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TMI Blog2022 (6) TMI 1328X X X X Extracts X X X X X X X X Extracts X X X X ..... he Respondent/Guarantor submitting the aforementioned fact. 3. In response to the above, a counter affidavit dated 11.03.2022 was filed by the Applicant submitting that the present application u/s. 95 of the Code was filed on 01.10.2021 and in terms of Section 96(1) of the Code, interim moratorium commenced on the filing of the application i.e. on 01.10.2021 and subsequently, the Guarantor filed the Section 94 application in C.P.(IB)-788/2021 on 25.10.2021. 4. That the Applicant has filed written submissions and the scanned copy of which is reproduced below: SECTION 94 FILED BY THE RESPONDENT/PERSONAL GUARANTOR IS NOT MAINTAINABLE 1. It is a matter of record that the State Bank of India issued a statutory demand notice dated 29.06.2021 under Section 95(4)(b) of the Insolvency and Bankruptcy Code, 2016 ("Code") to the Respondent in FORM B as per Rule 7(1) of the IBBI (Personal Insolvency) Rules, 2019 calling upon the guarantor to pay Rs. 58,17,07,111/- due as on 02.11.2018. 2. Pursuant to filing the demand notice, the Respondent filed a reply dated 13.07.2021 whereby the Respondent admitted that he was in receipt of the Demand Notice on 01.07.2021. 3. Even otherwise the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of this may constitute a valid ground to refuse to entertain the same. Rule 29: Registration of proceedings admitted. - On admission of appeal or petition or caveat or application, the same shall be numbered and registered in the appropriate register maintained in this behalf and its number shall be entered therein." 5. Pursuant to the above, and keeping in mind the definition of 'filing' as mentioned hereinabove, the Hon'ble NCLAT in the matter of Ravi Ajit Kulkarni vs. State Bank of India [Company Appeal (AT) (Insolvency) No. 316 of 2021], while clarifying the process of initiation of CIRP process for personal guarantors of the Corporate Debtor has held as follows: "25. Section 96 deals with interim-moratorium. As is clear from the section reproduced above, relevant is that when an application is "filed" under Section 95, the interim-moratorium will automatically kick in. Thus, the effect of interim-moratorium immediately starts when the application is "filed" No. adjudication is involved here." 6. It is further submitted that the Hon'ble Supreme Court in the matter of M/s. Surendra Trading Company vs. M/s. Juggilal Kamlapat Jute Mills Company Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of filing of the application, the application would he barred under Article 137 of the Limitation Act, save and except in those cases where, in the facts of the case, Section 5 of the Limitation Act may be applied to condone the delay in filing such application. 10. It is hereby submitted that since the Limitation of default under the Code is also construed from the date of filing of the Application, therefore, in the instant case as well the interim moratorium under Section 96 kicked in on the date of filing of an application, and hence the Application under Section 94 could not have been filed and therefore deserves to be dismissed. Even otherwise in case, the Legislature intended that an interim moratorium would be passed or commence on the date of listing/numbering of an application, then the Legislature would have specifically mentioned the word Scrutinised/Numbered/written the same herein. It is humbly submitted that the Hon'ble Adjudicating Authority will have to interpret the particular provision of law the way it is, similarly, the Hon'ble Supreme Court in the matter of Grasim Industries Ltd. vs. Collector of Customs, Bombay : (2002) 4 SCC 297, has followe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016. Mr. Kadam overlooks the fact that Rule 10 has been inserted so that there is no vacuum. It is only to facilitate the filing of the applications under the sub-section (1) of section 7 and sections9 and 10 that the rule makers have provided the procedure in that behalf in the NCLT Rules, 2016. Thus, only the procedure in relation to filing of application, which has been set out in the NCLT Rules, 2016, is applied until the rules of procedure for conduct of proceedings under the Code are notified. We cannot read sub-rule (1) of Rule 10 as suggested by Mr. Kadam. He would argue that Rules 20 to 26 of Part III of the NCLT Rules, 2016 shall apply and rest of the NCLT Rules, 2016 would not apply. This argument overlooks the fact that the rules of procedure for conduct of proceedings under the Code have yet to be notified, the framers of the rules and the legislature itself did not want a vacuum to be created. Otherwise, there would be no guide at all. A pre-existing or pre-established tribunal functional much before the Code came into force has been chosen for adjudication of the applications under section 7. That is how the term "adjudicating authority" is defined in the Code. