NATIONAL COMPANY LAW APPELLATE TRIBUNAL,

PRINCIPAL BENCH, NEW DELHI

Company Appeal (AT) (Insolvency) No. 75 of 2024

[Arising out of Order dated 18.12.2023 passed by the Adjudicating Authority

(National Company Law Tribunal), Mumbai Bench, Court-III in C.P. (IB) -
1165(MB)/C-III/2023]

In the matter of:

Bhavesh Harkishandas Mehta ...Appellant

Vs.

Kookmin Bank & Anr. ...Respondents

For Appellant: Ms. Yahya Batatawala, Ms. Meghna Rao, Ms. Uma
Chatterjee, Advocates.
For Respondents: Mr. Akshay Sapre, Mr. Abhijeet Swaroop, Ms. Shivani
Karmakar, Advocates.

WITH

Company Appeal (AT) (Insolvency) No. 77 of 2024

[Arising out of Order dated 18.12.2023 passed by the Adjudicating Authority

(National Company Law Tribunal), Mumbai Bench, Court-III in C.P. (IB) -
1164(MB)/C-III/2023]

In the matter of:

Atul Harkishan Das Mehta ...Appellant

Vs.

Kookmin Bank & Anr. ...Respondents

For Appellant: Mr. Abhijeet Sinha, Sr. Advocate with Ms. Yahya
Batatawala, Ms. Meghna Rao, Ms. Uma Chatterjee,
Mr. Saikat Sarkar, Advocates.
For Respondents: Mr. Akshay Sapre, Mr. Abhijeet Swaroop, Ms. Shivani
Karmakar, Advocates.
 2

WITH

Company Appeal (AT) (Insolvency) No. 1341 of 2023

[Arising out of Order dated 17.08.2023 passed by the Adjudicating Authority

(National Company Law Tribunal), Mumbai Bench, Court-I in C.P. (IB) -
452(MB)/ 2022]

In the matter of:

Saranga A. Aggarwal ...Appellant

Vs.

State Bank of India & Anr. ...Respondents

For Appellant: Mr. Krishnendu Datta, Sr. Advocate with Mr. Ravi
Raghunath, Ms. Varsha Himatsingka, Mr. Aniruth
Purusothaman, Advocates.
For Respondents: Mr. Ankur Mittal and Mr. Bhaskar, Advocates for R-
1.
Mr. Abhishek Anand, Mr. Karan Kohli, Mr. Sajal Jain,
Advocates for R-2.

JUDGMENT
(14th February, 2024)

Ashok Bhushan, J.

These three Appeals involving common question of law have been heard

together and have been decided by this common judgment.

2. Necessary facts giving rise to these Appeals are;-

2.1. Company Appeal (AT) (Insolvency) No.75 of 2024 has been filed against

the order dated 18.12.2023 passed by the Adjudicating Authority (National

Company Law Tribunal), Mumbai Bench, Court-III in CP(IB)-1165/(MB)/C-

III/2023 in an application filed by Kookmin Bank, the Respondent herein

under Section 95 of the IBC. In the impugned order, the Adjudicating

Authority has appointed a Resolution Professional who was directed to

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 3

examine the application and submit a report as provided under Section 99(1)

of the IBC. The Appellant, Personal Guarantor of the Corporate Debtor who

was Respondent in the application, aggrieved by the impugned order has

come up in the Appeal.

2.2. Company Appeal (AT) (Insolvency) No.77 of 2024 has been filed against

the order dated 18.12.2023 passed by the Adjudicating Authority (National

Company Law Tribunal), Mumbai Bench, Court-III in CP(IB)-1164/(MB)/C-

III/2023 in an application filed by Kookmin Bank under Section 95 against

the Appellant. The Adjudicating Authority by the impugned order appointed

a Resolution Professional who was directed to examine the application and

submit a report as provided under Section 99(1) of the IBC.

2.3. Company Appeal (AT) (Insolvency) No.1341 of 2023 has been filed

against the order dated 17.08.2023 passed by the Adjudicating Authority

(National Company Law Tribunal), Mumbai Bench, Court-I in C.P.(IB)-

452(MB)2022 by which the Adjudicating Authority has appointed a Resolution

Professional who was directed to examine the application and file report.

3. We have heard Shri Abhijeet Sinha, Learned Senior Counsel for the

Appellant in Company Appeal (AT) (Insolvency) Nos. 75 & 77 of 2024 and Shri

Krishnendu Datta, Learned Senior Counsel for the Appellant in Company

Appeal (AT) (Insolvency) No.1341 of 2023. We have also heard Shri Akshay

Sapre, Learned Counsel appearing for Kookmin Bank in Company Appeal (AT)

(Insolvency) Nos.75 & 77 of 2024 and Shri Ankur Mittal, Learned Counsel

appearing for the State Bank of India. Shri Abhishek Anand, Learned Counsel

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 4

has also appeared for Respondent No.2 in Company Appeal (AT) (Insolvency)

No.1341 of 2023.

