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TMI Blog2025 (3) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... he subjects the Impugned Order of 08.08.2024, as rendered by the Ld. Adjudicating Authority, NCLT, Bengaluru Bench, the resulting consequence of, which had been that, the Corporate Debtor has been admitted to face the CIRP proceedings under Section 7, of the I & B Code, 2016, as it was sought to be initiated by the Respondent herein who was the Applicant in the Company Petition i.e., IDBI Trusteeship Services Limited (hereinafter to be referred as a Financial Creditor). 2. As a consequence of the judgment of 08.08.2024, the Ld. Adjudicating Authority observed that, since there is an apparent establishment of a debt and default, existing in the petition thus preferred by the Respondent, and has also observed that the petition was held to be within the limitation period, had admitted the petition and declared a moratorium under Section 14 of the I & B Code, 2016, and the necessary consequences to the moratorium under Section 14 of the I & B Code, 2016, was to be followed. 3. Brief facts as it engages consideration, and which has been the subject matter of consideration too before the Ld. Adjudicating Authority, it was to the effect that, Coffee Day Enterprises Limited, is a holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtha, on 29.07.2019, who happened to be the Founder, Chairman, and Managing Director and Promoter of the Coffee Day Enterprises Limited, (the Corporate Debtor), this Appellant has taken various steps to ensure the revival and continuous running of Cafe Coffee Day Group. However, owing to an unprecedented force majeure that is because of COVID-19 pandemic, the business of the cafe outlets of Cafe Coffee Day, was either put to a halt or at few places they were running, but not at its fullest capacity resulting in a recurring loss. 7. The Appellant's case was further that, they had made all endeavors to ensure that the aforesaid enterprise and the holding company stayed in an operational capacity, and she kept running. As a result, on 28.07.2020, the Respondent No. 1 alleged to be acting through its power of attorney holder, under the instructions of 100% of the debenture holders had issued a notice of default for the purposes of initiating the CIRP proceedings against the Corporate Debtor. 8. The Appellant contended that, Respondent No. 1 is said to have been acting on behalf of the debenture holder and had issued a notice of sale on 01.03.2021. This notice of sale of 01.03.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny payment of principal, interest, fees or commission payable in respect of the Debentures or under the Transaction Documents; (iv) a change to any Obligor; (v) any provision which expressly requires the consent of all the Debenture Holders: (vi) the manner of sharing of any proceeds of enforcement under Clause 10.3 (Power to apply Proceeds): (vii) the release of any Security created pursuant to any Transaction Document or of any Charged Assets (except as provided in any Transaction Document); and (viii) the nature or scope of the Charged Assets except to the extent that it relates to the sale or disposal of a Charged Asset where that sale or disposal is expressly permitted under this Deed or any other Transaction Document; and (b) to authorise the Debenture Trustee to concur in and execute any supplemental deed embodying any such modification by passing a Unanimous Resolution for this purpose. 40. A meeting of the Debenture Holders shall have the following powers exercisable by an Extraordinary Resolution: (a) to remove the existing Debenture Trustee and to appoint new Debenture Trustee in respect of the Debentures; or (b) to give any other direction, sanction, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the provisions contained under clause 10 (1)(b), of the Debenture Trust Deed dated 22.03.2019. iii. It was the case of the Appellant and consistently harped upon during the course of argument, that the pleading, which was raised by them in para 3 and 4 of the written statement, had not been considered though, the contents of the same were not controverted, by the Respondent in their Rejoinder Affidavit, which was filed before the Ld. Adjudicating Authority. iv. The Appellant's case was that since, the aspect of default, has to be determined from the date i.e., 30.09.2019, and even if at all the default period could have been extended owing to the COVID-19 situation then too, the said period would end owing to the expiry of 90 days period which stood granted by virtue of the Hon'ble Apex Court Judgment i.e., with effect from 01.03.2022 as observed in MA. No. 21/2022 in MA 665/2021 in Suo motu Writ Petition (C) No. 3/2020, which would be completing on 30.05.2022, but since, the proceeding under Section 7 of the I & B Code, 2016, was filed on 07.09.2023, it will be barred by limitation. v. It was further the case of the Appellant, before the Ld. Adjudicating Authority that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot in debate, nor has it ever been argued by any of the counsels about the tenability of the Debenture Trust Deed nor its validation or execution is in dispute. Owing to the fact that, both the counsels agreed, that, there did exists a Debenture Trust Deed, as executed on 22.03.2019, which was laying down the governing principles, that would be monitoring the code of conduct of the members of the Debenture Trust Deed, and the organisation itself for managing the affairs of the company, for the purposes of initiation and conferment of right of initiation of the proceedings under Section 7 of the I & B Code, 2016. 11. The argument of the Ld. Senior Counsel for the Appellant is that, if the Debenture Trust Deed, itself is taken into consideration since there happens to be an apparent failure on the part of the Respondents/Applicant to Section 7 application, they were to comply with, the conditions given therein, to attach an authentication to the proceedings, it is argued that, it would vitiate the very inception of proceedings under Section 7 of the I & B Code, 2016. For the aforesaid purpose, the Ld. Senior Counsel for the Appellant had made reference to the Debenture Trust Deed it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r secured parties, pursuant to the trust created under this deed and IDBI Trusteeship Services Limited agrees to act as a Debenture Trustee for and on behalf of the other secured parties in accordance with the terms and conditions contained in this deed." 16. The signatories to the Debenture Trust Deed dated 22.03.2019, had agreed upon the terms and conditions as contained in the Debenture Trust Deed would be binding terms and conditions, and for the aforesaid purpose it enforce upon an obligations on the Debenture Trustee as per the terms of the Debenture Trust Deed to act accordingly. 