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TMI Blog2024 (12) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... ercising jurisdiction. HELD THAT:- The view taken by the Hon ble Supreme Court in Swiss Ribbons Pvt. Ltd. and Anr. V/s. Union of India and Ors. [ 2019 (1) TMI 1508 - SUPREME COURT ] is now crystallized that even the non-payment of a part of the debt, when it becomes due and payable, will amount to default on the part of a Corporate Debtor. In such a case, an order of admission under Section 7 of the IBC must follow. If the NCLT notices that there is a debt, but it has not become due and payable, the application under Section 7 can be rejected. When there is a non-payment of debt under Section 3 (12) of the Code, when whole or any part or installment of the amount of debt has become due and payable and is not paid by the debtor or the Corporate Debtor, as the case may be, it would amount to default and the proceeding under Section 7 of the IBC must follow. In view of the above, there are no illegality or error in the order dated 29th October, 2024. Forum shopping - suppression - multipicity of cases - wastage of time of the court - HELD THAT:- The impugned order dated 29th October, 2024, can neither be termed as perverse or illegal. Merely because a different view could be possible, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s arrayed 25 Respondents, which include the learned members of the NCLT-1, Mumbai, Registrar of Companies, Ministry of Corporate Affairs, National Stock Exchange of India Ltd., Ministry of Finance, Ministry of Micro Small and Medium Enterprises, the Reserve Bank of India, through its Governor, etc. 6. The Petitioner has put forth the following prayers in this Writ Petition :- a) Declare that Section 3 of the Judges (Protection) Act of 1985 is unconstitutional and void inasmuch as it affords absolute immunity to judicial officers even where they have acted unfairly and wilfully denied justice; b) Declare that the concept of absolute judicial immunity is antithetical to the concept of rule of law, nay, equality before law and equal protection of law, and further that immunity is available only where a court or tribunal has acted bona fide, lest a litigant who is a victim of wilful denial of justice will be denied the ordinary remedy available to her in tort; c) To declare that Respondent no.22 and 23, namely, the Hon ble Shri Justice VG Bhist, Member Judicial and Hon ble Shri Prabhat Kumar Member (T) of the NCLT-1, Mumbai, are a coram non judice for the twin grounds of (a) bias and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forcement of his remedies has to be read into the said Acts; h) To declare that Section 34 of the RDB Act, Section 34 of the SARFAESI Act and Sections 63 and 231 of the IBC which bar the jurisdiction of the civil court to entertain and adjudicate the Petitioner s/borrower s plea against the ICICI Bank and TDB, any, bank/financial institution, is unconstitutional and void inasmuch as the Petitioners, victims of the gross breach of contract, culpable negligence, malicious and tortious action, so too, violation of the express statutory provisions at the hands of the ICICI Bank and the TDB, are entitled to institute an action/suit as against the ICICI Bank and the TDB for the enforcement of the Petitioner s right as against them; i) To issue a writ in the nature of certiorari or any other appropriate writ, order or directions, calling for the entire records and proceedings leading to the action at the hands of the ICICI Bank under Section 13 (4) and 14 of the SARFAESI Act and Section 19 of the RDB Act; j) To declare that the wilful failure on the part of the NCLT to record in its order dated 29.10.2024 that the Petitioner/her company is not in default and that no amount is due to the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facie null and void and further that the promoters/directors of the company shall be allowed to carry on their business without any obstruction or hinderance and that all authorities shall act accordingly to the oral directions which this Court in its wisdom did not find necessary to reduce writing, the parties being represented by counsel; o) to issue a writ in the nature of prohibition, restraining and prohibiting the ICICI Bank, TDB, IRP, NSEL, SEBI, and the District Magistrate, Thane, from acting in furtherance of order dated 15.7.2024 and subsequent order dated 14.10.2024 of the NCLT-I, Mumbai, to not do anything which will tilt the vinculum juris as on 15.07.2024, and from causing any jeopardy or injury to the interests of the Petitioner and the affairs of its company. 