4. Shri Abhijeet Sinha, Learned Senior Counsel for the Appellant in

support of the Appeals submits that the Appellants i.e. Bhavesh

Harkishandas Mehta and Atul Harkishan Das Mehta executed a Deed of

Personal Guarantee dated 24.11.2022 to the Financial Creditor in respect to

the credit facility extended by the Financial Creditor to the Corporate Debtor-

‘Compuage Infocom Limited’. Financial Creditor issued a demand notice to

the Personal Guarantor, Appellant herein on 29.03.2023 and thereafter filed

an application under Section 95 on 31.10.2023 against the Appellant.

Another Financial Creditor i.e. ‘Plus Unified Engaugement Services Pvt. Ltd.’

initiated Section 7 proceedings against the Corporate Debtor which was

ongoing before Court V of the NCLT, Mumbai wherein NCLT, Court V passed

an order on 02.11.2023 initiating Corporate Insolvency Resolution Process

(CIRP). It is submitted that Section 9 application was heard on 12.12.2023 by

Court-III and order has been passed on 18.12.2023. It is submitted that as

per Section 60(2) of the IBC, the application filed under Section 95 was

required to be heard by Court V of the NCLT Mumbai Bench where the

proceedings under Section 7 against the Corporate Debtor were pending. The

order dated 18.12.2023 passed is without jurisdiction. Learned Counsel for

the Appellant in support of his submission relied on three judgments of this

Tribunal which shall be referred hereinafter.

5. Shri Krishnendu Datta, Learned Senior Counsel appearing for the

Appellant in Company Appeal (AT) (Insolvency) No. 1341 of 2023 submits that

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 5

the insolvency petition had been filed by the Financial Creditor against the

Corporate Debtor- ‘AA Estates Private Limited’ which proceedings are pending

in NCLT, Court-V, Mumbai Bench. The State Bank of India filed an application

under Section 95 of the Code against the Appellant as Personal Guarantor on

20.01.2022 in which NCLT, Court-1, Mumbai Bench issued notice on

20.06.2022 while insolvency proceeding against the Corporate Debtor was

commenced by NCLT, Court-V on 06.12.2022. The order was passed on

17.08.2023 by the NCLT, Court-1, Mumbai Bench appointing an IRP. It is

submitted that the insolvency proceedings under Section 7 being pending in

NCLT, Court-V, NCLT Court-1, Mumbai Bench had no jurisdiction to pass

order in Section 95 application filed by the SBI. It is submitted that as per

sub-section (1) of Section 60, the Adjudicating Authority in relation to

insolvency resolution and liquidation for corporate persons including

corporate debtors and personal guarantors thereof shall be the National

Company Law Tribunal having territorial jurisdiction over the place where the

registered office of the corporate person is located. Thus, both for insolvency

resolution and personal guarantor proceedings shall be placed before same

Bench of NCLT as per Section 60(1). It is submitted that Section 60(2) provides

that where a CIRP proceeding of a Corporate Debtor is pending before a NCLT,

an application relating to the personal guarantor shall be filed before such

NCLT, clearly means that such Bench of NCLT where insolvency proceedings

are pending. It is submitted that the clear intendment of sub-section (2) of

Section 60 is that both the proceedings should be heard by same Bench. It is

submitted that there was no necessity for sub-section (2) of Section 60 unless

legislature intended that both the proceedings should be heard by same court.

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 6

It is submitted that although legislation is example of a bad drafting but

intendment of legislature is clear that both insolvency proceedings and

proceedings against personal guarantor should be heard by the same court.

In event both the proceedings are held in different courts of the same NCLT

Bench, the purpose and object shall not be fulfilled. Learned Senior Counsel

for the Appellant has also referred to a ‘Discussion Paper of Insolvency and

Bankruptcy Board of India’ dated 27.09.2023 on the subject discussion paper

on appointment of RP, sharing of report prepared by the RP with the personal

guarantor and mandating summoning of meeting of the creditors. Counsel for

the Appellant has also placed reliance on two judgments of this Tribunal

which shall be referred to hereinafter.

