Tata Capital Limited Vs Geeta Passi (Bombay High Court)
The High Court of Judicature at Bombay considered a writ petition under Article 226/227 of the Constitution of India challenging two orders of the Sole Arbitrator: an order dated October 7, 2022, keeping arbitral proceedings in abeyance during the operation of an interim moratorium under Section 95 of the Insolvency and Bankruptcy Code, 2016 (IB Code), and a subsequent order dated March 20, 2023, rejecting an application to vacate the stay.
Material Facts & Procedural History
Channel Finance Facility & NPA:** Tata Capital Limited (Petitioner) granted a channel finance facility to Sterling Motor Company (SMC), a sole proprietorship of Mr. Tarun Kapoor (Respondent No. 2). Mr. Tarun Kapoor, Smt. Pavan Kapoor (Respondent No. 3), Shri B.L. Passi (Original Respondent No. 4), and Rameshwar Sweets and Namkeens Pvt. Ltd. (Original Respondent No. 5) stood as guarantors/executants. SMC defaulted, leading to its account being classified as a Non-Performing Asset (NPA) on September 4, 2019, followed by a loan recall notice on October 15, 2019.
Initiation of Arbitration:
The Petitioner initiated arbitration proceedings before a Sole Arbitrator.
Insolvency Applications & Interim Moratorium:
Volkswagen Finance Pvt. Ltd. filed an application against SMC/Mr. Tarun Kapoor. On January 4, 2021 (rectified on January 11, 2021), NCLT New Delhi (Court-III) appointed a Resolution Professional (RP) and noted the commencement of an interim moratorium under Section 96(1)(a) of the IB Code in relation to all debts of personal guarantor Mr. Tarun Kapoor.