17. The reference may be made to Clause 3.3 of Debenture Trust Deed, which provides for the terms and conditions and their binding nature, Clause 3.3 provides that, "the terms and conditions shall be binding on the company and the Debenture Holders and all persons claiming by, through, or under any of them". What would be relevant herein to be considered as the Debenture Trustee is whether they will be entitled to ensure, the compliance of the obligations of the company under or pursuant to the terms and conditions of the Deed, as if the same was set out and contained in the deed. On a simple inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xecute and deliver and/or accept the Transaction Documents and do any other act necessary for the creation and perfection of the Security required to be created pursuant to the Transaction Documents; (ii) execute and deliver all other documents, Agreements, instruments, certificates, notices and do all other actions as may be necessary or desirable in connection with the protection and preservation of the rights of the Debentures Holders; (iii) to the extent necessary, hold title deeds and other documents relating to any of the Charged Assets in such manner as it sees fit; and (iv) upon the occurrence of an Event of Default, exercise its rights as Debenture Trustee for the Debenture Holders under the Transaction Documents and under Applicable Law and Clause 7 (Events of Default and Remedies). (b) The Debenture Trustee shall, except in respect of matters on which it has been expressly authorised to take action (or omit to act) without reference to the Debenture Holders, seek the consent of the Debenture Holders prior to taking any actions (or omitting to act) under the Transaction Documents. The required majority of Debenture Holders for giving consent to any proposed action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e II of the Debenture Trust Deed. The exercise of powers by the Debenture Trustee, under Sub-clause (b) of Clause 10.1 of the Debenture Trust Deed, could have been only, upon express authorization given, to take action (or omission to act). Under the transaction document, required to be issued by majority of Debenture Holders for giving consent to an approved action, the reference herein with regards to the term "majority action" would be in accordance with the "majority resolution" contemplated under the Debenture Trust Deed, as provided under Clause (b), of the definition clause of majority resolution, which provides for that any action which is to be taken by the Debenture Trustee, has had to be, ratified and based upon the resolution of a meeting of the Debenture Holders, which should be upon the written instructions, given or by a majority representing not less than 51 percent of the aggregate nominal value of the outstanding debentures. The Ld. Senior Counsel for the Appellant submits that, since there happens to be no dispute with regard to the execution of the Debenture Trust Deed, he referred to Clause 3.3 as already referred to above that, the said clause has to be read i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... originally applicable grace period. (b) Any Financial Indebtedness of any member of the Promoter Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of any actual or potential default, event of default, or any similar event (however described). (c) Any commitment for any Financial Indebtedness of any member of the Promoter Group is cancelled or suspended by a creditor of such member of the Promoter Group as a result of any actual or potential default, event of default, or any similar event (however described). (d) Any creditor of any member of the Promoter Group becomes entitled to declare any Financial Indebtedness of such member of the Promoter Group due and payable prior to its specified maturity. 7.7 Insolvency (a) Any member of the Promoter Group is unable to, is presumed or deemed by law to be unable to or admits its inability to, pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness. (b) The liabilities of any member of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or regulation is of general application, applies to a class of persons which includes any Obligor or to an Obligor alone). 7.11 Expropriation Any Governmental Authority or other authority (whether de jure or de facto) takes a step with a view to the nationalisation, compulsory acquisition, expropriation or seizure of all or any part of the business or assets or material rights of any member of the Promoter Group. 7.12 Cessation of Business Any member of the Promoter Group ceases, or threatens to cease, to carry on all or a substantial part of the business it carries on or proposes to carry on as at the date of this Deed. 7.13 Unlawfulness It is or becomes unlawful for any Obligor to perform its obligations under any Transaction Documents. 7.14 Repudiation Any Obligor repudiates a Transaction Document to which it is a party or evidences an intention to repudiate any Transaction Document to which it is a party. 7.15 Security and guarantee (a) Any Security Document is not (once entered into) in full force and effect or any Security Document does not (once entered Into) create in favour of the Debenture Trustee or the Debenture Trustee, as the case may be, the Secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated pursuant to the Security Documents having become enforceable, the Debenture Trustee shall (if directed by the Debenture Holders by a Majority Resolution): (i) enforce any Security created or provided pursuant to the Transaction Documents in accordance with the terms thereof; (ii) operate the Accounts and utilise all funds lying in the Accounts for the discharge of the Debt; (iii) exercise its rights under the Deed of Corporate Guarantee; (iv) exercise its rights under the Deed of Personal Guarantee; and/or (v) exercise such other rights and remedies as may be available to the Debenture Trustee under the Transaction Documents and Applicable Law, (c) If the Company does not redeem the Debentures on the Scheduled Redemption Date by paying the Final Redemption Amount, the Security created or provided pursuant to the Transaction Documents shall become immediately enforceable and the Debenture Trustee shall (unless directed otherwise by the Debenture Holders by a Majority Resolution): (i) enforce any Security created or provided pursuant to the Transaction Documents in accordance with the terms thereof: (ii) operate the Accounts and utilise all funds lying in the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a notice, which will be a condition preceded for the invocation of powers by the Debenture Trustees. In a nutshell, it is the argument of the Ld. Senior Counsel for the Appellant, that for the purposes of exercise of powers to initiate proceedings under Section 7 of the I & B Code, 2016, the power and duties of the Debenture Trustee, under Clause 10.1, could be exercised only when the Debenture Holders, under the transaction documents, falls to be within an ambit of Clause 7 to deal it as the event of default and remedies based on which Section 7 could have been invoked. 24. Since the powers to initiate proceedings under Section 7 of the I & B Code, 2016, as conferred to the Debenture Trustee under the Deed, were not exercised within the powers provided under Clause 10 (1) (b), the same would be bad and the entire proceedings initiated under Section 7 of the I & B Code, 2016, would be vitiated. It is argued that on scrutiny of Clause (b) of Clause 10.1, is taken into consideration, the exception which has been carved out for the purposes of the Debenture Trustee, to exercise its powers with regard to the duties and actions contemplated under Clause 7 of the Deed. It provides for, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution in the meeting of the Debenture Holders, but for act and action as contained under Clause 39 of Schedule II of the Debenture Trustee Agreement entire proceedings would be procedurally unsustainable. It has been further argued that an exception has been carved out, that all action, which are not contained under the Debenture Trustee Agreement particularly that, as contained under Clause 39, it has to be taken as per Clause 41, which provides for that "all other resolutions of the Debenture Holders at a meeting shall be by way of majority resolution". In a nutshell, which could be summarized is that, for any action, which is to be taken by the Debenture Trustee, it has to be preceded with a prior decision-making process and a conscious applicability of mind in order to show that, it has been taken on the basis of a majority decision for the purposes of arriving at a conclusion as to, whether at all there has chanced a default or an event of default as per