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ISLATURE HAVE NOT USED THE WORD "REGISTERED" 14. That a conjoint reading of NCLT Rules as mentioned above, it is evident that under Section 96 the words used are. When an application is filed under Section 94 or 95, an interim moratorium shall commence on date of the application. Admittedly, the date of application can only be construed as date of filing and that is the solitary reason that the Legislature have used the word filed and not registered/numbered. "Filed" as per Rule 2(14) of the NCLT Rules, 2016 means filed in the office of the Registry of the Tribunal. Admittedly in the instant case. Section 95 Application was filed in the Office of the Registry of this Tribunal on 01.10.2021 and therefore, any subsequent application filed by Personal Guarantor or even any other creditor would be hit by Interim Moratorium under Section 96 of the Code. 15. In light of the above it is hereby submitted that the Application filed under Section 94 is an afterthought and filed with mala fide intention, even otherwise it is submitted that Section 96 provides for the initiation of the interim moratorium which was initiated as soon as Application under Section 95 was filed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g documents shall be filed in electronic form, as and when such facility is made available and as directed by the Adjudicating Authority: Provided that till such facility is made available, the applicant may submit accompanying documents, and wherever they are bulky, in electronic form, in scanned, legible portable document format in a data storage device such as compact disc or a USB flash drive acceptable to the Adjudicating Authority. Therefore, for the purposes of seeing as to when an application under Section 94 or Section 95 of the IBC is considered to be "filed" within the meaning of Section 96, it is to be seen whether the same is filed in accordance with Rule 10 of the Rules, which in fact would mean that, an application which is filed in terms of Rule 20-24 and 26 of the NCLT Rules would be considered as "filing" in terms of Section 96 of the IBC Rule 20 to 24 and 26 of IBC is reiterated as under for ready reference: "....Rule 20. Procedure: (1) Every appeal or petition or application or caveat petition or objection or counter presented to the Tribunal shall be in English and in case it is in some other Indian language, it shall be accompanied by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de, and (d) any other particulars necessary to locate and identify the addressee such as fax number, mobile number, valid e-mail address, if any...." "....Rule 22. Initialing alteration:- Every interlineations, eraser or correction or deletion in any appeal or petition or application or document shall be initialled by the party or his authorised representative presenting it..." "......Rule 23. Presentation of Petition or appeal:- (1) Every petition, application, caveat, interlocutor)' application, documents and appeal shall be presented in triplicate by the appellant or applicant or petitioner or respondent, as the case may be, in person or by his duly authorised representative or by an advocate duly appointed in this behalf in the prescribed form with stipulated fee at the filing counter and noncompliance of this may constitute a valid ground to refuse to entertain the same. (2) Every petition or application or appeal may be accompanied by documents duly certified by the authorised representative or advocate filing the petition or application or appeal duly verified from the originals. (3) All the documents filed in the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that is presented to the Registry and not complies with the aforesaid provisions is marked as "defective" Petition by the Registry and therefore, any Petition which is marked defective is evidence of it not being "filed". If the Petition is in the manner as provided under the said Rules, only then it would be considered as "filed" which is evidenced by the numbering of the Petition. The Registry is duty bound to number the Petition if it complies with the conditions of the aforesaid Rules. Therefore, whether the Petition is "filed" or not, is determined by the numbering of the Petition, as otherwise it is defective and cannot be considered as "filing". The act of numbering of Petition is the sole evidence to show and determine that the Petition is "filed" in terms of the Rules as afore-stated. "Filing" under Section 96 means filing not merely a bunch of papers but an act of filing as provided under Rule 10 of the Rules, which in turn, has to be as provided under Rule 20 to 24 and 26 of the NCLT Rules. Therefore, any Petition which is not complying with Rule 20 to 24 and 26 cannot be considered to be filed for the purposes of Section 96 of the IBC, which in other words, means, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition for the purposes of Section 94, 95 and 96 to be "numbering of the Petition" is the law governing the present case as on date and it is humbly submitted that the same is to be followed in terms of stare decisis. Even looking from another angle, which was posed during the course of arguments, that Rule 2(14) of the NCLT Rules states that filed means filed with the Registry. In response to the same, it is submitted that firstly, act of filing in the present case is to be governed by Rule 10 of the Rules and only Rule 20-24 and 26 of the NCLT Rules are applicable by virtue of the same and such definition is not made applicable to the instant case of Section 94 and 95 proceedings. Secondly, even as per the NCLT Rules, more specifically, Rule 2(14) filed with the registry means filed as provided under the NCLT Rules i.e. Rule 20-24 and 26. The law cannot be interpreted to mean that filing is merely filing a bunch of papers not complying with the provisions of law as contained in the NCLT Rules. Therefore, even as per the definition of filed under Rule 2(14) of the NCLT Rules, filed with the Registry means filed as provided under the NCLT Rules, more specifically, Rule 20 to 26 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be dismissed as non-maintainable. 