7. By way of ad-interim reliefs, the Petitioner has put forth the following prayers:- a) To stay the operation of the orders of the NCLT-1, Mumbai, dated 15.7.2024 and 29.10.2024 in CP(IB)/322/2023 in the purported exercise of their jurisdiction under Section 7 of the IBC pending final disposal of the instant writ petition; b) To restrain and prohibit Respondent no. 22 and 23, the Hon'ble Members of the NC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (CT) LT Kakinada Ors. V/s. Glaxo Smith Kline Consumer Health Care Limited, (2020) 4 SCR 602, the Hon ble Supreme Court concluded that if a litigant approaches the High Court within the limitation period in which he can prefer an Appeal and the limitation expires during the pendency of the Petition, the High Court may non-suit the Petitioner on the ground that alternate efficacious remedy is available and that be invoked by the Writ Petitioner. It was also held in Glaxo Smith Kline (Supra), that where a right or liability is created by the statute which gives a special remedy, the remedy provided by that statute must only be availed of. The view taken in Titaghur Paper Mills Co. Ltd. Anr. V/s. State of Orissa Ors. (1983) 2 SCC 433 and Mafatlal Industries Ltd. Ors. V/s. Union of India Ors., (1997) 5 SCC 536 , was followed. 11. In the case of Nivedita Sharma V/s. Cellular Operators Association of India Ors., (2011) 14 SCC 337 , the Hon ble Supreme Court has held that though the High Court can entertain a Writ Petition against any order or direction passed/action taken by the State under Article 226 of the Constitution of India, it ought not to do so as a matter of course when the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to have sold off her factory premises and the company office premises and paid an amount of Rs.5.50 Crores, as against the dues of Rs.9.50 Crores. She claims to have cleared 55 % of the amount towards the dues. The Petitioner sought relaxation of the loan account, but the Bank did not pay any heed to the Petitioner s representation. 16. It is contended that ICICI Bank approached the Technology Development Board (for short TDB ) to request it to credit the proceedings of the third tranche of the TDBI Loan to the Petitioner s Banking Account with ICICI Bank, instead of the Bank of India Account, as was done for the earlier two installments. The ICICI Bank mala fide acted against the Petitioner to prevent her from receiving the funds and to arbitrarily adjust the three installments toward the ICICI Bank Loan Account. It is alleged that owing to this action, the TDB went back on its contractual commitment to release the balance amount of Rs. 3.50 Crores to the Petitioner. The third and fourth tranche of the TDB loan amount, were never released. It is contended that the import of foreign technology for the project, came to a grinding halt. The Petitioner was unable to meet the contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67 of 2024, the Petitioner prayed that NCLT be directed not to pronounce the order for four weeks. By order dated 1st April, 2024, this Court requested the NCLT not to pronounced the order on the Petition filed by the TDB for five weeks. 21. The Petitioner preferred a Civil Appeal before the Hon ble Supreme Court bearing Civil Appeal No.7233 of 2024, against the order dated 19th March, 2024 passed by this Court. By order dated 8th July, 2024, the Hon ble Supreme Court requested the Division Bench to hear and decide the Review Petition, on its merits. The parties were directed to appear before the High Court on 18th July, 2024. In Paragraph No.14 of the said order, the Hon ble Supreme Court has noted We also acknowledge various perturbing facts courteously noted by the High Court in the impugned order. We are, however, consciously not referring to the conduct of the appellant or her counsel at this stage. 