the circumstances specified under Clause 7 except for the Clauses 7.23 and 7.24 as contained under the definition of 'default' and 'event of default', as defined under the Debenture Trustee Agreement. Even the aspects of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived at the rejoinder stage, the Ld. Senior Counsel for the Appellant, once again had attempted to reiterate his argument to make reference to the various clauses of the Debenture Trust Deed in order to substantiate their arguments that, the covenants of the Debenture Trust Deed, which were mandatorily required to be followed, were not complied with, which would vitiate the proceedings. In relation, there to while referring to the Debenture Trustee, the Ld. Counsel for the Appellant, had made reference to, the provisions as it is contained under the clauses, and under the definition of the "scheduled redemption date", which has been ascribed in the Debenture Trust Deed, as to be 31.03.2022, which has been determined to be taken as to be the date, for the purposes of meeting out the aspects of default, as it had been defined under, the Debenture Trust Deed itself. He submitted that, if the Debenture Trust Deed, itself is taken into consideration, the transaction documents are self-contained in the Debenture Trust Deed, which has been detailed, to be inclusive of the Debenture Trust Deed, the fee letter, and each security documents and such other documents, which has been contained t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in this notice unless given a different meaning in this notice. 2. We hereby notify you that: (a) [provide details of event] has occurred on [*]; (b) the event described in paragraph (a) constitutes an Event of Default under Clause 7[*] of the Deed; (c) the Debt is due and payable forthwith in respect of each Debenture together with all other amounts payable in respect thereof in accordance with the Transaction Documents; and (d) the Security created pursuant to the Security Documents has become enforcaable and we are entitled to enforce our rights under the Security Documenta (including in relation to the Charged Assets) without any further notice to you. 3. This notice is governed by Indian law." 31. On reading of Schedule VIII, again it stipulates under its Clause 2 (a), that the event described in para (a) that is the details of the default, which would necessitate the issuance of notice, has had to be as per the events of default contemplated under Clause 7 of the deed and that too in pursuance to the security document which is shown to have become enforceable under the eyes of law. In the absence of satisfaction of any of the conditions as given therein, we a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vice Presidents or any of the AVPs are hereby authorized to sign and execute the Power of Attorney on behalf of the Company in favor of the above Constituted Attorneys." "RESOLVED FURTHER THAT the MD & CEO or the Company Secretary of the Company are hereby authorized to submit a Certified True Copy of this Resolution for the purpose of giving effect to this resolution." 33. What is being argued by the Ld. Senior Counsel for the Appellant, is that in pursuance to the Resolution which has been passed by the Board on 05.03.2019 and the powers which were thus resolved to be conferred as detailed above, did not anywhere provide or prescribed a right to the named Debenture Trustee, or to the persons whose name is mentioned therein to litigate on behalf of the Applicant, to Section 7 of the I & B Code, 2016, proceedings. It was further contended, in continuation to the argument in relation to the Board Resolution of 05.03.2019, that, on 06.03.2019, a General Power of Attorney was executed by the Respondent in favor of Mr. Manohar Maddili, for doing certain acts and deeds on behalf of the Respondent, limited to the extent as given in the Power of Attorney, the powers given by Power of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nior Counsel for the Appellant, which deserves consideration by us, is that when the Power of Attorney of 06.03.2019, was having its source of power of execution, from the Resolution of the Board dated 05.03.2019, the conferment of power on Mr. Manohar Maddili, can under no set of circumstances, be beyond the power, which has been otherwise principally conferred to Mr. Manohar Maddili, by the Board's Resolution of 05.03.2019, because the creation of authority under the Board's Resolution cannot be beyond the powers of the Resolution of the Board itself. 37. While considering the aforesaid arguments, we have considered the Resolution of 05.03.2019, upon its reading with Power of Attorney dated 06.03.2019, it is apparent that so far as the powers, which were given to be executed by Mr. Manohar Maddili, pertained to execute and perform or cause to be done, executed and performed and all following acts, deeds, matters, and things or any of them, were made "subject to specific authorization from the managing director/officials of ITSL". What can be derived from the above is, that the powers conferred by the Power of Attorney dated 06.03.2019, were not independent in itself in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Substitution of Trusteeship Agreement, Release Deed and other documents and present it or cause it to be presented for Registration with the concerned Registrar / Sub Registrar of Assurances, and attend office at the Sub- Registrar of Assurance and admit execution of deed. 5. To execute, assign, deliver and lodge / admit other documents e.g. Deed of Assignments, Security Trustee Agreement, Share Pledge Agreement, Trust Deed, Indenture of Mortgage, Escrow Agreement, documents pertaining to InvITs, REITS, ESOP etc., any other document, undertaking deed etc. on behalf of ITSL. 6. To receive/collect original executed documents and lodge/ deposit in the ITSL designated Safe Custody. 7. To perform any other act other than the acts specified above the same can be done with the specific and express Letter of Authorization signed by Managing Director & CEO of ITSL. 8. To visit and represent ITSL before various authorities including but not limited to office of ROC, Official Liquidator, CBI etc. 9. To file affidavits, Counter affidavits, petitions, written statements, Rejoinders etc. before any tribunal, court etc." 40. Upon a comparative analysis of the expanded powers conferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the aforesaid purpose, a reference is required to be made to the contents of the Power of Attorney dated 22.02.2022, which was executed by the body constituted under Clause 5, in favor of one Mr. Kaustubh Sudame, who was the Deputy Manager of the Respondent, under the terms and conditions contained in the said attorney, it was rather more elaborative, in the context of the powers conferred for the purposes of prosecuting, the proceedings before the court of law. The aforesaid powers as conferred by the subsequent power of attorney dated 22.02.2022, which had an automatic overriding effect on the attorney of 06.03.2019, had conferred the following powers to the new attorney holder, Mr. Kaustubh Sudame, and the powers thus given are extracted hereunder: -. "1. To open accounts with Banks / or to operate on all existing and future accounts whatsoever. 2. To demat accounts with Depository Participants 3. To manage and administer any property movable or immovable belonging to or in which ITSL is or be in any way be interested or concerned as an executor, administer, trustee, agent or custodian. 