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BEFORE THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL,
AT NEW DELHI
APPELLATE JURISDICTION
I.A. NO. OF 2024
IN
COMPANY APPEAL (AT) (INSOLVENCY) NO. OF 2024
IN THE MATTER OF:-
AJAY SINGAL (DIRECTOR OF GRJ DISTRIBUTORS
& DEVELOPERS PRIVATE LIMITED) …APPELLANT
VERSUS
MR. RANJAN CHAKRABORTI,
INTERIM RESOLUTION PROFESSIONAL
OF GRJ DISTRIBUTORS & DEVELOPERS
PRIVATE LIMITED- PROJECT
AVALON RANGOLI, DHARUHERA & ANOTHER …RESPONDENTS
APPLICATION ON BEHALF OF THE APPELLANT UNDER RULE 31 OF THE
NATIONAL COMPANY LAW APPELLATE TRIBUNAL RULES, 2016 FOR
STAY OF THE ORDER DATED 10.05.2024 PASSED BY THE HON’BLE
NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI, COURT-III IN C.P.
(IB) NO. 144 OF 2024 TITLED AS “M/S BAJRANG FIRE PROTECTION VS
GRJ DISTRIBUTORS & DEVELOPERS PRIVATE LIMITED”
MOST RESPECTFULLY SHOWETH:
1. RELIEFS SOUGHT
It is prayed that this Hon’ble Appellate Tribunal may, pending the hearing and final
disposal of the captioned Appeal, be pleased to grant the following relief(s):
i. Stay the Order dated 10.05.2024 passed by the Hon’ble National Company
Law Tribunal, New Delhi, Court-III in C.P. (IB) No. 144 of 2024 until the
adjudication of the current appeal filed by the Appellant;
ii. Pass such other & further orders(s) as this Hon’ble Appellate Tribunal may
deem fit and proper in facts and circumstances of the case.
2. BRIEF FACTS
i. The Appellant is filing the accompanying appeal under Section 61 of
the Insolvency & Bankruptcy Code seeking appropriate reliefs. The
accompanying appeal has been filed against the impugned Order
dated 10.05.2024 (“Impugned Order”) passed by Hon’ble
National Company Law Tribunal, Court-III, New Delhi
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(“Adjudicating Authority”) in C.P. (IB) No. 144 of 2024 titled as
“M/s Bajrang Fire Protection vs GRJ Distributors & Developers Private
Limited” (“Section 9 Application”) which was filed by Respondent
no. 2 under Section 9 of Insolvency and Bankruptcy Code, 2016
(“Code”).
ii. The Appellant has preferred the instant appeal being the Director of
GRJ Distributors & Developers Private Limited which is a private
limited company, incorporated under the provisions of the
Companies Act, 1956, having its registered office at 64, Scindia
House, Connaught Place, New Delhi 110001 (“Corporate
Debtor”).
iii. It is cogent to mention that the Corporate Insolvency Resolution
Process (“CIRP”) proceedings of the project Avalon Rangoli situated
at Sector 24, Dharuhera, Tehsil and District Rewari, Haryana
(“Project”) were initiated vide Order dated 10.05.2024 passed by
the Adjudicating Authority, in the Section 9 Application filed by
Respondent No. 2. Vide Order dated 10.05.2024 , the Respondent
no. 1 was appointed as Interim Resolution Professional (“IRP”) of
the Project of the Corporate Debtor.
iv. Respondent No. 2 had filed an application under Section 9 read with
against the Corporate Debtor alleging the debt and default
amounting to Rs. 1,24,16,610/- (Rupees One Crore Twenty Four
Lakhs Sixteen Thousand Six Hundred and Ten only) as on
31.01.2024 in respect of the supply and installation of the ventilation,
fire alarm and fire-fighting system in the Project Avalon Rangoli being
developed by the Corporate Debtor.