6. Shri Mr. Akshay Sapre, Learned Counsel appearing for Kookmin Bank

refuting the submissions of the Counsel for the Appellant submits that sub-

section (2) of Section 60 provides that where a corporate insolvency resolution

process proceeding is pending against the Corporate Debtor before a NCLT,

an application relating to the personal guarantor of such Corporate Debtor

shall be filed before such NCLT. It is submitted that the provision only

contemplates filing of an application before such NCLT. The provision never

intended that both the applications are to be filed in the same court room. It

is submitted that the Bench of NCLT is defined in IBC as well as the NCLT

Rules 2016. NCLT Mumbai Bench is one of the Benches of the Tribunal which

has been defined as the Adjudicating Authority for the area as contained in

the notification. It is submitted that the interpretation put by Counsel for the

Appellant of sub-section (2) of Section 60 is erroneous. It is not in the domain

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 7

of an applicant to file an application before a particular court. Filing of the

application is always in the Registry of the NCLT and which court shall hear

the application is the internal domain of the NCLT. The interpretation put by

the Appellant is not in accord with the scheme. Counsel has also

distinguished cases relied by Counsel for the Appellant in support of his

submission, it is submitted that none of the judgments support the

interpretation put by Appellant.

7. Shri Ankur Mittal, Learned Counsel appearing for the State Bank of

India refuting the submissions of the Appellant submits that the NCLT,

Mumbai Bench is a Bench of the NCLT which has been notified by the

notification dated 01.06.2016 issued by the Central Government in exercise

of powers under sub-section (1) of Section 419 of the Companies Act, 2013. It

is submitted that the NCLT Mumbai Bench which is located at Mumbai has

territorial jurisdiction over State of Chhattisgarh, State of Goa and State of

Maharashtra. All applications pertaining to the aforesaid geographical area

has to be filed before the NCLT Mumbai Bench. It is submitted that the

expression ‘shall be filed’ as occurring in sub-section (2) of Section 60 only

refers to filing to the NCLT Bench and not to a particular Court. The NCLT

Mumbai Bench for the purpose of effective adjudication and to deal with the

workload, is sitting in multiple combinations i.e. in five courts. Separate

courts of NCLT Mumbai Bench have not been notified under any separate

gazette notification. All the courts functioning in Mumbai NCLT constitute

part of NCLT Mumbai Bench only. In the present case, the CIRP proceedings

and proceedings under Section 95 have been proceeded by the same Bench

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 8

i.e. NCLT Mumbai Bench, which court shall hear the matter is the matter of

internal arrangement of the NCLT and depends on general and special orders

issued by the President of the NCLT or the members authorised. Learned

Counsel for the Respondent has also referred to Section 421 of the Companies

Act, 2013. It is submitted that the judgments relied by the Appellant are

distinguishable and does not support the submission of the Appellant.

8. We have considered the submissions of the Counsel for the parties and

perused the record.

9. The questions to be answered in this Appeal are:

(i) Whether when an insolvency proceeding is pending in different

court room of a particular Bench of the NCLT, if the proceedings under

Section 95 have been entertained by another court of the same Bench,

the order passed under Section 95 application by the court different

from court where insolvency proceeding is pending, is without

jurisdiction?

(ii) Whether Section 60(2) of the IBC contemplate application for

personal guarantor before NCLT or its Benches or it contemplates filing

of Section 95 application in the same court room of the NCLT?

10. Both the questions being inter-related, we proceed to consider the above

questions together.

11. NCLT has been constituted under Section 408 of the Companies Act,

2013. Section 408 of the Companies Act is as follows:-

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 9

“408. Constitution of National Company Law

Tribunal.— The Central Government shall, by
notification, constitute, with effect from such date as
may be specified therein, a Tribunal to be known as
the National Company Law Tribunal consisting of a
President and such number of Judicial and Technical
members, as the Central Government may deem
necessary, to be appointed by it by notification, to
exercise and discharge such powers and functions
as are, or may be, conferred on it by or under this Act
or any other law for the time being in force.”

12. Section 419 of the Companies Act, 2013 provides for ‘Benches of

Tribunal’. Central Government by Notification can constitute such number of

Benches of the Tribunal as specified under Section 419. Sub-section (1), (2)

and (3) of Section 419 are as follows:-

“419. Benches of Tribunal.— (1) There shall be

constituted such number of Benches of the Tribunal,
as may, by notification, be specified by the Central
Government.
(2) The Principal Bench of the Tribunal shall be at
New Delhi which shall be presided over by the
President of the Tribunal.
(3) The powers of the Tribunal shall be exercisable by
Benches consisting of two Members out of whom one
shall be a Judicial Member and the other shall be a
Technical Member:
Provided that it shall be competent for the
Members of the Tribunal authorised in this
behalf to function as a Bench consisting of a
single Judicial Member and exercise the

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 10

powers of the Tribunal in respect of such class

of cases or such matters pertaining to such
class of cases, as the President may, by
general or special order, specify:
Provided further that if at any stage of the
hearing of any such case or matter, it appears
to the Member that the case or matter is of such
a nature that it ought to be heard by a Bench
consisting of two Members, the case or matter
may be transferred by the President, or, as the
case may be, referred to him for transfer, to
such Bench as the President may deem
fit………”

13. As per Section 419 of the Companies Act, the Central Government has

issued notification dated 01.06.2016 constituting 10 Benches of NCLT.

