 and dismissed
I.A. No. 326/2023 filed by petitioner. Aggrieved by the said
order, petitioner has presented this writ petition.
6. Shri. Kulkarni, for the petitioner, assailing the
impugned order, submitted that:
• the NCLT has not considered the case of petitioner;
• on 18.10.2023, petitioner filed its written submission
after filing the applications seeking to recall the order
dated 22.09.2023 to permit the petitioner to address
the oral arguments. However, the same were not
considered. The orders on I.A.s were reserved
subject to filling of written statements. The NCLT
ought not to have passed the order as it is in
violation of principles of natural justice.
7. Opposing the writ petition, Shri. Rao, for the
respondent No.1, submitted that:
• in para 53 of the impugned order, the NCLT has
considered the petitioner's case;
• vide order dated 22.09.2023, the NCLT had directed
to file the written statement within a stipulated
period of 10 days. Therefore, petitioner ought to
have filed its written statement within time.
8. We have carefully considered the rival contentions
and perused the records.
9. Undisputed facts of the case are, petitioner is a
financial creditor of the respondent No.2. Upon default
caused by respondent No.2, petitioner initiated CIRP
proceedings. Two I.A.s were filed. I.A.No.575/2022 by the
respondent No.1 and I.A.No.326/2023 filed by petitioner.
On 22.09.2023, the NCLT directed the parties to file written
statement within a period of 10 days and reserved both the
I.A.s for orders. Respondent No. 1 filed its written statement
on 25.09.2023. Petitioner filed application to recall the order
dated 22.09.2023 and the same was not considered.
Thereafter, petitioner filed its written statement on
18.10.2023.
10. Petitioner's specific case is that, though they had
filed applications to recall the order directing them to file
their written statement. The same was not considered.
Therefore, one opportunity may be provided to consider
their case.
11. It is relevant to note that I.A. No. 575/2022 was
filed on 20.10.2022.Petitioner entered appearance on
13.02.2023 and sought two weeks to file its reply.
The matter was called on 16.03.2023 and petitioner sought
time to file objections to the said I.A. Again on 28.04.2023,
petitioner sought time to file objections and filed its I.A. No.
326/2023 on the same date. Respondent No.1 filed its
statement of objections to I.A. No.326/2023 on 03.06.2023.
12. On 06.06.2023, the NCLT recorded that petitioner's
right to file objections to I.A. No. 575/2022 stood forfeited.
Petitioner filed an application to recall on the said order.
The matter was taken up on 21.06.2023. We have perused
the order dated 21.06.2023 (Annexure O). The NCLT after
considering petitioner's grievance provided one more
opportunity to petitioner to file its written statement subject
to payment of cost. The relevant portion of the order reads
as follows:
"1. Heard the Ld. Counsels for the Applicant and R-3.
2. Pursuant to order dated 06.06.2023, Ld. Counsel for the
Applicant has filed clarification on limitation vide Diary
No.3236 dated 21.06.2023. The same is taken on record.
3. On 06.06.2023, the following was observed in respect of
R-3.
"2. Pursuant to notice issued on 02.01.2023, the Ld. Counsel for
the R-3 appeared on 13.02.2023 and sought two weeks' time to
file reply. However, the same was not filed on 16.03.2023.
Again another two weeks' time was granted and it was listed for
28.04.2023. On 28.04.2023, the Ld. Counsel for the R-3
submitted that the objection are ready and the same will be file
today, further she has failed an I.A., therefore requested to list
the same on the next date of hearing.
3. However, in spite of availing substantial time, no reply has
been filed by R-3 till date. Hence, their right to reply is
forfeited."
4. Today, Ld. Counsel appearing for R-3 sought for recalling
of the order dated 06.06.2023 and to permit him to file
objections to this IA. He further submits that he has filed an
IA seeking for recalling of the said order however if not yet
listed
5. In view of the above, Ld. Counsel for the R-3 is directed to
pay costs of Rs.20,000/- (Rupees Twenty Thousand only) to
the Prime Ministers' National Relief Fund and file proof of
payment within one week in order to file objections since the
right was already forfeited on 06.06.2023.
6. List the case on 19.07.2023."
13. Petitioner paid the cost and filed its objection to
I.A. No. 575/2023 on 14.07.2023. Both the I.A.s were listed
together. On 22.09.2023, petitioner sought time to address
the arguments. The NCLT vide order dated 22.09.2023
directed the parties to file written statement within 10 days
from the date of the order and subject to above compliance,
reserved both the I.A.s for orders.
14. Aggrieved, petitioner filed applications to recall the
order dated 22.09.2023. The same was not considered.
Thereafter on 07.12.2023, the NCLT passed orders on both
the I.A.s. Respondent No.1's I.A. No. 575/2022 was allowed
and petitioner's I.A. No. 326/2023 was dismissed.
15. The Apex Court in plethora of judgments has
condemned the act of seeking repeated adjournments on
one or the other pretext and held that adopting dilatory
tactics is an insult to justice and concept of speedy disposal
of cases. (See. Ishwarlal Mali Rathod Vs. Gopal and Ors7.)
16. It is relevant to note that before filing
I.A.No.326/2023, on four occasions i.e, 13.02.2023,
16.03.2023, 28.04.2023, and 21.06.2023, petitioner sought
time to file written statement. Petitioner filed its written
statement on 14.07.2023. Again, on 22.09.2023, one last
opportunity was given to all the parties to file written
statement within a stipulated period of 10 days. However,
SLP (CIVIL) Nos.14117-14118 OF 2021
petitioner did not choose to file the written statement. After
recalling applications, petitioner had filed the written
statement on 18.10.2023.
17. We may also record that the NCLT in para 4 of its
order in I.A.No.575/2022, has held that respondent no.3
(petitioner herein) had filed the statement of objections vide
Dy.No. 3725 dated 14.07.2023 and also recorded the
contentions. Further in para 6 of its order, the NCLT has
recorded that no written submissions were filed pursuant to
the order dated 22.09.2023 within the stipulated period of
time.
18. Based on the facts and circumstances of this case,
we are of the opinion that petitioner has been provided with
sufficient opportunity to file its written statement and
represent the case. When the Court had prescribed a time
frame, petitioner ought to have filed its written statement
within the stipulated time. Hence, the impugned order does
not call for any interference.
19. In light of the above discussion, this writ petition
does not merit any consideration and accordingly, it is
dismissed.
No costs.
Sd/-
CHIEF JUSTICE
Sd/-
JUDGE
SPS