22. In the meanwhile, considering that the order dated 11th January, 2024, was in relation to several MSMEs and the Petitioner's SLP was dismissed by the Hon ble Supreme Court and the Review was also rejected, other parties to the group of matters, which were dismissed by order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, IBC, N.I Act, will lie, except in the manner contemplated under the said notification, in particular Paragraph 5 (4) (iii) of the same; b) to declare that the MSME Act in so far as it has not created a special forum/tribunal to adjudicate the inter-se rights and obligations/remedies, which it has created in addition to those rights/obligations/remedies recognized by the common law, the jurisdiction of the Civil Court is not ousted, for it is impossible to oust the jurisdiction of the Civil Court without providing for an alternative forum/tribunal to adjudicate the inter se disputes between parties who are governed by the Act; c) to Issue a writ in the nature of prohibition, restraining and prohibiting the IRP, NSEL, SEBI and the District Magistrate, Thane, from acting in furtherance of the order dated 15.7.2024 of the NCLT-I, Mumbai, and to not do anything which will tilt the vinculum juris as on 15.7.2024, and from causing any jeopardy or injury to the interests of the Petitioner and the affairs of its company; d) To declare that the Section 13 of the SARFAESI Act, Section 19 of the RDB Act and Section 7 of the IBC are unconstitutional, ultra vires and void and are liable to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent Bank of India and the ICICI Bank to allow the Petitioners, namely the Directors of Perfect Infraengineers Pvt. Ltd. who were illegally ousted to operate the various accounts maintained by the Company and to cause no obstruction or inconvenience in the smooth operation of the company, and further to direct the IRP to undo whatever hasty steps he has taken in meddling with the affairs of the Petitioner's Company. j) To initiate suo motu contempt of court proceedings against the IRP for the gross breach of the oral directions and orders of this Court in the common orders dated 14.8.2024 in W.P(L) no. 23291/2024; WP(L) no. 23291/2024 and W.P(L) no. 23295/2024 mandating that the IRP shall not take any precipitatory action, making it expressly clear that the 'IRP is yet to be born', the orders of the NCLT being ex facie null and void and further that the promoters/directors of the company shall be allowed to carry on their business without any obstruction or hinderance and that all authorities shall act according to the oral directions which this Court in its wisdom did find to necessary to reduce writing, the parties being represented by counsel. 26. Vide Jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to pass orders in the Company Petition. In such case, the status-quo as directed in Clause (i) here-in-above shall stand vacated forthwith and the CIRP shall continue notwithstanding the present Order. (iii) A chart detailing proceedings instituted by the Petitioner in various forums regarding the same issue is placed on record. The following proceedings pertaining the issue involved in this Petition are pending before various Courts, including this Court: Sr. No. Proceedings Court before which the proceeding is pending 1. Suit (l) No.11395 of 2022 City Civil Court, Mumbai. 2. Appeal From Order No. 552 of 022 High Court, Bombay. 3. Criminal Writ Petition No.3317 of 2022 High Court, Bombay. 4. Criminal Writ Petition No.2570 of 2022 High Court, Delhi. 5. Writ Petition No.4901 of 2022 High Court, Bombay. 6. Appeal From Order No.285 of 2023 High Court, Bombay. 7. Commercial Suit (l) No.27512 of 2023 High Court, Bombay. 8. Writ Petition No.2614 of 2024 High Court, Bombay. 9. Writ Petition (l) No.4667 of 2024 High Court, Bombay. 10. Writ Petition (l) No.16964 of 2024 High Court, Bombay. 11. Writ Petition (l) No.26313 of 024 High Court, Bombay. 12. SLP (C) No.21367 of 024 Supreme Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Extensive submissions have been canvased by the Respondents to support their contentions that the conduct of the Petitioner in this litigation deserves to be met with heavy costs. ANALYSIS AND CONCLUSIONS 30. It needs mention that Mr. Nedumpara has put forth his lengthy submissions only as against the order dated 15th July, 2024 and 29th October, 2024. The other prayer canvased is to restrain and prohibit the two learned members of the NCLT-1, Mumbai from functioning and exercising jurisdiction. However, there is no prayer for issuance of a Writ of Quo Warranto, either in the main prayers or in the interim prayers. The further relief sought is to direct the Bank of India to allow the Petitioner to operate various Bank Accounts maintained by the Company (Prayer Clause (c) reproduced above). The last Prayer at Clause (d), is for seeking a direction to Respondent Nos. 19 and 20, to remove the particulars of the IRP and or any other indication on the website of the MCA in Master Data showing the Petitioner under CIRP process. 