Notification dated 01.06.2016 is as follows:-

“NOTIFICATION

New Delhi, the 1st June, 2016

S.O. 1935(E).- In exercise of the powers conferred by sub-section (1) of section

419 of the Companies Act, 2013 (18 of 2013), the Central Government hereby
constitutes the following Benches of the National Company Law Tribunal
mentioned in column (2) of the table below, located at the place mentioned in
column (3) and to exercise the jurisdiction over the area mentioned in column
(4), namely:-

Serial Title of the Bench Location Territorial Jurisdiction of

Number the Bench
(1) (2) (3) (4)
1. (a) National Company Law New Delhi (1) State of Haryana.
Tribunal, Principal Bench. (2) State of Rajasthan
(b) National Company Law (3) Union Territory of
Tribunal, New Delhi Bench Delhi
2. National Company Law Ahmedabad (1) State of Gujarat.
Tribunal, Ahmedabad Bench (2) State of Madhya
Pradesh

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 11

(3) Union territory of

Dadra and Nagar
Haveli.
(4) Union Territory of
Daman and Diu.
3. National Company Law Allahabad (1) State of Uttar Pradesh
Tribunal, Allahabad Bench (2) State of Uttarakhand
4. National Company Law Bengaluru (1) State of Karnataka
Tribunal, Bengaluru Bench
5. National Company Law Chandigarh (1) State of Himachal
Tribunal, Chandigarh Bench Pradesh.
(2) State of Jammu and
Kashmir
(3) State of Punjab.
(4) Union territory of
Chandigarh.
6. National Company Law Chennai (1) State of Kerala.
Tribunal, Chennai Bench (2) State of Tamil Nadu
(3) Union Territory of
Lakshadweep
(4) Union territory of
Puducherry.
7. National Company Law Guwahati (1) State of Arunachal
Tribunal, Guwahati Bench Pradesh
(2) State of Assam
(3) State of Manipur
(4) State of Mizoram
(5) State of Meghalaya
(6) State of Nagaland
(7) State of Sikkim
(8) State of Tripura
8. National Company Law Hyderabad (1) State of Andhra
Tribunal, Hyderabad Bench Pradesh
(2) State of Telangana
9. National Company Law Kolkata (1) State of Bihar
Tribunal, Kolkata Bench (2) State of Jharkhand
(3) State of Odisha
(4) State of West Bengal
(5) Union territory of
Andaman and Nicobar
Islands
10. National Company Law Mumbai (1) State of Chhattisgarh
Tribunal, Mumbai Bench (2) State of Goa
(3) State of Maharashtra

14. We, in the present case, are concerned with NCLT Mumbai Bench.

NCLT Mumbai Bench transacts its business by two members out of which

one is Judicial Member and another is Technical Member sitting in different

Courts. The powers of the Tribunal as per sub-section (3) of Section 419 shall

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 12

be exercisable by Benches consisting of two Members out of whom one shall

be a Judicial Member and the other shall be a Technical Member.

15. Sub-section (1) of Section 419 which empowers Central Government to

constitute Benches of the Tribunal and sub-section (3) provides the powers of

the Tribunal shall be exercisable by Benches consisting of two Members.

16. The expression ‘Benches’ has been defined in the IBC under sub-section

(2) of Section 3 which is as follows:-

“3. Definitions.- ……..(2) “bench” means a

bench of the Adjudicating Authority;

17. Section 5(1) defines ‘Adjudicating Authority’. Section 5(1) is as follows:-

“5. Definitions. – In this Part, unless the context

otherwise requires, –
(1) “Adjudicating Authority”, for the purposes of this
Part, means National Company Law Tribunal
constituted under section 408 of the Companies
Act, 2013 (18 of 2013)”

18. From the above definition, it is clear that the ‘Adjudicating Authority’ is

a NCLT which is constituted under Section 408 of the Companies Act, 2013

and the ‘Bench’ means a Bench of the Adjudicating Authority i.e. a Bench of

NCLT. Under Section 419, Central Government has constituted Benches of

the NCLT.

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 13

19. Now we come to Section 60 of the Code. Section 60 is part of Chapter

VI which deals with ‘Adjudicating Authority for Corporate Persons’. Sub-

section (1) and (2) of Section 60 are as follows:-

“60. Adjudicating Authority for corporate

persons. - (1) The Adjudicating Authority, in relation
to insolvency resolution and liquidation for corporate
persons including corporate debtors and personal
guarantors thereof shall be the National Company
Law Tribunal having territorial jurisdiction over the
place where the registered office of the corporate
person is located.
(2) Without prejudice to sub-section (1) and
notwithstanding anything to the contrary contained
in this Code, where a corporate insolvency resolution
process or liquidation proceeding of a corporate
debtor is pending before a National Company Law
Tribunal, an application relating to the insolvency
resolution or [liquidation or bankruptcy of a corporate
guarantor or personal guarantor, as the case may be,
of such corporate debtor] shall be filed before such
National Company Law Tribunal.”