4. To receive 'Will' for execution on behalf of ITSL and to act as its e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atnamas, or any other papers expedient or necessary in the opinion of the said Attorney to be made signed, executed, presented or filed and to represent any matter before any statutory authority either in person or through a legal representative authorized by him. 10. To sign all documents, deeds & papers related to Debenture trustee business / Security Trustee business, Securitisation Trustee, Venture Capital Trustee, Alternative Investment Fund Trustee, Share Pledge trustee, Warehousing Trustee, Escrow Trustee, NBFC Trustee, Mutual Fund Trustee, SPV Trustee and any type of trusteeship on behalf of ITSL and appoint Investment Manager to open and operate bank account, Demat and custody account for Venture Capital Fund (VCF) / Alternative Investment Fund (AIF). 11. To sign lease agreement and to present it on behalf of ITSL. 12. And generally for the better and more effectually doing and performing the several acts, matters and things aforesaid to do and perform as mentioned above all other acts, matters and things not herein specifically mentioned which in the course of general business of ITSL may be by the said Attorney be deemed to be requisite or expedient to be done or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstituted on 07.09.2023, at that point of time Mr. Manohar Maddili, who had filed the supporting affidavit was not holding the valid authority to file an affidavit, which will itself vitiate the entire proceedings, since having been instituted by a person who was not competent to initiate the same. 43. Though principally, it may not be out of context to, consider the controversy, from the perspective, so far it relates to, the two Power of Attorneys, that is the power of attorney of 06.03.2019 and 22.02.2022. Owing to what has been observed above, it could be summarized that on the date when the proceeding was instituted, the signatory to the affidavit filed in support of the Section 7 application was not a valid attorney holder, since the same was superseded by, subsequent Power of Attorney executed in favor of another person, namely Mr. Kaustubh Sudame, hence, for the purposes of filing an application under Section 7 of the I & B Code, 2016, the verification of the pleadings, particularly in a suit by or against the corporations, by or against the companies, the verification of the contents of the application becomes very vital necessary to be strictly adhered to, so as to attac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in judicial proceedings, the relevant para 8 and 9 are extracted hereunder: - "8. On the other hand Mr. Kanta Prasad Sharma learned counsel for the defendants placed reliance on Shambhu Dutt Shastri v. State of Rajasthan (2) where this court (Hon'ble Dinker Lal Mehta, J. as he then was) in para No. 23 of the judgment propounded as under: - "A general power of attorney holder can appear, plead and act on behalf of the party, but the cannot become a witness on behalf of the party. He can only appear in his own capacity. No one can delegate the power to appear in witness-box on behalf of himself. To appear in a witness box is altogether a different act. A general power of attorney holder cannot be allowed to appear as a witness on behalf of the plaintiff in the capacity of the plaintiff." 9. I have given my anxious consideration to the rival contentions and carefully perused the impugned order as well as the authorities cited before me. I am of the considered view that word "acts" used in Rule 2 of Order 3 Code of Civil Procedure does not include the act of power of attorney holder to appear as a witness on behalf of a party. Power-of-attorney holder of a party can appear on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecific denial with regards to the fact of holding of a competent authorization to initiate the proceeding under Section 7 of the I & B Code, 2016. It is argued by the Ld. Counsel for the Appellant, that the aforesaid plea about the competence of the deponent to the Affidavit, was specifically raised by the Appellant, before the Ld. Adjudicating Authority in its Para 3b, and that too in the context of the Power of Attorney of 06.03.2019, being ultra-virus to the Resolution of the Board dated 05.03.2019, the relevant paragraph of Rejoinder of Appellant is extracted hereunder: - "b) Further, the Board Resolution of IDBITSL has resolved that approval of the Board is given to issue Power of Attorney in favour of the Constituted Attorneys for execution/ discharge of various documents/ duties including security documents on behalf of the Company. The Board Resolution nowhere states that the Constituted Attorney is authorised to file an application seeking CIRP against the Corporate Debtor. Nor there is any general power granted to initiate any proceedings before any court. The applicant Mr. Manohar, submits that he has been empowered under the Power of Attorney dated06.03.2019 issued p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the judgment reported in 2023 Volume 2 SCC Page 205 in the matter of SVG Fashion Private Limited Vs Ritu Murli Manohar Goyal & Another, particularly he has referred to para 5, 6 and 7 of the said judgment which is extracted hereunder:- "5. However, NCLT, by an order dated 26-9-2019 [SVG Fashions Ltd. v. Arpita Filaments (P) Ltd., 2019 SCC OnLine NCLT 23532] overruled the objections and held that there was an acknowledgment of liability on the part of the corporate debtor and that therefore, the application was within the period of limitation. Consequently, NCLT ordered the admission of the application under Section 9 of the Code and also declared moratorium in terms of Section 14. 6. On an appeal filed by the appellant, Nclat held [Ritu Murli Manohar Goyal v. SVG Fashions Ltd., 2020 SCC OnLine NCLAT 1081] that the debt arose during the period from 11-8-2013 to 2-9-2013 and that the six cheques purportedly issued towards part-payment of the liability having been issued on 5-12-2017, will not save limitation. The Nclat further held that even if the date of default is taken to be 7-10-2013 as pleaded by the operational creditor, the acknowledgment of liability in terms of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Impugned Order and the proceedings thereof, particularly in the context of, the interpretation which has been given by the Ld. Senior Counsel for the Appellant that, for taking any action in relation to any act, actions or deeds covered under Clause 7 of the Debenture Trust Deed, it requires a prior concerted decision to be taken as per, the stipulations contained, dealing with the aspect of default. In order to answer to the argument extended by the Ld. Senior Counsel for the Appellant from the perspective, that as per the Debenture Trust Deed which binds the inter-se activities of the Respondents, it became mandatory that any action contemplated and arising out of any of the activities contained under Clause 7, it required a prior decision to be taken by the majority resolution which would attach ratification to the decision, as per its embargoes created, that is by a resolution passed in the meeting of debenture holders with written instructions and by virtue of a mandatory condition of majority representing not less than 51 percent of the aggregate nominal value of outstanding debentures. 