Vijay Kumar Singhania Vs Bank of Baroda and Anr (Supreme Court of India)
Summary: The Supreme Court dismissed the appeal filed by Vijay Kumar Singhania against Bank of Baroda and another, declining to interfere with the National Company Law Appellate Tribunal’s order dated 13 December 2023 in Company Appeal (AT) (Insolvency) No. 1058 of 2023. The Supreme Court condoned the delay, found no reason to interfere, dismissed the appeal and disposed of pending applications. The Supreme Court’s short order contains no independent discussion of the merits.
The underlying dispute arose from insolvency proceedings initiated by Bank of Baroda against Cygnus Splendid Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Bank claimed a default of ₹13,49,47,775.57, with 13 March 2017 identified as the date of default. The NCLT admitted the application on 26 July 2023. The suspended director challenged the admission, disputing the evidence of default, limitation, the effect of pending counterclaims and the authority of the person who filed the application.
The NCLAT held that an authenticated Information Utility record was not the exclusive permissible evidence of default. It examined Section 7(3)(a), Regulation 2A of the CIRP Regulations and Rule 4 of the Adjudicating Authority Rules, concluding that certified bankers’ book entries and other prescribed records could establish default notwithstanding the amendment to Regulation 20 of the Information Utilities Regulations. The Tribunal also rejected the contention that pending counterclaims and commercial litigation necessarily prevented admission of a financial creditor’s Section 7 application.
On limitation, the NCLAT considered the Corporate Debtor’s successive One Time Settlement proposals, including the communication dated 3 November 2020. It held that the written acknowledgements of liability extended limitation under Section 18 of the Limitation Act, 1963. The use of the expression without prejudice did not, in the circumstances examined, negate the acknowledgements. The NCLAT also found that Pawan Sharma had been validly authorised to file the insolvency application through the relevant power-of-attorney arrangements.
The NCLAT consequently dismissed the suspended director’s appeal and upheld the insolvency admission. The Supreme Court subsequently declined to interfere with that appellate order, without separately setting out or adopting detailed reasoning on each issue.
Related Reading: Information Utility Default Record Not Mandatory for Section 7 IBC Admission: NCLAT Delhi
Cases Discussed in the Underlying NCLAT Judgment
- Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17 – Sources of evidence of financial debt.
- Innoventive Industries Limited v. ICICI Bank and Anr., (2018) 1 SCC 407 – Scheme of Sections 7, 8 and 9 of the IBC.
- Dena Bank (Now Bank of Baroda) v. C. Shivakumar Reddy – Acknowledgement of liability and limitation.
- Peacock Plywood (P) Ltd. v. Oriental Insurance Co. – Without-prejudice communications.
- ITC Ltd. v. Blue Coast Hotels Ltd., (2018) 15 SCC 99 – Acknowledgement of debt in communications marked without prejudice.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Delay condoned.
2. We find no reason to interfere with the order of the National Company Law Appellate Tribunal dated 13 December 2023 in Company Appeal (AT) (Insolvency) No 1058 of 2023.
3. The appeal is accordingly dismissed.
4. Pending application, if any, stands disposed of.
1. Delay condoned.
2. The appeal is dismissed in terms of the signed order.
3. Pending application, if any, stands disposed of.