20. Section 60(1) provides that the Adjudicating Authority, in relation to

insolvency resolution and liquidation for corporate persons including

corporate debtors and personal guarantors thereof shall be the National

Company Law Tribunal having territorial jurisdiction over the place where the

registered office of the corporate person is located. Thus, Section 60(1)

provides for Adjudicating Authority where insolvency proceedings or

proceedings against personal guarantor has to be initiated. NCLT thus is a

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 14

NCLT which has territorial jurisdiction over the corporate persons. Sub-

section (2) of Section 60 falls for consideration in the present case. Sub-

section (2) of Section 60 provides that where a corporate insolvency resolution

process of a corporate debtor is pending before a National Company Law

Tribunal, an application relating to the insolvency resolution of a personal

guarantor, as the case may be, of such corporate debtor shall be filed before

such National Company Law Tribunal. Sub-section (2) uses two expressions

before NCLT i.e. ‘a’ and ‘such’. The provision makes it clear that when

insolvency resolution process of a corporate debtor is pending before a NCLT,

an application relating to insolvency of personal guarantor shall be filed before

such NCLT. Uses of expression ‘a’ and ‘such’ makes it clear that both the

proceedings have to be before the same NCLT.

21. Both the parties have referred to the judgment of this Tribunal in

“State Bank of India, Stressed Asset Management Branch vs. Mahendra

Kumar Jajodia, Personal Guarantor to Corporate Debtor- Company

Appeal (AT) (Insolvency) No.60 of 2022” decided on 27.01.2022. Sub-

sections (1) and (2) of Section 60 came for consideration in the above judgment

where following has been laid down in paragraphs 7 and 8:-

“7. Sub-Section 1 of Section 60 provides that

Adjudicating Authority for the corporate persons
including corporate debtors and personal guarantors
shall be the NCLT. The Sub-Section 2 of Section 60
requires that where a CIRP or Liquidation Process of
the Corporate Debtor is pending before ‘a’ National
Company Law Tribunal the application relating to
CIRP of the Corporate Guarantor or Personal

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 15

Guarantor as the case may be of such Corporate

Debtor shall be filed before ‘such’ National Company
Law Tribunal. The purpose and object of the sub-
section 2 of Section 60 of the Code is that when
proceedings are pending in ‘a’ National Company
Law Tribunal, any proceeding against Corporate
Guarantor should also be filed before ‘such’ National
Company Law Tribunal. The idea is that both
proceedings be entertained by one and the same
NCLT. The sub-section 2 of Section 60 does not in any
way prohibit filing of proceedings under Section 95 of
the Code even if no proceeding are pending before
NCLT.
8. The use of words ‘a’ and ‘such’ before National
Company Law Tribunal clearly indicates that Section
60(2) was applicable only when a CIRP or Liquidation
Proceeding of a Corporate Debtor is pending before
NCLT. The object is that when a CIRP or Liquidation
Proceeding of a Corporate Debtor is pending before
‘a’ NCLT the application relating to Insolvency
Process of a Corporate Guarantor or Personal
Guarantor should be filed before the same NCLT.
This was to avoid two different NCLT to take up CIRP
of Corporate Guarantor. Section 60(2) is applicable
only when CIRP or Liquidation Proceeding of a
Corporate Debtor is pending, when CIRP or
Liquidation Proceeding are not pending with regard
to the Corporate Debtor there is no applicability of
Section 60(2).”

22. In the above case, the Adjudicating Authority has rejected the

application under Section 95 filed against the personal guarantor on the

ground that no insolvency proceedings are pending. Adjudicating Authority

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 16

held that unless the proceedings are pending, no application can be filed

under Section 95 which interpretation was disapproved by this Tribunal in

the above case. While considering sub-sections (1) and (2) of Section 60 in the

above context, above observations were made in paragraphs 7 and 8. Sub-

section (2) of Section 60 when uses expression NCLT, use of NCLT clearly

contemplates also a Bench of NCLT. As in the present case, the applications

have been filed before the NCLT, Mumbai Bench.

23. NCLT Rules framed under Section 469 of the Companies Act, 2013 also

defines ‘bench’ in sub-rule (7) of Rule 2, which is as follows:-

“2. Definitions. …-(7) “Bench” means a Bench of

the Tribunal constituted under section 419 of the Act
and includes Circuit Benches constituted by the
President with prior approval of the Central
Government to sit at such other geographical
locations as may be necessary having regard to
requirements.”