51. The majority decision as provided under the Debenture Trust Deed, was a condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On the contrary, the Ld. Senior Counsel for the Respondent for the purposes of disowning the argument extended by the Ld. Senior Counsel for the Appellant and so as to divert the issue of default, has referred to the definition of "coupons", as given under the Debenture Trust Deed, what he intends to contend that, the amount due for the purposes of default has to be construed, from and on the basis of the Coupon Payments and the stipulations which have been given under the head of Coupon has contained under the definition clause of the Debenture Trust Deed. He has referred to the term "Coupon", by reading, the same as given, which is extracted hereunder: - "Coupon" means, in respect of a Debenture for a Coupon Period, the amount of cash interest payable on the outstanding Nominal Value at the Coupon Rate." 54. In fact, what he intended is to divert the argument is that instead of dealing with the argument in the context of debt and default which would be the governing factor, and event of default has already been dealt with herein above as argued by the Ld. Senior Counsel for the Appellant, for the purposes of giving a color of default as to be a Coupon, that means, it was lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty decision by the Debenture Holders as mentioned under the Debenture Trust Deed itself. 56. The term "default", as it has been sought to be alternatively argued by the Ld. Senior Counsel for the Respondent, by drawing our attention to the term Coupon as explained in the Debenture Trust Deed, we feel that the said argument cannot be accepted to be applied as per Clause 4.2, that is the nature of functionary for the purposes of determining, the coupon which has been read by the Ld. Senior Counsel for the Respondent as to be a default, because of the fact that the definition of "default" as given in the Debenture Trustee Agreement, as extracted above runs in consonance to, the statutory definition of 'debt' and 'default' as it has been given under the statute under Section 3(11) & 3(12). The relevant Section 3(11) & 3(12) are extracted hereunder: -. "(11) "debt" means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt; (12) "default" means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not 1[paid] by the debtor or the corporate debtor, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 for the purposes of regulating the default, by taking an action on the basis of the majority decision which was to be taken as per the procedure prescribed under the Debenture Trust Deed, for the purposes of taking any action prescribed under Clause 7 of the Deed, and the arguments which has been extended by the Ld. Senior Counsel for the Respondent by alternative reading, the expression "Coupon" as to be a substitute to "default" in order to attract Clause 4.2 is not acceptable by this Tribunal, and the said argument is turned down. 61. The question that, ultimately emerges to be considered and analyzed by this Appellate Tribunal is with regards to the liability or performance of duty by the Debenture Trustee under the Debenture Trust Deed, which overridden on the basis of a, power of attorney, which though was executed, but did not have its enforceability on the date when the proceeding itself was drawn owing to the fact that the signatory to the proceedings at that point of time was not competent to execute a document particularly when his authority itself stood withdrawn by the subsequent power of attorney executed in favor of, Mr. Kaustubh Sudame. In that eventuality, when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted by the Adjudicating Authority before the commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2020, such application shall be modified to comply with the requirements of the first or second proviso within thirty days of the commencement of the said Act, failing which the application shall be deemed to be withdrawn before its admission.] Explanation. -- For the purposes of this sub-section, a default includes a default in respect of a financial debt owed not only to the applicant financial creditor but to any other financial creditor of the corporate debtor." 62. Section 7(1) as extracted above, which is the source making power for, the issuance of the notification, which has been considered, by the Government of India while issuing a notification being Notification No. SO 1091 (e) dated 27.02.2019, which has permitted the Debenture Trustee to file an applications under Section 7 (1) of I & B Code, 2016, that means, even the notification of 27.02.2019, goes in league with, the terms of the Debenture Trust Deed, where the Respondents have admittedly agreed upon vesting of the authority on the Debenture Trustee for the purpose of initiation of the proceedings un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Misc. A No. 665/2021 in Suo motu Writ Petition No. 3 of 2020, if both the orders of Hon'ble Apex Court are taken together the question that would emerge would be, that when the period of limitation in the instant case, it was expiring after the extended period of 90 days, which was to be construed to be made effective with effect from 01.03.2022, whether at all the Respondent/Applicant would be entitled to, for a grant of exoneration of limitation due to the COVID-19 situation for the entire period from 15.03.2020 till 28.02.2022, that too when default was admittedly reckoned prior to imposition of Covid-19 restrictions i.e., 30.09.2019 and the restrictions having being imposed with effect from 15.03.2020. 65. The judgment rendered by the Hon'ble Apex Court has not to be tested on an equitable pedestal, because, the applicability of the same has to be determined based upon the facts and circumstances of each case. The exclusion of the entire period, in its entirety from 15.03.2020 to 28.02.2022 may not be universally granted in all cases, if the period of default is before imposition of restriction by the Hon'ble Apex Court, and the limitation expires between the extended period i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the right, or benefit which might have judicially accrued to, a person who is the beneficiary of adjudication, and maturing of right due to an inaction on the part of the person who seeks to, invoke a remedy for a redressal of his any legal rights created under an Act or law, which has been adversely effected by an adjudication made by the courts, which remains unchallenged, is matured for the winning party due to non-initiation of proceedings before a superior forum, within limitation. 68. A rational interpretation has to be given, and the said extension should not be preposterously extended without rationality to deprive the very object of limitation. The limitation should not be extended at the cost of deprivation of a right which had accrued to the beneficiary. As far as the instant case is concerned, the Respondent intends to take the benefit of limitation, under the garb, of the directives issued by the Hon'ble Apex Court in Suo motu Writ Petition No. 3 of 2020 (Supra). We cannot be oblivious to the fact and it is in common knowledge that during the COVID-19 period and even after passing of the order of the Hon'ble Apex Court extending the period of limitation, the courts i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... default occurred was on 30.09.2019 i.e., prior to imposition of COVID-19 restriction. However, filing of Section 7 application was on 08.09.2023 i.e., after 464 days of lifting of restrictions even after exhaustion of 90 days of extended period as provided under Suo motu W.P. No. 3/2020 (Supra). 71. In elaboration to his argument, the Ld. Senior Counsel for the Appellant for the purposes of, governing the aspects of extending the period to initiate the proceedings under Section 7 of the I & B Code, 2016, has referred to a Judgment reported in 2021 Volume 6 SCC page 366, Asset Reconstruction Company (India) Limited versus Bishal Jaiswal and Another, particularly the Ld. Senior Counsel for the Appellant has drawn the attention of this Appellate Tribunal to Para 10 of the said judgment. Para 10 of the said judgment is extracted hereunder: - "10. From the above, it is clear that the principle of Section 9 of the Limitation Act is to be strictly adhered to, namely, that when time begins to run, it cannot be halted, except by a process known to law. One question that arises before this Court is whether Section 18 of the Limitation Act, which extends the period of limitation depending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch had never been the disputed case of the Respondent, at any stage of the proceedings, because they had persistently argued, that the default stood acknowledged as back as on 30.09.2019. Acknowledgment is not a controversial aspect, which had ever been in debate, because the entire argument has been extended, on that basis as to how the Hon'ble Apex Court Judgment could be brought within the ambit to determine limitation in the present case. Once the date of default is not in dispute, the implication of Section 18 of the Limitation Act will have no relevance for the purposes of determining the debt and the date of default and its conjoint reading with Section 238A of I & B Code, 2016. 