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v. In and around 2015, the Corporate Debtor approached the
Respondent No. 2 which is a turnkey contractor of fire hydrant and
fire alarm systems for the supply and installation of the ventilation,
fire alarm and fire-fighting system in one of its residential projects
‘Avalon Rangoli.’
vi. The Corporate Debtor issued a purchase order dated 04.09.2015
bearing reference no. GRJ/ARD/0409/2015 (“First Purchase
Order”) to the Respondent No. 2 amounting to Rs. 2,09,74,404/-
for availing the services of supply and installation of fire protection
system for the Project.
vii. Thereafter on 13.01.2017, the Corporate Debtor issued another
order for fixing, testing and commissioning of ventilation for the
basement at the Project site amounting to Rs. 1,12,50,710/-
(“Second Purchase Order”). Further, on 01.03.2017, the
Corporate Debtor issued another purchase order for supplying,
installation, testing and commissioning of fire alarm and public
address system for the Project amounting to Rs. 17,90,478/- (“Third
Purchase Order”).
viii. Respondent No. 2 did not install the fire protection systems at the
Project site in line with the purchase orders as issued by the
Corporate Debtor and further failed to provide proper ventilation
work as per the purchase order. The Respondent No. 2 also failed to
install the fire protection system in accordance with the standards
because of which the construction of the Project was stalled.
ix. Despite not providing services as per the standards, the Operational
Creditor issued certain invoices upon the Corporate Debtor. The
invoices raised by the Respondent No. 2 are detailed herein below:-
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S. No. Date of Invoice Amount (in Rs.)
1. 15/01/2016 Rs. 6,66,000/-
2. 22/06/2016 Rs. 19,85,089/-
3. 10/12/2016 Rs. 27,06,974.21/-
4. 06/01/2017 Rs. 38,43,795.92/-
5. 06/01/2017 Rs.66,17,088.99/-
6. 12/05/2017 Rs. 44,71,870.59/-
7. 07/11/2017 Rs. 20,29,392/-
8. 14/03/2017 Rs. 3,61,383.83/-
9. 12/05/2017 Rs. 19,09,462.71/-
10. 15/09/2017 Rs. 7,16,558/-
11. 21/03/2017 Rs. 15,94,133/-
x. From a perusal of the above-mentioned Invoices, it is apparent that
the invoices/ bills were raised by the Respondent No. 2 from
15.01.2016 till 15.09.2017.
xi. Thereafter, time and again the Corporate Debtor raised the issue of
deficiency in service but the Operational Creditor failed to address
the same. However, on account of the cordial business relationship
between the Appellant and the Respondent No.2, the Corporate
Debtor paid some amounts to Respondent No. 2 even though the
Respondent No. 2 provided sub-standard services to the Corporate
Debtor in the year 2016 & 2017. The Corporate Debtor has paid Rs.
48,78,334/- to the Respondent No. 2 from 15.06.2016 to 22.09.2017
in respect of the First Purchase Order, Rs. 10,00,000/- in respect of
the Second Purchase Order on 21.07.2017 and Rs, 8,00,000/-
towards the Third Purchase Order on 26.07.2017. The aforesaid can
be substantiated from the statement of accounts which were relied
upon by the Respondent No. 2 in the Section 9 Application.
xii. The Respondent No. 2 had alleged that Rs. 1,24,16,610/- (Rupees
One Crore Twenty-Four Lakhs Sixteen Thousand Six Hundred and
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Ten only) inclusive of the interest is the outstanding amount payable
by the Corporate Debtor towards the supply and installation of
ventilation, fire alarm and fire-fighting system in the Project of the
Corporate Debtor.
xiii. It is cogent to highlight that the Respondent No. 2 in the Section 9
Application had alleged that the date of default is 11.01.2023,
however, the Respondent No. 2 has shifted the date of default to
2023 only to further their malafide and to throw the Corporate
Debtor into unwarranted CIRP proceedings.
xiv. As per Section 238A of the Code, the provisions of Limitation Act,
1963 are applicable to the proceedings before the Adjudicating
Authority. Hence, the process of initiation of the CIRP proceedings
under Section 9 of the Code is governed by Article 137 of the
Limitation Act, 1963.Under the provisions of the Code, the right to
apply to the Adjudicating Authority accrues when the default occurs
and the period of limitation is three years from the date when the
right to apply accrues, i.e., the date of default. However, if the has
default occurred more than three years before the application was
filed, it would be time-barred in terms of Article 137 of the Limitation
Act.
