Disposed

In the matter of Sng Real Estate Private Limited [Ia No. 17-JPR-2019 in Cp No. (IB)-56-7-JPR-2018]

NCLT12 Jul 2023IA No. 17-JPR-2019 in CP No. (IB)-56-7-JPR-2018

Case brief

AI extract

What is this about?

The Tribunal directed the applicant in a Section 7 insolvency application to produce withheld documents (Power of Attorney and specific agreements) within 10 days, noting that refusal may lead to adverse inferences, and emphasized that the Code does not strictly follow CPC admission rules. The application was disposed of with this direction.

What did the court decide?

Direction to produce specified documents within 10 days; failure to comply may result in adverse inferences.

In the matter of Sng Real Estate Private Limited [Ia No… — Insolvency and Bankruptcy | NCLT (2023)

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IN THE NATIONAL COMPANY LAW TRIBUNAL

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JAIPUR BENCH

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CORAM: SHRI DEEP CHANDRA JOSHI, HON’BLE JUDICIAL MEMBER

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SHRI ATUL CHATURVEDI, HON’BLE TECHNICAL MEMBER

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IA No. 17/JPR/2019

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In CP No. (IB)-56/7/JPR/2018

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IN THE MATTER OF:

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DEEPAK ASHOK TIWARI

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…Financial Creditor

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VERSUS

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M/S SNG REAL ESTATE PRIVATE LIMITED

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…Corporate Debtor/Respondent

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MEMO OF PARTIES

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IA No. 17/JPR/2019:

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MR. DEEPAK ASHOK TIWARI 4204 SW Hollyhock St. Bentoville, AR, USA, 72712

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…Financial Creditor/Applicant

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VERSUS

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M/S SNG REAL ESTATE PRIVATE LIMITED R/o: 707, Paris Point Bani Park, Jaipur, Rajasthan- 302016

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…Corporate Debtor/Respondent FOR THE APPLICANT : Aditya Vijay, Adv. FOR THE RESPONDENT : Naresh Kumar Sejvani, Adv.

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Order Pronounced On: - 12.07.2023

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ORDER

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IA No. 17/JPR/2019

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CP No. (IB)-56/7/JPR/2018

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Per: Shri Deep Chandra Joshi, Judicial Member

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The brief facts of the present case are that the Petitioner namely Mr. Deepak Ashok Tiwari preferred an Application through Power of Attorney (‘POA’) executed in favour of Mr. Raj Kumar Tiwari under Section 7 of Insolvency and Bankruptcy Code, 2016 (‘IBC’/ ‘Code’) against M/s SNG Real Estate Private Limited (‘Respondent’/ ‘Corporate Debtor’).

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During the process of scrutiny of the file, the Registry pointed out certain defects which are as follows:

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I. Annexxure-2 needs Replacement

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II. Original Document required for Verification of Power of Attorney (Annexure-10 Page No. 61& 62) which is not available at present.

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III. Annexures 1-10 of MoU (Annexure-1 & Annexure-2) not submitted/not available.

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IV. Power of Attorney in favor of Shri Raj Kumar Tiwari for entering MoU is not submitted/not available.

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V. Copy of Tripartite Agreement with SBI not submitted.

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VI. Copy of agreement entered between Corporate Debtor and Financial Creditors by which it was consented to allot another flat to the Financial Creditors in lieu of return on investment of the first two years not submitted. (as mentioned at Page 4 of the Application)

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The captioned matter was listed for hearing before this Adjudicating Authority and vide Order dated 04.10.2018 this Adjudicating Authority directed the Applicant to cure the defects within a period of one week.

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The Applicant preferred an Affidavit vide Diary No. 699/2018 dated 29.11.2018 stating that the with respect to the Defect No. V , the Tripartite Agreement has been submitted by the Applicant to its Banker and despite

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IA No. 17/JPR/2019

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CP No. (IB)-56/7/JPR/2018

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repeated request, the Applicant has not been able to avail the said Agreement.

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Later the Applicant moved an Application bearing IA No. 17/JPR/2019 vide Diary No. 38/2019 dated 09.01.2019 wherein exemption was sought from filing certain documents pointed out in Defect IV and VI i.e. Copy of Agreement executed between the Corporate Debtor and Financial Creditor wherein it was consented to allot another flat to the Financial Creditor in lieu of Return on Investment and the Power of Attorney executed in favour of Shri Raj Kumar Tiwari for entering into the MOU on behalf of Mr. Deepak Ashok Tiwari.

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The Corporate Debtor was granted an opportunity to file reply on multiple occasions and vide Order dated 22.02.2019, the opportunity to file reply was closed. Thereafter, the Corporate Debtor in view of the closure of reply, filed an application bearing IA No. 87/JPR/2019 on 26.03.2019 against which this Adjudicating Authority vide Order dated 28.03.2019 observed as follows:

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“In the circumstances, we are not in a position to entertain this application and resultantly take the reply on record. However, it will not detract the Corporate Debtor to argue based on the pleadings as available before this Tribunal. It is also observed that reply cannot be taken on record as the application has not been allowed.”

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In the circumstances, the Applicant has filed the present application seeking exemption from filing the document listed in Defect No. IV and Defect No. VI i.e. Power of Attorney executed in favor of the Shri Rajkumar Tiwari for

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IA No. 17/JPR/2019

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CP No. (IB)-56/7/JPR/2018

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entering in the MOU on behalf of the Financial Creditor namely Mr. Deepak Ashok Tiwari and Copy of Agreement entered between the Corporate Debtor and Financial Creditor consenting to allot another flat to the Financial Creditor in lieu of Return on Investment of the first two years.

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We have heard the Ld. Counsels for the parties and perused the averments

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made in the Interlocutory Application and reply along with the documents enclosed with the application.