75. The Ld. Senior Counsel for the Respondent had further referred to yet another judgment in order to answer the question of limitation, as reported in 2021 Volume 10 SCC Page 330, Dena Bank (now Bank of Baroda) versus C. Shivakumar Reddy & Another, where he has referred to Para 111 and 116 of the said judgment. Para 111 and 116 are extracted hereunder: - "111. As per Section 18 of the Limitation Act, an acknowledgment of present subsisting liability, made in writing in respect of any right claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment contained under Section 18 of the Limitation Act, in the case of Dena Bank (now Bank of Baroda) (Supra), there was a specific controversy which was agitated pertaining to when the actual default/acknowledgement or when it was promised to be paid expressly or even by implications. The acknowledgment of default, or an assurance to pay by a written conduct or by way of an implication, in said case has been derived as to be an acknowledgment for the purposes of Section 18 of the Limitation Act. Apart from it, the said judgment was based upon, the consideration made in the matters of Sesh Nath Singh & Anr Vs. Baidyabati Sheoraphuli Cooperative Bank Limited, in which there was a very minor issue which was considered as to, whether the IBC excludes the application of Section 14 or 18 or any other provisions of the Limitation Act, which in fact, has been answered that Section 14 and 18 of the Limitation Act, will have its applicability to the procedure contemplated under Section 7 and Section 9 of the IBC Code. 77. Similar question, which was considered in the matter of Laxmi Pat Surana Vs Union Bank of India & Another, as reported in 2021 8 SCC 481. Since in the instant case the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of the power of attorney, besides being barred by limitation as no valid right was conferred, upon the person who had instituted the proceedings before the Ld. Adjudicating Authority. When the question of an authority to institute the proceedings, itself is doubted and is under cloud, as already dealt with herein above, the aspect of limitation herein is based upon a different pedestal altogether, as to how it would be computed owing to the peculiar circumstances because of COVID-19 situation, which we have already dealt with above, and since the aspect of acknowledgment of debt is not such a wider issue, even as answered by the Appellant, the reference to the judgment of Dena Bank (now Bank of Baroda) (Supra), would be determination in futility to its application, under the actual controversy involved in the instant appeal. 80. It is almost under an akin circumstance that the Ld. Senior Counsels for the parties refers to, the judgment of Laxmi Pat Surana Vs Union Bank of India & Another, as reported in 2021 Volume 8 SCC Page 481 and relies upon Para 43 of the said judgment, Para 43 which is extracted hereunder: - "43. Ordinarily, upon declaration of the loan account/debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aspect of default would be considered, on the basis of the expression of default given under Section 3 (12) of the I & B Code, 2016, on account of the aspect of non-payment of a debt due to be paid, in those cases where the account of the Corporate Debtor has been determined as NPA. It could be determined as basis that when the principal borrower or the Corporate Guarantor, when he admits the acknowledgment of their liability itself or after the declaration of the account as NPA. But does not institute the proceedings before the expiry of 3 years period as it has to be contemplated under Article 137 of the Limitation Act or if he does not institute the proceedings owing to the successive acknowledgments, whether the successive acknowledgments itself could exclusively be determined as to be a period from where the limitation could be construed treating it to be an acknowledgment of debt and default for the purposes of Section 18 of the Limitation Act. In fact, Para 43 of the judgment of Laxmi Pat Surana (Supra), while determining the question of Section 18 of the Limitation Act, it only refers to that, the Limitation Act gets attracted the moment acknowledgment of default is made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 2(47) of the Act defines 'transfer' in relation to a capital asset under clause (i) the sale, exchange or relinquishment of the asset or (ii) the extinguishment of any right thereof or - [clauses (iii) to (vi) are not relevant hence omitted]. Unfortunately the assessee did not bring on record the necessary material facts to establish that he became owner by any non-testamentary instrument acquiring right, title and interest in the plant and machinery nor the point was argued before the High Court and we do not have the benefit in this regard either of the Tribunal or of the High Court. In this view we decline to go into the question but confine to the first question and agree with the High Court answering the reference in favour of the revenue and against the assessee that the appellant is not entitled to the development rebate under Section 33(1) of the Act. The appeal is accordingly dismissed with costs quantified at Rs 5000." 85. While reverting back and partially reiterating what we have already considered, an aspect of acknowledgment of debt in the instant company appeal was a continuous process, ever since, 30.09.2019 which remained uncontroverted till date. But an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y benefit of limitations determined on the basis of admitted date of default, even based upon the Suo motu judgment (Supra) particularly, that has contained under Para 5.3 of the said judgment. The en block exclusion, of the period from 15.03.2020 to 28.02.2022, would not be available to the Appellant, when the Section 7 application was filed after 464 days even after the extended period of 90 days. (a) His limitation would start commencing from 30.09.2019, date of admitted default prior to COVID-19 restrictions and it would end after the expiry of the extended period of granted days in pursuance to the Supreme Court judgment. But still filing is after 464 days only on 08.09.2023, would be barred from the date of default. 