NCLT Mumbai Dismisses ₹2,235 Crore Insolvency Plea Against Sumer Radius Realty Amid CBI, ED Probe
The National Company Law Tribunal at Mumbai has dismissed Omkara Assets Reconstruction Private Limited's ₹2,235 crore insolvency petition against Sumer Radius Realty Pvt. Ltd.
A coram of Judicial Member Vinay Goel and Technical Member Charanjeet Singh Gulati said that the financial creditor's inconsistent stands regarding the same transaction attracted the principle of approbate and reprobate, while the underlying transaction was also under investigation by the CBI and Enforcement Directorate.
"In view of the facts and circumstances of the case, not only the present Petition attract the principle of approbate and reprobate, but also the very underlying transaction, being the subject matter of investigation by the CBI and ED and consequent proceedings thereto, restricts its ambit to be considered as a financial debt within the meaning of Section 5(8) of the Code and the occurrence of consequent default. Accordingly, C.P. (IB) No. 155 of 2022 is dismissed as not maintainable.", the Tribunal said.
The case arose from a July 30, 2018 loan agreement under which Dewan Housing Finance Ltd (DHFL) sanctioned ₹900 crore and disbursed ₹439.25 crore to Sumer Radius Realty along with a corporate guarantee for a ₹1,100 crore loan to Radius Estate Projects.
Piramal initially pursued the insolvency petition but Omkara Assets Reconstruction was later substituted as the Financial Creditor and continued the proceedings. Sumer Radius opposed the petition, noting that the same transactions had already been challenged as fraudulent under Section 66 of the Insolvency & Bankruptcy Code.
The Tribunal rejected the financial creditor's contention that the insolvency and fraud proceedings could be pursued simultaneously.
It said that the creditor had taken mutually inconsistent positions on the same transaction, assailing it as fraudulent in one proceeding while seeking to enforce it as a valid financial debt in the other thereby attracting the principle of approbate and reprobate.
The Tribunal noted that the ₹2,317 crore loan transaction was the subject matter of CBI and ED investigations besides pending CBI and PMLA Special Cases.
Relying on the judgment in Progfin Pvt. Ltd. v. Ganesh Benzoplast Ltd., the Tribunal held that the pending CBI, ED and PMLA proceedings raised serious questions over the transaction's validity, which it could not conclusively determine in its summary Section 7 IBC jurisdiction.
"These circumstances raise serious issues concerning the nature and validity of the transactions forming the basis of the alleged financial debt and, therefore, this Authority, in exercise of its summary jurisdiction under Section 7 of the Code, cannot conclusively determine the existence of the debt and default so as to admit the present Petition."
The petition was therefore dismissed as not maintainable.
For Petitioner: Advocates Ryan D'souza, Zaid Mansuri i/b DSK Legal
For Corporate Debtor: Advocates Adv. Rubin Vakil a/w Adv. Ruchi Kakkad i/b Integrum Legal