6. In the course of hearing, the Respondent has raised the maintainability of the application on the ground that prior to filing of this application, which was numbered on 18/02/2022, the Respondent has already filed an application, numbered on 22/12/2021, which is prior to the number given to the application filed u/s. 95 of the IBC by the Applicant. 7. He further submitted that in terms of Rule 10 of the IBBI (application to Adjudicating Authority for Insolvency Resolution Process or Personal Guarantor to Corporate Debtor) Rules 2019, the application under Section 94 & 95 of the IBC, 2016 shall be considered in terms of Rule 20, 21, 22, 23, 24 & 26 of the NCLT Rules. 8. He further submits that in terms of Rule 10 of the IBBI (application to Adjudicating Authority for Insolvency Resolution Process or Personal Guarantor to Corporate Debtor) Rules 2019, Rule 2(14) of the NCLT Rules is not applicable. He further submits that the applicant is required to file the application after removing the defects. Therefore, we would like to refer to the following provisions: NCLT Rule 20, 21, 22, 23, 24 & 26 are reproduced below: "20. Proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he road, street, lane and Municipal Division or Ward, Municipal Door and other number of the house; (b) the name of the town or village; (c) the post office, postal district and PIN Code, and (d) any other particulars necessary to locate and identify the addressee such as fax number, mobile number, valid e-mail address, if any. 22. Initialing alteration.-Every interlineations, eraser or correction or deletion in any appeal or petition or application or document shall be initialled by the party or his authorised representative presenting it. 23. Presentation of petition or appeal.-(1) Every petition, application, caveat, interlocutory application, documents and appeal shall be presented in triplicate by the appellant or applicant or petitioner or respondent, as the case may be, in person or by his duly authorised representative or by an advocate duly appointed in this behalf in the prescribed form with stipulated fee at the filing counter and non-compliance of this may constitute a valid ground to refuse to entertain the same. (2) Every petition or application or appeal may be accompanied by documents duly certified by the authorised r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther personally or through a resolution professional, to the Adjudicating Authority for initiating the insolvency resolution process, by submitting an application. (2) Where the debtor is a partner of a firm, such debtor shall not apply under this Chapter to the Adjudicating Authority in respect of the firm unless all or a majority of the partners of the firm file the application jointly. (3) An application under sub-section (1) shall be submitted only in respect of debts which are not excluded debts. (4) A debtor shall not be entitled to make an application under sub-section (1) if he is- (a) an undischarged bankrupt; (b) undergoing a fresh start process; (c) undergoing an insolvency resolution process; or (d) undergoing a bankruptcy process. (5) A debtor shall not be eligible to apply under sub-section (1) if an application under this Chapter has been admitted in respect of the debtor during the period of twelve months preceding the date of submission of the application under this section. (6) The application referred to in sub-section (1) shall be in such form and manner and accompanied with such fee as may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IBC, 2016, when an application is filed under Section 94 & 95, an interim moratorium shall commence on the date of the application in relation to all the debts and shall cease to an effect on the date of admission of such application. Since under Section 96 the word "filed" is referred to therefore, we would like to see the definition of filing as referred to supra. On perusal of the definition referred to supra, we observe that term filed means filed in the office of the Registry of the Tribunal. Nowhere it is mentioned under Section 2(14) of the IBC, 2016 that the filing means the date when the number is given by the Registry on the application filed by the Applicant. Rather word "filed" means the day, when the application is filed or in terms of Section 94 or 95 when the application is submitted in the office of the Registry of the Tribunal, that would be treated as a date for filing of the application. 12. At this juncture, we would like to refer to the scanned copy of the filing receipt issued by the Registry to the applicant and date of filing of respondent application available on the record and same are reproduced below: 13. On conjoint reading of these two documents ..... X X X X Extracts X X X X X X X X Extracts X X X X
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