24. From the definition of ‘bench’ as contained in the IBC as well as NCLT

Rules, 2016 read with Sections 408 and 409, it is clear that the word ‘bench’

refers to a bench of NCLT as constituted under Section 419. The expression

‘bench’ as contained in IBC and NCLT Rules 2016 as well as under Section

419 of the Companies Act, 2013 only refers to Bench of NCLT. The legislature

never contemplated NCLT for courts of particular Bench of NCLT sitting in

composition of two members in a court, court of NCLT hearing a petition or

application was not under contemplation in sub-section (2) of Section 60.

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 17

Sub-section (2) of Section 60 refers to NCLT which includes also a bench of

NCLT, hence, the bench shall mean a bench constituted under Section 419.

25. We have noticed that Section 419(3) provides that the powers of the

Tribunal shall be exercisable by Benches consisting of two Members out of

whom one shall be a Judicial Member and the other shall be a Technical

Member. The above provision was for the purposes of laying down how the

power of NCLT shall be exercisable. The expression ‘benches’ as occurring in

Section 419(3) has to be read along with the expression ‘benches’ as used in

Section 419(1) of the Companies Act, 2013. Principal bench as well as the

benches of the tribunal constituted under Section 419(1) has to exercise

jurisdiction by two members; one judicial member and one technical member.

26. We may also refer Rule 16 of the NCLT Rules, 2016 which provides for

‘functions of the President’. Rule 16 of the NCLT Rules, 2016 is as follows:-

“16. Functions of the President.- In addition to the

general powers provided in the Act and in these rules
the President shall exercise the following powers,
namely:-
(a) preside over the consideration of cases by the
Tribunal;
(b) direct the Registry in the performance of its
functions;
(c) prepare an annual report on the activities of
the Tribunal;
(d) transfer any case from one Bench to other
Bench when the circumstances so warrant;
(e) to withdraw the work or case from the court of
a member.

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 18

(f) perform the functions entrusted to the

President under these rules and such other
powers as my be relevant to carry out his duties
as head of the Tribunal while exercising the
general superintendence and control over the
administrative functions of the Members,
Registrar, Secretary and other staff of the
Tribunal.”

27. All powers regarding functioning of the NCLT is to be under the special

and general orders of the President. The President is a head of the NCLT and

exercises general superintendence and control over the administrative

functions of the Members, Registrar, Secretary and other staff of the Tribunal.

The NCLT including its benches function under general superintendence and

control under the President. The President is master of the Roster with regard

to cases filed before the NCLT and its benches. Allocation of work in NCLT

and its benches is as per the general and special order of the President.

28. The Benches of the NCLT may consist of two or more members posted

at particular bench. In a particular bench business are transacted if there are

more than two members in different court room. For example, in NCLT

Mumbai Bench, there are five courts who are transacting business with

regard to cases filed before NCLT Mumbai Bench.

29. Learned Counsel for the Appellant contends that what is contemplated

under sub-section (2) of Section 60 is when a CIRP against the Corporate

Debtor has been filed before one particular court of a bench of the NCLT, an

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 19

application against personal guarantor should be filed in the same court of

the NCLT.

30. When we look into the Scheme of the IBC and the Rules framed

thereunder i.e. NCLT Rules 2016, it is clear that Section 60(2) only provided

for filing of the application against personal guarantor before the same NCLT

where insolvency resolution process against the corporate debtor is pending.

Legislature neither contemplated nor intended hearing of both the

applications by one particular court room. A bench of NCLT is a unit and filing

of application and petitions are before the bench of the NCLT and not before

a particular court. How the different courts transact their business and how

the cases are listed before different court of a particular bench are delineated

by general and special order passed by the President. An applicant who has

filed an application before the NCLT has no right to claim that his application

be heard by particular court of a bench. Transaction of business by different

courts of bench of NCLT, as observed above, is in the domain of the President

of the NCLT and sub-section (2) of Section 60 never intended to provide for

hearing of a particular application by a particular court. In the legislative

scheme, hearing of cases, applications and petitions by a particular court of

NCLT Bench was not in contemplation nor the provision was made in that

light. Submission of the Appellant that sub-section (2) of Section 60 is an

example of bad drafting and what was intended by legislature was that both

the proceedings should be heard by one court room cannot be accepted. All

legislation has to be accepted to be enacted containing clear legislative policy

and there is no warrant to accept the submission of the Appellant that sub-

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 20

section (2) of Section 60 is an example of bad drafting. Where the petition filed

for insolvency resolution under Sections 7, 9 and 10 as well as application

filed under Section 95 against the personal guarantor are to be heard together

or heard separately is a matter of general or special order issued by the

President for hearing the application filed in a particular bench and no fetter

can be read under sub-section (2) of Section 60 on exercise of general and

special order passed by the President for hearing of the applications.

