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TMI Blog2024 (4) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... and vigilant in pursuing the main company application and had taken steps to file the substitution application. Want of diligence or wilful inaction is attributable only when something that is required to be done is not done at all or not done in a timely manner - there are no delay or negligence on the part of the Appellant to deprive him of his statutory and legitimate right to prosecute the main company petition. The Adjudicating Authority in the impugned order, on the one hand, has held that the Appellant had stepped into the shoes of the Bank of Baroda and had the same right against the Corporate Debtor as that of Bank of Baroda including all rights exercisable under the IBC - Appellant cannot be treated as the original applicant of the main company petition and hence the said petition cannot be restored by the Appellant. The Adjudicating Authority further held that in terms of Rule 48 of NCLT rules, 2016, only the original applicant can approach or file an application before the Adjudicating Authority for restoration of the application. The original application has been dismissed on ground of non-appearance of the Bank of Baroda and since in this application, the Appellant wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned Order ) passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench, Court-II) in I.A. No. 660 of 2020 in CP (IB) 574 of 2018. By the Impugned Order, the Adjudicating Authority rejected the said I.A. No. 660 of 2020 filed by Raj Radhe Finance Limited/Appellant to restore the CP(IB) No. 574 of 2018 which had been filed by Bank of Baroda, the original applicant and dismissed for non prosecution. Aggrieved by this impugned order, the present appeal has been preferred by the Appellant. 2. Coming to the factual matrix of the matter, we notice that the Bank of Baroda, the original petitioner, had given a loan to the Corporate Debtor. The Bank of Baroda-Present Respondent No.2 filed a Section 7 application vide Company Petition No. 574/2018 against Corporate Debtor-Present Respondent No. 1 before the Adjudicating Authority. Bank of Baroda had in the meantime assigned the loan to the Appellant which is a Non-Banking Finance Company vide an assignment agreement dated 30.09.2019. Bank of Baroda as the original petitioner filed a pursis on 26.06.2020 before the Adjudicating Authority bringing on record the assignment of the debt to the Appellant. The Appellant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assailing the impugned order, it was vehemently contended that the decision of the Adjudicating Authority is contrary to established principles of law. In support of their contention, reliance has been placed on the judgement of this Tribunal in the matter of Siti Networks Ltd vs Assets Care and reconstruction Enterprises Ltd in CA (AT)(Ins)No.1499/2022 wherein it has been held that there is no prohibition in the IBC or any of the Regulations from continuation of proceedings by an assignee once the assignee steps into the shoes of the assignor by virtue of assignment. 4. Refuting the submissions made by the Appellant, the Learned Counsel for the Respondent No.1 submitted that though there was admittedly an assignment agreement between Bank of Baroda and the Appellant, however, no steps were taken by the Appellant to bring on record the assignment agreement or for substitution of the Appellant in place of Bank of Baroda during the pendency of the main company petition. It was also contended that the substitution application was filed on 28.08.2020 which was after the hearing of the main company petition had concluded. Thus, when the Adjudicating Authority was unaware of any substitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assignment of the debt by the original applicant, Bank of Baroda. 8. That the Appellant in turn was keen and vigilant about protecting its own interests as an assignee is also evident from the factum that the Appellant had filed I.A. No 779/2019 in the main company petition. When the I.A. No. 779/2019 came up for hearing before the Adjudicating Authority on 03.08.2020, we also notice that it was brought to the knowledge of the Adjudicating Authority by the Corporate Debtor that the original applicant, Bank of Baroda, had already assigned the debt to the Appellant and that a pursis had been filed to that effect by them. The relevant extracts of the orders of the Adjudicating Authority is as follows: Learned lawyer, Mr. Arjun Sheth appeared on behalf of Applicant and submitted that the Respondent/Original Petitioner has already assigned his debt, to that effect he has filed a pursis. However, as a last chance, the matter is adjourned. Meanwhiule, the Applicant is directed to inform the Respondent along with copy of order of CP(IB) 574/2018. List the matter on 25.08.2020. 9. The Adjudicating Authority after noting the submission made by the Corporate Debtor with respect to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seems to have taken place on 28.08.2020 which was post dismissal of the main company petition. The said application which got subsequently numbered as I.A. No. 887/2020 has been placed on record at pages 96-98 of the APB wherein it has been inter-alia prayed by the Appellant that the Adjudicating Authority may permit the substitution of the name of Bank of Baroda with that of Appellant in the main application. 12. This clearly shows that the Appellant was diligent and vigilant in pursuing the main company application and had taken steps to file the substitution application. Want of diligence or wilful inaction is attributable only when something that is required to be done is not done at all or not done in a timely manner. We do not find any such delay or negligence on the part of the Appellant to deprive him of his statutory and legitimate right to prosecute the main company petition. 13. That the Appellant was not negligent or slack in protecting its interests is also borne out from the fact that after the main company application was dismissed, the Appellant filed I.A. No. 660/2020 on 28.09.2020 seeking restoration of the main company petition as placed at pages 141-149 of APB. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the dismissal of the main company petition. More significantly, we need to take cognisance of the affidavit filed by the Bank of Baroda in IA 660/2020 as placed at page 192-193 of APB wherein it has stated: 2. I state that I am filing this short affidavit for limited purpose of stating and declaring before this Hon ble Adjudicating Authority that the Bank of Baroda has been lender in relation to the debts which are not assigned under the deed of assignment dated 30.09.2019 read with the correction of Assignment Deed dated 30.03.2021 in favor of Raj Radeh Finance Limited is the Assignee of the entire financial debt together with underlying securities in relation to present Corporate Debtor. 3. I say that as Bank of Baroda has already assigned its debts together with underlying securities in favor of the Assignee viz the present applicant, the present application for restoration is made by the applicant. 4. I say that in the facts and circumstances, this Hon ble Adjudicating Authority may be pleased to consider to grant the prayers in the present application. The Adjudicating Authority in the impugned order has also unequivocally held that the assignment of debt of the Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement has already stepped into the shoes of the original petitioner. This assignment has not only been endorsed by the assignor but the assignment agreement between them has also been acknowledged by the Corporate Debtor who has also chosen to place the agreement on record before the Adjudicating Authority on 25.08.2020. The Adjudicating Authority has also expressly acknowledged this position by stating that following the assignment agreement, the Appellant had stepped into the shoes of the original applicant, Bank of Baroda. The Adjudicating Authority has further opined in the impugned order that the Appellant enjoyed the same right against the Corporate Debtor as that of Bank of Baroda. It also held that the Appellant as an assignee was entitled to all rights exercisable under the IBC. That being the case, we are of the considered view that the Appellant clearly qualifies to be an applicant under the NCLT Rules and therefore enjoys the locus to file the restoration application before the Adjudicating Authority. 18. When an application which is dismissed for non-appearance of the petitioner can be restored on satisfying the Tribunal that he was prevented by some sufficient cau ..... X X X X Extracts X X X X X X X X Extracts X X X X
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