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The Steps taken by the Applicant with regard to certain defects have been

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enumerated in the chart here as below:

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*Defects raised by Registry*	_Rectification done by the Appl _	*icant*
I. Annexxure-2 needs Replacement	Replaced and rectified
II. Original Document required for Verification of Power of Attorney (Annexure-10 Page No. 61& 62) which is not available atpresent.	Verified with the Original 29.11.2018, hence cured.	on
III. Annexures 1-10 of MoU (Annexure- 1 & Annexure-2) not submitted/not available	Verified with the Original 29.11.2018, hence cured.	on
IV. Power of Attorney in favor of Shri Raj Kumar Tiwari for entering MoU is not submitted/not available	*IA No. 17/JPR/2019*filed Diary No. 38/2019 09.01.2019 seeking exemption filingof POA	vide dated from
V. Copy of Tripartite Agreement with SBI not submitted	An affidavit vide Diary 699/2018 dated 29.11.2018 submitted stating Trip Agreement has been submitte the Applicant to its Banker despite repeated request,	No. is artite d by and the

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IA No. 17/JPR/2019

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CP No. (IB)-56/7/JPR/2018

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	Applicant has not been able to avail the said Agreement.
VI. Copy of agreement entered between	*IA No. 17/JPR/2019*filed vide
Corporate Debtor and Financial	Diary No. 38/2019 dated
Creditors by which it was consented	09.01.2019 seeking exemption from
to allot another flat to the Financial	filing of copy of the agreement.
Creditors in lieu of return on
investment of the first two years not submitted. (as mentioned at Page 4
of the Application

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In the Insolvency and Bankruptcy Code, 2016, there is no provision of admission or denial of the documents as provided under the Code of Civil Procedure, 1908. In Insolvency proceedings, the parties are at liberty to challenge the admissibility of a document. The onus of proof lies upon the party alleging the set of facts. Therefore, it is only after being satisfied with the documents and pleadings placed, the Adjudicatory Authority determines the admission or rejection of an application under Section 7, 9, or 10 of the Code.

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11. The Defect No. I was duly replaced by the Applicant and thereby rectified. The Defect No. II and III were verified with the Original Copies on 29.11.2018, hence the same stand cured. With respect to Defect No. V, it is observed that an Affidavit stating that the Applicant has not been able to procure the Tripartite Agreement to cure the Defect No. V.

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On perusal of the record, with respect to Defect No. IV , it is seen that one MOU was executed between the Corporate Debtor namely M/S SNG Real

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IA No. 17/JPR/2019

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CP No. (IB)-56/7/JPR/2018

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Estate Private Limited i.e., the Builder and Mr. Deepak Ashok Tiwari (Financial Creditor). The said Agreement was entered into by Mr. Deepak Ashok Tiwari through his Power of Attorney holder Mr. Rajkumar Tiwari as a signatory to the MOU on behalf of Mr. Deepak Ashok Tiwari in capacity of his Power of Attorney holder. The Application has been filed seeking exemption from producing the said PoA.

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On perusal of the record, with respect to Defect No. VI , it is seen that an Agreement was entered between the Corporate Debtor and Financial Creditor consenting to allot another flat to the Financial Creditor in lieu of Return on Investment of the first two years. The said has not been produced and exemption is being sought to produce the same through this Application.

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The objections were raised at the Registry level with respect to nonproduction of documents. Generally, it is the duty of the party to lead the best evidence in his possession and when the party is called upon to produce the said evidence but fails to do so, the Authority may draw adverse inference, if such evidence is withheld. Although invariably taking the pleadings into consideration, the Authority may decide whether the document/evidence withheld has any relevance to the matter pending. Therefore, mere non-production of documents would not result in adverse inference.

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IA No. 17/JPR/2019

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CP No. (IB)-56/7/JPR/2018

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The Registry has raised Defect IV with regard to non-production of POA executed in favor of Mr Rajkumar Tiwari by Mr. Deepak Ashok Tiwari and as mentioned in the MOU dated 17.12.2015. The Registry has also raised Defect VI with regard to non-production of copy of Agreement entered between the Corporate Debtor and Financial Creditor consenting to allot another flat to the Financial Creditors in lieu of Return on Investment of the first two years and non-production of the Tripartite Agreement.

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The effect of withholding the above said documents has direct bearing with the admissibility of the documents relied upon by the Applicant. Hence exemption to produce the documents cannot be granted and adverse inference, after viewing the relevance of the documents into consideration, may be taken against the Applicant during the course of proceedings.

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While disposing of any proceedings, the Adjudicating Authority is not bound by the procedure laid down in the Court of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice. The Tribunal/ Adjudicating Authority shall have the same power as are vested in Civil Court under the Civil Procedure Court, 1908 in the matter of discovery or production of documents.

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The Applicant is directed to produce the documents within 10 days, failing which adverse inference may be drawn against the petitioners, in case the

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IA No. 17/JPR/2019

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CP No. (IB)-56/7/JPR/2018

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documents withheld has any relevance while disposing of the Application under Section 7 of IBC, 2016.

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In view of the foregoing, the Application is disposed off with aforementioned directions.

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The matter be posted on 17.08.2023 for further consideration.

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-Sd-

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DEEP CHANDRA JOSHI (JUDICIAL MEMBER)

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- Sd-

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ATUL CHATURVEDI (TECHNICAL MEMBER)

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IA No. 17/JPR/2019

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CP No. (IB)-56/7/JPR/2018

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In the matter of Sng Real Estate Private Limited [Ia No. 17-JPR-2019 in Cp No. (IB)-56-7-JPR-2018]

Case brief

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In the matter of Sng Real Estate Private Limited [Ia No. 17-JPR-2019 in Cp No. (IB)-56-7-JPR-2018]

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