Case Law Details
Rajendra Narottamdas Sheth & Anr Vs Chandra Prakash Jain (Supreme Court)
In the present case, Mr. Praveen Kumar Gupta has been given general authorisation by the Bank with respect to all the business and affairs of the Bank, including commencement of legal proceedings before any court or tribunal with respect to any demand and filing of all necessary applications in this regard. Such authorisation, having been granted by way of a power of attorney pursuant to a resolution passed by the Bank’s board of directors on 06.12.2008, does not impair Mr. Gupta’s authority to file an application under Section 7 of the Code. It is therefore clear that the application has been filed by an authorised person on behalf of the Financial Creditor and the objection of the Appellants on the maintainability of the application on this ground is untenable.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Respondent No. 2 filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘Code’) which was admitted by the National Company Law Tribunal, Ahmedabad bench (hereinafter referred to as the ‘NCLT’ or ‘Adjudicating Authority’) on 01.06.2020. The Appellants, who are the suspended directors of the board of R.K. Infratel Ltd. (hereinafter referred to as the ‘Corporate Debtor’), filed an appeal which was rejected by the National Company Law Appellate Tribunal, Delhi (hereinafter referred to as the ‘NCLAT’). Therefore, this Appeal.
2. The Corporate Debtor is in the business of setting up underground fiber network in the cities of Surat, Ahmedabad, Vapi, Silvasa, Ankleswar and in South Gujarat, and providing dedicated dark fiber, broadband, internet leased line, VPN, point-to-point, wi-fi and wiMAX connections and CCTV surveillance services to corporate entities, financial institutions and other organisations. Respondent No. 2, Union Bank of India (hereinafter referred to as the ‘Bank’ or ‘Financial Creditor’), sanctioned a loan of Rs. 4.5 crore which was cleared by the Corporate Debtor on 08.12.2012. Another loan was granted by the Financial Creditor for Rs. 3.5 crore which was also repaid on 28.05.2018. Thereafter, loans were granted by the Financial Creditor to the Corporate Debtor but the Corporate Debtor was unable to settle the dues of the Financial Creditor in time. On 30.09.2014, the account of the Corporate Debtor was declared as nonperforming asset (NPA). The Financial Creditor issued notice for recovery of all dues payable by the Corporate Debtor on 01.10.2014. Pursuant to the notice, the Financial Creditor filed an application before the Ahmedabad bench of the Debt Recovery Tribunal under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 for recovery of the dues, which is still pending consideration.
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