87. Hence at the most, the appeal ought to have been filed, prior to 29.09.2022, and since there happens to be no valid explanation, by the Respondent for the inability to file, the application between 29.09.2022 and 07.09.2023. The limitation, could not be extended as argued by the Ld.Senior Counsel for the Respondent; which would be reckoned from the date of admitted default i.e., 30.09.2019, which was prior the restrictions of COVID-19 situation i.e., prior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2023. (vii) The period of limitation in addition to, 166 days, which has expired as on to 15.03.2020, cannot be permitted to continue and stretched even after 28.02.2022, to extend it in a fashion that the limitation, may be extended for a further period of 929 days, by determining it from 28.02.2022, because it will be an irrational extension of the time period, particularly when the Respondent was conscious of its intention to initiate the proceedings after having issued the notice on 28.07.2020 during the exempted COVID-19 period. At the most, the Appellant could have taken advantage of limitation having instituted the proceedings in between 01.03.2022 to 30.05.2022 or at the most, till the actual period of expiry of limitation i.e. 30.09.2022, but not atleast till 07.09.2023 when the application filed after 464 days, after extended 90 days period. (viii) Under no set of circumstances, the remaining period of 929 days which will be part and parcel of the remaining 3 years period, be extended to benefit the aspect of limitation for the Appellant after determining the same from 30.05.2022. In either of the manner, it runs contrary to the very intention of the aspect of limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebtor for the said default occurring during the said period. Explanation.-For the removal of doubts, it is hereby clarified that the provisions of this section shall not apply to any default committed under the said sections before 25th March, 2020.]" 90. On a simpliciter reading, of the provisions contained under Section 10A it provides for, that the bar which was created for initiation for proceeding, was in relation to the default which was committed on or after 25.03.2020, it not apply to admitted defaults prior subsequent to the insertion of Section 10A. Since there being a specific incorporation of a cut-off date of 25.03.2020 and here in the instant case admittedly the default has been committed on 30.09.2019, Section 10A will have no applicability for the purposes of extension of the period of limitation for initiation of CIRP proceedings owing to COVID-19 situation and more particularly, when the Respondent/Applicant, himself has issued notices for initiation of proceedings on 28.07.2020 after the insertion made by the Act No. 17/2020 with effect from 05.06.2020, that is one month after the insertion. The explanation of Section 10A, has abundantly made quite clear, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et another judgment rendered by the principal bench of NCLAT in Company Appeal (AT) (INS) No. 294/2023 in the matters of Narayan Mangal versus Vatsalya Builders & Developers Pvt. Ltd. The principal bench in the said judgment in its para 11 and 12 have considered the aforesaid aspect and based upon that the earlier ratio as rendered in the matters of Company Appeal (AT) (INS) No. 914/2023, Raghavendra Joshi versus Axis Bank Limited & Another, had clearly provided that Section 10A will not be made applicable, in those cases where default have chanced prior to, the insertion of Section 10A in the I & B Code, 2016. The relevant para 11, which also extracts the ratio laid down in the matters of Raghavendra Joshi (Supra). The relevant para 11 & 12 are extracted hereunder: - "11. In the Judgment of this Tribunal delivered in "Raghavendra Joshi Vs. Axis Bank Limited" we have already held that if default was committed prior to Section 10 A period, Section 10 A shall not be applicable. Following has been held by us in paragraph 15 & 16 : "15. The submission that since default was also committed by the Corporate Debtor during the Section 10A period of the OTS amount which ultimately with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding the threshold. Liability to pay interest which default committed prior to Section 10 A period continues and is not obliviated by Section 10 A." 93. In Para 12 of the judgment of Narayan Mangal versus Vatsalya Builders & Developers Pvt. Ltd. (Supra) provides that, if a default is committed prior to Section 10A and the default continues, there is no prohibition of initiation of proceedings under Section 7 of the I & B Code, 2016. 94. Yet another judgment rendered by the principal bench in Company Appeal (AT) (Ins) No. 1459/2022 in the matter of Beetel Teletech Limited versus Arcelia IT Services Private Limited, in its para 11 has almost laid down the identical principles that Section 10A will not create any embargo for initiation of the proceedings, in relation to those cases where the default has chanced, prior to the cut-off provided under Section 10A i.e., 25.03.2020. In the instant case, since it is an admitted case and not in dispute too that the default has chanced on 30.09.2019, this would be taken as to be a default prior in time and it would be covered by the judgment by the ratio laid down by the aforesaid judgments. Relevant Para 11 of Beetel Teletech Limited (Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered expedient to suspend under Sections 7, 9 and 10 of the Insolvency and Bankruptcy Code, 2016 to prevent corporate persons which are experiencing distress on account of unprecedented situation, being pushed into insolvency proceedings under the said Code for some time; AND WHEREAS it is considered expedient to exclude the defaults arising on account of unprecedented situation for the purposes of insolvency proceeding under this Code." 95. This judgment too, while drawing the aforesaid analogy about the implications of, the exemption of period under Section 10A has laid down that it will not attract exclusion in relation to those admitted defaults, which has chanced prior to, the cut-off date as contemplated under Section 10A, this judgment is yet again been based upon the principles of Raghavendra Joshi versus Axis Bank Limited & Another, and Narayan Mangal versus Vatsalya Builders & Developers Pvt. Ltd, which has been considered in Para 10 of the said judgment are extracted hereunder:- "10. The Section 10 A provides that no application/proceedings under Section 7,9 & 10 is to be initiated for a default which is committed during Section 10A period. What is bar is initiation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Court and relevant observations have been made in Paragraphs 22,23 and 24 as has been noted above. The Hon'ble Supreme Court affirmed the Order of the Adjudicating Authority holding that default in Section 9 Application being on 30th April, 2020 it being covered by Section 10A, Application was rightly rejected. The above judgment of the Hon'ble Supreme Court has laid down that if the default is after 25th March, 2020, the Application is hit by Section 10A. The object as was indicated in the ordinance for bringing Section 10A in the statute book is relevant to notice which is to the following effect: "AND WHEREAS a nationwide lockdown is in force since 25th March, 2020 to combat the spread of COVID-19 which has added to disruption of normal business operations: AND WHEREAS it is considered expedient to suspend under Sections 7, 9 and 10 of the Insolvency and Bankruptcy Code, 2016 to prevent corporate persons which are experiencing distress on account of unprecedented situation, being pushed into insolvency proceedings under the said Code for some time; AND WHEREAS it is considered expedient to exclude the defaults arising on account of unprecedented situation for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices raised within the Section 10 A period, that is between 25.03.2020 to 16.09.2020, are to be included in the total debt, due and in default, for the purpose of initiating CIRP proceedings under Section 9 of the Code. This has been dealt with by the Ld. Adjudicating Authority in para 27-31 of the impugned order, wherein the Ld. Adjudicating Authority has held that even though the application states the date of default to be 15.12.2020, as per records of NeSL the date of default is 14.03.2020, the same has to be taken as the date of default and hence the default in the instant case is a default committed prior to the Section 10 A period which is continuing during Section 10A period and therefore it will