31. We, in the present case, have to answer the question raised by the

Appellant that the order passed by a different court from one where insolvency

application is pending, is without jurisdiction. We, thus, in the present case

has to consider as to whether the order passed under Section 95 directing for

appointment of a Resolution Professional for submitting a report is without

jurisdiction only on the ground that it is passed by different court than one

where insolvency application is pending. Whether the court where Section 95

application is pending was required to necessarily sent the proceedings before

Court where insolvency proceedings is pending can be answered holding that

since the court did not lack jurisdiction it was not necessary for the court to

refuse to proceed to hear.

32. Now we come to the cases which have been relied by Counsel for the

Appellant in support of his submission. The judgment of this Tribunal in

Mahendra Kumar Jajodia (supra) was a case where this Tribunal were

examining the question as to when no insolvency proceeding pending against

corporate debtor whether an application under Section 95 can be entertained

by the Adjudicating Authority. The Adjudicating Authority in the said case

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 21

has refused to entertain the application against which Appeal filed was

allowed by this Tribunal and it was held that even if no insolvency proceedings

are pending against the Corporate Debtor, application under Section 95 can

be entertained. In the above context, sub-section (2) of Section 60 was

interpreted in Paragraphs 7 and 8 of the judgment, already noticed and

extracted above. The judgment was not considering the issue which has been

raised in the present appeal, hence, no assistance can be taken by the

Appellant from the above judgment.

33. The next case of this Tribunal relied by the Appellant in “Schweitzer

Systemtek India Pvt. Ltd. vs. Phoenix ARC Pvt. Ltd. & Ors.- 2017 SCC

OnLine NCLAT 235”. In the above case, an order was passed by the

Adjudicating Authority admitting Section 7 application and imposing an order

of moratorium. The expression ‘its’ as occurring in Section 14 with regard to

moratorium was under consideration in the above case. In the above context,

Section 60 was also noticed by this Tribunal. Observation has been made on

Section 60 in Paragraph 6 which is to the following effect:-

“6. In this respect one may also refer to Section 60 of

the I & B Code, as per which under sub-section (2) if
Corporate Insolvency Resolution Process, or
liquidation proceeding of a corporate debtor is
pending before the 'Adjudicating Authority, an
application relating to the 'insolvency resolution' or
'bankruptcy' of a personal guarantor required to be
filed before the same Bench of Adjudicating
Authority, meaning thereby, separate application for
initiation of resolution process require to be filed

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 22

against the guarantor before the same very Bench of

the Adjudicating Authority who is hearing the
corporate resolution process or liquidation proceeding
against principal corporate debtor.”

34. Learned Counsel for the Appellant has relied on the words ‘same very

bench of the Adjudicating Authority’ as occurring in paragraph 6 of the

judgment. The words ‘same very bench’ as occurring in Section 6 has to be

understood as per the definition of bench as contained in the IBC. This

Tribunal in the above case was not considering hearing of Section 95

application by a particular court and observation in paragraph 6 cannot be

read to mean that what was held by this Tribunal was that the same bench

of the NCLT should hear both the insolvency resolution process application

as well as application against personal guarantor. Reliance on the said

judgment is thus wholly erroneous.

35. Shri Abhijeet Sinha, Learned Senior Counsel for the Appellant has

placed reliance on judgment of the Hon’ble Supreme Court in “Amulya

Chandra Kalita vs. Union of India and Ors.- (1991) 1 SCC 181”. In the

above case, the question which came for consideration before the Hon’ble

Supreme Court was that whether the Administrative Member of the Central

Administrative Tribunal could alone decide the case in the face of the Hon’ble

Supreme Court’ earlier decision in “S.P. Sampath Kumar v. Union of India-

(1987) 1 SCC 124”. The Hon’ble Supreme Court answered the said question

in holding that as per the provision of Administrative Tribunals Act, 1985,

every bench of tribunal must consist of a Judicial Member and an

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 23

Administrative Member, hence, the case could not have been disposed of by

the Judicial Member alone. In paragraph 4, following was held:-

“4. In view of the above state of the law we have

no hesitation in coming to the conclusion that the
matter ought not to have been disposed of by the
Administrative Member alone. We, therefore, set
aside the impugned order and remand the matter to
the Tribunal for disposal in accordance with law by
a bench properly constituted as required by Section
5(2) of the statute. The civil appeal is accordingly
disposed of.”

36. The question which arose for consideration in the above case was

entirely different and has no bearing on the issue which has been sought to

be raised in the present case. The above judgment is clearly distinguishable.