31. It is, thus, apparent from the record that the order dated 15th July, 2024, assailed by the Petitioner before us in this Petition, is already assailed in Wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. (2019) ibclaw.in 03 SC, M. Suresh Kumar Reddy V/s. Canara Bank Ors., (2023) ibclaw.in 67 SC and Axis Bank Ltd. V/s. Lotus Three Development Ltd. and Others, 2018 SCC OnLine NCLAT 914. 34. The view taken by the Hon ble Supreme Court is now crystallized that even the non-payment of a part of the debt, when it becomes due and payable, will amount to default on the part of a Corporate Debtor. In such a case, an order of admission under Section 7 of the IBC must follow. If the NCLT notices that there is a debt, but it has not become due and payable, the application under Section 7 can be rejected. When there is a non-payment of debt under Section 3 (12) of the Code, when whole or any part or installment of the amount of debt has become due and payable and is not paid by the debtor or the Corporate Debtor, as the case may be, it would amount to default and the proceeding under Section 7 of the IBC must follow. In view of the above, we do not find any illegality or error in the order dated 29th October, 2024. FORUM SHOPPING, SUPPRESSION, MULTIPLICITY OF CASES AND WASTAGE OF THE TIME OF THE COURT 35. Insofar as the challenge to the impugned order dated 15th July, 2024, passed by NCLT-1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less and unfounded allegations against the two learned members of the Tribunal, there are neither any circumstances set out in the Petition, nor is there any justification to entertain these prayers. This Petition deserves to be dismissed on these counts, as well. 39. Taking into account all the above factors, this Writ Petition is dismissed, with costs. REASONS FOR IMPOSING COST OF Rs. FIVE LAKHS 40. In this proceeding, we deem it appropriate to assign reasons for imposing cost upon the Petitioner. The reasons are as under : (a) Except main Prayer Clause (a) pertaining to the Judges (Protection) Act, 1985, Prayer Clause (c) pertaining to the contention that the two learned Members of the NCLT-1, Mumbai are Coram non judice and the challenge to the order dated 29th October, 2024, all other prayers are practically, copied and pasted from the Writ Petition (L) No.26313 of 2024. (b) In Writ Petition (L) No.26313 of 2024, this Court (Coram: A.S. Gadkari and Dr. Neela Gokhale, JJ.) has already delivered an order by consent of the Petitioner and disposed off the Writ Petition. A Review Petition (L) No.33425 of 2024, has been filed in which the same prayers are put forth and the same is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Brother A.S. Gadkari, J., Learned Brother Justice Pooniwalla and this Bench, coupled with challenging the same order dated 15th July, 2024 passed by NCLT-1, Mumbai, even before the Bench headed by Learned Brother A.S. Gadkari, J., before the Single Judge Bench Learned Brother Firdosh P. Pooniwalla, J. and before this Court and praying for interim stay orders in all these matters. Hence, for the above conduct, we are imposing cost of Rs. 2.5 Lakhs. WASTAGE OF TIME OF THE COURT 43. The Petitioner consumed three hours of this Court citing grave urgency, when the Daily Board of this Court is between 150 to 200 matters and when the fresh admission cases being heard for the first time and the urgent admission cases, total of about 100 to 125 cases per day. We had to push back the Daily Board and rearrange the dates for hearing urgent cases, and hear the learned Advocate Mr. Nedumpara for three hours, resulting in loss of precious time of the Court. For the reason of wasting the time of the Court, we are imposing cost of Rs. 2.5 Lakhs. 44. The total of Rs.5 Lakhs shall be deposited in this Court by the Petitioner, within 30 days from today. After this amount is deposited, this amount s ..... 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