xv. It is pertinent to mention herein that the alleged default has occurred
between 2016 to 2018 which is contrary to the alleged date of default
as mentioned by the Respondent No. 2 in the Section 9 application,
i.e., 11.01.2023. The Respondent No. 2 has conveniently taken the
date of alleged default to be 11.01.2023, however the Respondent
No. 2 has failed to annex any documents in the Section 9 Application
substantiating the contention of the Respondent No. 2 that any
default occurred after 2017. In fact, the Respondent No. 2 has filed
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the Section 9 Application on 22.02.2024 which is 8 years after the
occurrence of alleged default. Hence, the Respondent No. 2 has
failed to exercise their remedy under the existing laws within the
prescribed period of limitation.
xvi. In the landmark ruling of B.K. Educational Services Private
Limited vs Parag Gupta & Associates [(2019) 11 SCC 633] ,
the Hon’ble Supreme Court has categorically held that limitation is
applicable to applications filed under Section 7, Section 9 and Section
10 of the Code. It was also observed that the intent of the Code is
not to give a new lease of life to the debts which are time-barred.
Hence, the law of limitation is also applicable to the Section 9
Application that has been filed by Respondent No. 2.
xvii. Further, the Hon’ble Supreme Court in Babulal Vardharji Gurjar
vs Veer Gurjar Aluminium Industries Private Limited &
another [(2020) 15 SCC 1] had examined the timeframe within
which the Section 7 and Section 9 applications could be filed before
the Adjudicating Authority. It was observed that the objection
regarding limitation goes to the root of the matter and touches upon
the jurisdiction of the Adjudicating Authority to proceed with the
claim of the financial creditor or the operational creditor. While
relying upon the ratio as laid down in B.K. Educational Services
(supra), the Hon’ble Supreme Court had held that the period of
limitation for an application seeking initiation of CIRP proceedings of
a corporate debtor is governed by Article 137 of Limitation Act which
is three years from the date when the right to apply accrues, i.e.,
the date of default.
xviii. At this juncture, it is pertinent to mention herein that the Respondent
No. 2 has not acted to recover the alleged outstanding amounting
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since 2016. Hence, it is evident that the Respondent No. 2 has slept
over the legal remedies that were available to him and has
approached the Adjudicating Authority only in 2024 in an attempt to
misuse the provisions of the Code by unnecessarily initiating the
CIRP proceedings of the Project of the Corporate Debtor.
xix. The Adjudicating Authority has failed to take into consideration that
that the alleged default relates back to the year 2016 and the
Respondent No. 2 had filed Section 9 Application on 22.02.2024, thus
the claim of Respondent No. 2 is barred by time. Hence, the alleged
default had occurred over three years prior to the date of filing of
the application.
xx. The Adjudicating Authority has failed to take into consideration that
Respondent No. 2 has failed to adduce any evidence for the year
2017 onwards which can substantiate that the alleged debt is not
time barred.
xxi. The Adjudicating Authority has failed to ascertain the correct date of
default in the Section 9 application which was filed by Respondent
No. 2. The Adjudicating Authority has wrongly considered that the
date of default as 11.01.2023, being misled by Respondent No. 2,
even though there has been no transaction post 2017 between the
parties.
xxii. The facts and circumstances leading up to the captioned Appeal and
the grounds assailing the Impugned Order are set out in detail in the
main Appeal. The Appellant/Applicant craves leave to read the main
Appeal as a part and parcel of the instant Application and to adopt
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the facts and submissions made therein in support of the present
Application.
3. BASIS ON WHICH INTERIM ORDERS PRAYED FOR:
(i) The Adjudicating Authority has failed to take into consideration that
the alleged default relates back to the year 2016 and the Respondent
No. 2 had filed Section 9 Application on 22.02.2024, thus the claim of
Respondent No. 2 is barred by time.
(ii) The Adjudicating Authority has failed to take into consideration that
the period of limitation for filing an application seeking initiation of
CIRP under Section 9 of the Code is governed by Article 137 of the
Limitation Act.
(iii) The Adjudicating Authority has failed to take into account the intent
and spirit of the law as laid down by the Hon’ble Supreme Court in
B.K. Educational Services (supra) wherein it was held that the
limitation period for filing an application under Section 9 of the Code
is of three years, which is to be counted from the date of default.
(iv) The Adjudicating Authority has wrongly considered that the date of
default as 11.01.2023, being misled by Respondent No. 2, even though
there has been no transaction post 2017 between the parties.