37. Another judgment of this Tribunal relied by the Appellant is “Monica

Jajoo vs. PHL Fininvest Pvt. Ltd. & Anr.- 2023 SCC OnLine NCLAT 348”

in which a two members bench was hearing a case arising out of a proceeding

under Section 95 against personal guarantor. In the above case, application

under Section 95 was heard by Court IV of NCLT, New Delhi by which order,

proceedings were initiated and Resolution Professional was appointed. It was

contended that the liquidation proceedings of the Corporate Debtor were

pending in Bench III (Court III of the NCLT, New Delhi), hence, application

under Section 95 with regard to which order was passed by Court IV of NCLT

New Delhi is not in accordance with law. Judgment of this Tribunal in

“Mahendra Kumar Jajodia” (supra) was relied. Two member bench in the

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 24

aforesaid case noticed Section 60 of the IBC and made following observations

in paragraphs 23 and 24:-

“23. As noted above, the transfer petition bearing No.

TA(IBC)- 36(PB)/2022 was filed before the
Adjudicating Authority. It is also a fact that even
though this application was filed before the
Adjudicating Authority (Bench-IV), it did not take the
transfer application into consideration before passing
both the Impugned Orders, which is a requirement of
law as per section 60(1) and (2) of the IBC. Sub
sections (1) and (2) of section 60 lay down a
requirement of law, which stipulates and mandates
that an application relating to insolvency resolution
or liquidation of corporate guarantor of a corporate
debtor shall be filed before ‘such’ NCLT, where a
CIRP or liquidation proceedings of the ‘same’
corporate debtor is pending. This requirement of law
has also been noted in the matter of State Bank of
India, Stressed Asset Management Branch (supra) of
this Tribunal.
24. We are, therefore, of the view that Bench-IV of
NCLT, New Delhi could not have heard and
adjudicated upon the application under section 95
and thereafter application for replacement of the RP
under section 98 and it should have transferred
these applications to Bench-III which was already
considering the liquidation proceedings of the
corporate debtor under the IBC.”

38. The above observations of this Tribunal indicate that what was held in

the above case was on the basis of judgment of this Tribunal in “Mahendra

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 25

Kumar Jajodia” (supra). We have already noticed that the judgment of this

Tribunal in “Mahendra Kumar Jajodia” (supra) was not considering the

issue which has arisen in the present case, hence, this Tribunal could not

have relied in the said judgment for laying down the proposition as contained

in paragraphs 23 and 24 noticed above. We have already held that the word

‘NCLT’ used in sub-section (2) of Section 60 refers to NCLT including its

benches and was not to a particular court room. Thus, the conclusion to

which this Tribunal arrived in “Monica Jajoo” case is not in accord with the

statutory scheme delineated by the IBC. Reliance on judgment of this Tribunal

in “Mahendra Kumar Jajodia” (supra) was misplaced, hence, two-member

bench erred in laying down that sub-section (2) of Section 60 provides both

in liquidation proceeding as well as Section 95 proceedings have to be heard

by the same court of NCLT.

39. We, thus, are of the view that the judgment of this Tribunal in “Monica

Jajoo” does not lay down the correct law. The interpretation which is sought

to be advanced by the Appellant in event it is accepted shall lead to

uncertainty and conflict regarding jurisdiction of a NCLT to entertain an

application under Section 95. As observed above, all applications and

petitions filed in NCLT including its benches have to be heard and decided as

per the general and special order of the President. Applications are listed in

different court of one bench of NCLT as per the general and special order of

the President. When a matter is listed before a particular court of bench of

NCLT, the Court where the matter is listed has necessarily jurisdiction to

entertain it. The submission that court has no jurisdiction since application

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 26

of insolvency is pending in different court of same bench if accepted the same

will be contrary to general and special order of the President under which

Section 95 application is listed in different court. We, thus, are of the view

that in the facts of the present case, impugned order dated 18.12.2023 passed

by Court III of the NCLT, Mumbai Bench was well within its jurisdiction.

Similarly, the impugned order passed by NCLT, Court 1 dated 17.08.2023

was well within the jurisdiction of the court which passed the order. No

infirmity can be found with the impugned order on the submission which has

been advanced by the Appellant in the present appeal.

40. In view of the foregoing discussions, we answer both the above

questions in following manner:-

(i) When an insolvency proceeding is pending in different court room

of a particular Bench of the NCLT, the proceedings under Section 95

can be entertained by another court of the same Bench as per general

or special order of the President and order passed under Section 95

application by the court different from court where insolvency

proceeding is pending, shall not be without jurisdiction.

(ii) Section 60(2) of the IBC contemplate filing of application for

personal guarantor before NCLT or its Benches and not to a particular

courtroom of NCLT or its benches.

41. In result, both the Appeals are dismissed. We make it clear that we have

not gone into and considered the merits of the application under Section 95

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023
 27

filed by the Financial Creditor and it is for the Adjudicating Authority to

proceed and decide the application in accordance with law.

[Justice Ashok Bhushan]

Chairperson

[Barun Mitra]
Member (Technical)

[Arun Baroka]
Member (Technical)
New Delhi
Anjali

Company Appeal (AT) (Insolvency) No.75 of 2024, 77 of 2024 & 1341 of 2023