not attract the provisions of Section 10 A of the Code." 98. Section 10A will have no applicability for the purposes of extension of the period of limitation in the instant case, as it has been argued by the Ld. Counsel for the Respondent/Applicant to the proceedings. Because of the fact, that the Respondent/Appellant themselves have chosen to issue notice on 28.07.2020, i.e., one month after the exemption contemplated under Section 10A, as made effective by the amending act w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or malicious. Section 65 reads as under: - "65. Fraudulent or malicious initiation of proceedings. - (1) If, any person initiates the insolvency resolution process or liquidation proceedings fraudulently or with malicious intent for any purpose other than for the resolution of insolvency, or liquidation, as the case may be, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees, but may extend to one crore rupees. (2) If, any person initiates voluntary liquidation proceedings with the intent to defraud any person, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees but may extend to one crore rupees. [(3) If any person initiates the pre-packaged insolvency resolution process- (a) fraudulently or with malicious intent for any purpose other than for the resolution of insolvency; or (b) with the intent to defraud any person, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees, but may extend to one crore rupees.]" 100. It provides that, if any of the parties to the proceedings, have ultimately on conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC Page 205 in the matter of SVG Fashion Private Limited Vs Ritu Murli Manohar Goyal & Another and particularly the reference has been made to Para 7 and 11 of the said judgment. In a nutshell, if the observations which had been made therein by the Hon'ble Apex Court is taken into consideration, it has primarily held that judgment rendered without considering the plea would amount to be a perverse and with a non-applicability of mind. The relevant Para 11 is extracted herein above. 11. The law as it has developed on the applicability of Section 18 of the Limitation Act and the circumstances in which it would apply, have also not been examined by Nclat. Therefore, the order [Ritu Murli Manohar Goyal v. SVG Fashions Ltd., 2020 SCC OnLine NCLAT 1081] of Nclat is liable to be set aside and the matter liable to be remanded back for a fresh consideration. Accordingly, the appeal is allowed, the impugned order [Ritu Murli Manohar Goyal v. SVG Fashions Ltd., 2020 SCC OnLine NCLAT 1081] of Nclat is set aside and the matter remanded back to Nclat for a fresh consideration in the light of the observations and the principles of law indicated above. There will be no order as to costs." 103. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt itself. When the Trial Court after considering the evidence, has come to a conclusion, the Appellate Court should not ordinarily remand the case, it should see first whether it can dispose of the case itself under order 41 Rules 24 to 27 CPC. Only if it is not possible to do so and it is necessary in the interests of justice to remit the suit, remand should be resorted to. When additional evidence is tendered in appeal, the Court should act under rule 28 and not remand the whole case under this rule. Such an order can be passed only in exceptional cases as, for example, where there had been no real Trial of the dispute and no complete or effectual adjudication of the proceeding and the party complaining has suffered material prejudice on that account. Remand is not meant to provide fresh oportunity to a party to litigate. An order of remand could be made only if the finding of the lower Court is reversed in appeal. Where there is no reversal of the finding, the Appellate Court cannot proceed under this rule and remand the case for a fresh inquiry on the ground that a finding is necessary on a point not dealt with in the judgment or that the inquiry has been inadequate. Aremand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udame, by an attorney executed in his favour on 22.02.2022, thus on the date of filing of the proceedings, Mr. Manohar Maddili as he was not holding a valid authority. The proceedings would be vitiated since, having not been instituted under the valid authority. (iv) Since, the entire proceeding was maliciously oriented, as having been instituted on the basis of the notice issued on 28.07.2020, which was falling during the COVID-19 period. (v) Operation of Section 10A will not in any way impact the limitation period in this case since the limitation would start running from the date of the default being 30.09.2019, which was prior to the COVID-19 period and the limitation thereto of three years will be expiring on 30.09.2022 even after taking into account the implication of Suo motu judgment of Hon'ble Apex Court due to COVID-19 situation. (vi) it would be a malicious proceeding and would be barred by Section 65 of the I & B Code, 2016. The plea of Section 65 of the I & B Code, 2016, since having been taken by the Appellant after the leave of the Tribunal and has not been considered, it would vitiate the proceedings. 105. More importantly, we are of the opinion that, the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions as contained under the Debenture Trust Deed is a binding inter se between the Debenture Holders and all persons claiming by or through under or any of them as contained under Clause 3.3, which has been extracted and dealt with above. 107. We fed it to consider also as to what would be the remedies available, on an identification or admission of a commission of a default and for an action to be taken as per Clause 7 by the Debenture Trust Deed. Particularly having referred to Clause 7.23, which provides for the mechanism for the remedies upon an event of reckoning of default and particularly, having reference to Clause 7.23 (a), which prescribes for "upon occurrence of event of default" which is an admission of default nor, the Debenture Trustee 'may' and 'shall' if so directed by the Debenture Holders by a majority resolution declared to the obligor by notice in writing substantially in the form set out in Schedule 8 (form of notice of event of default) Clause 7.23(a) particularly, it contains an exception that the powers, which are to be exercised by the Debenture Trustees, to take the remedial measures upon an identification of a default, which in the instant case happens t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of any member of the Promoter Group (other than the promoter), or any analogous procedure or step is taken in any jurisdiction in respect of any member of the Promoter Group." 110. Since all the actions which has been taken, in the instant case, will be falling well within the ambit of exercise of powers under Clause 7.8, the effect of the notification which falls to be under Clause 7.23 (c)(v) ought not to have been attracted for the purposes of initiation of the insolvency proceedings at the behest of the Debenture Holders based on Debenture Trust Deed. Since according to Clause 13.5, it reads as "the Debenture Trustee undertakes for the benefit of the Debenture Holders, that it shall, upon receipt of instructions from the applicable majority of Debenture Holders, initiate and represent the Debenture Holders in any legal or other proceedings necessary to enforce the right of Debenture Holders and the Debenture Trustees in connection with the Debentures/or, under the transaction documents". The inference which could be drawn from Clause 13.5, as it has been argued by the Ld. Senior Counsel for the Appellant, would be that owing to Clause 13.5, it falls to be the othe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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