4. BALANCE OF CONVENIENCE:
No prejudice would be caused to any of the parties if the present application
is allowed. However, unless the present application is allowed and the Order
dated 10.05.2024 passed by the Adjudicating Authority, New Delhi in C.P.
(IB) No. 144 of 2024 is not stayed, the Appellant herein would suffer
irreparable loss and injury. Hence, it is in the interest of justice that the
reliefs prayed for in the present Application are granted to the Appellant.
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Verified at New Delhi on this 12 -Ii.. day of June, 2024
THROUGH
~~,~~
(SANDEEP BHURARIA) (MONISH SURENDRAN)
(NISHTHA GROVER)
ZEUS LAW ASSOCIATES
Counsels for Appellant
2, Palam Marg, Vasant Vihar,
New Delhi-ll00S7
Ph: 011-41733090;9810000639;9717371601;
Email IDs:[email protected]
[email protected]
[email protected]
Date: 11 .O,? 2,b'2-L1
Place: New Delhi
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DECLARATION BY APPELLANT [APPLICANT
The Appellant/Applicant above named hereby solemnly declared that nothing
material has been concealed or suppressed herein and further declared that the
enclosures and typed set out material papers relied upon and filed upon and filed
herewith are true copies of the original/fair reproduction of the original/true
translation thereof.
~
Verified at New Delhi on this 1'- day of 1tcA....L , ..... 024.
\}J~f~
COUNSEL FOR THE APPELLANT APPELLANT I APPLICANT
IAPPLICANT
VERIFICATION:
I, Ajay Singal, 5/0 Raj Kumar Singal, the above-named Applicant , do hereby
verify that the contents of para nos. __ to 1 2 of the accompanying
application are true to my personal knowledge and paras 3 to 4 are
believed to be true on legal advice received from the counsel and that no
material facts have been suppressed or concealed herein.
~~f~
COUNSEL FOR THE APPELLANT
IAPPLICANT
THROUGH
\}J;~~
(SAN DEEP BHURARIA) (MONISH SURENDRAN)
(NISHTHA GROVER)
ZEUS LAW ASSOCIATES
Counsels for Appellant/Applicant
2, Palam Marg, Vasant Vihar,
New Delhi-ll00S7
Ph: 011-41733090
Email IDs: [email protected]
[email protected]
Date: It· of,. 2-eJ ~
Place: New Delhi
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BEFORE THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL,
AT NEW DELHI
APPELLATE JURISDICTION
I.A. NO. OF 2024
IN
COMPANY APPEAL (AT) (INSOLVENCY) NO. OF 2024
IN THE MATTER OF:-
AlAY SINGAL (DIRECTOR OF GRl DISTRIBUTORS
&. DEVELOPERS PRIVATE LIMITED) ... APPELLANT
VERSUS
MR. RANJAN CHAKRABORTI,
INTERIM RESOLUTION PROFESSIONAL
OF GRl DISTRIBUTORS &. DEVELOPERS
PRIVATE LIMITED- PROJECT
AVALON RANGOLI, DHARUHERA &. ANOTHER ... RESPONDENTS
AFFIDAVIT
AFFIDAVIT OF MR. AlAY SINGAL, SON OF RAJ KUMAR SINGAL,
RESIDENT OF AR-S02B, 2ND FLOOR, ARAUAS, GOLF COURSE ROAD,
SECTOR 42, GURGAON, HARYANA-122002, PRESENTLY AT NEW DELHI
I, Ajay Singal, the above-named deponent, do hereby affirm and declare as
under:-
1. That I am the Applicant in the accompanying Interlocutory Application
filed in captioned appeal.
2. That I am fully conversant with the facts of the case and thus
competent and authorized to swear this affidavit.
3. That the accompanying Interlocutory Application in the present appeal
has been drafted under my instructions and the contents thereof,
except the legal averments contained therein, are true and correct to
the best of my knowledge and belief. The legal averments contained
therein are true and correct on the basis of the legal advice, received
by me and believed by me to be true and correct.
t no part of this affidavit is false and no material facts have been
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5. That all annexures filed with the accompanying application are true
copies of their respective originals.
D5PON ENT
VERIFICATION:
I, Ajay Singal, the above-named Deponent, do hereby verify that the
contents of this affidavit are true and correct and that no part of this
affidavit is false and no material facts have been concealed therefrom .
,
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