Amidst a long-standing and multifarious litigation between Indiabulls Housing Finance Limited (“Indiabulls”) and the Shipra Group of Companies, NCLT, Delhi has admitted Shipra Leasing Private Limited to CIRP for its default to the tune of Rs.165 Crores.
The significance of this decision is that:
- The NCLT rejected the Respondents’ objection to the petition on the ground that the ‘first’ date of default (a) was not a default since it is under challenge before the Allahabad High Court and (b) fell under Section 10A of the Code.
- The NCLT held that the ‘date of default’ for this company petition is the subsequent date on which the cheques of the Corporate Debtor were dishonored giving a fresh cause of action for filing an application under Section 7 of the Code. The NCLT applied the principle that every subsequent default gives fresh and new cause of default for filing an application under Section 7 of the Code and accordingly, the NCLT held that the bar under Section 10A of the Code will not be applicable in the present case.
- In terms of the prevailing legal position, the NCLT confined its determination of this petition to the existence of a payable debt and the default in payment thereof. The NCLT held that once there is no denial of (a) the sanction of the loan, (b) the disbursement of the loan and (c) the non-repayment of the loan, the ingredients of Section 7 of the Code are satisfied, and accordingly, allowed the company petition.
Our Disputes Team Comprised Partner – Dheeraj Nair and Manish Jha, Senior Associate – Vishrutyi Sahni and Associate – Ankit Tripathi.
Practicing as a lawyer since 2000 in Indian courts and tribunals. Appeared in twenty High Courts of India and conducted several arbitrations.