KOTAK MAHINDRA BANK LIMITED v. A. BALAKRISHNAN & Anr.

Per incuriam, when – Held: ‘Incuria’ literally means ‘carelessness’ – A decision or judgment can be per incuriam any provision in a statute, rule or regulation, which was not brought to the notice of the Court – It can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a co-equal or larger Bench. Words and Phrases: ‘Include’ – Meaning of – Held: Word ‘include’ is used in interpretation clauses to enlarge the meaning of the words or phrases occurring in the body of the statute. Allowing the appeal, the Court HELD : 1.1 From the scheme of the Insolvency and Bankruptcy Code, 2016, it could be seen that where any Corporate Debtor commits a default, a financial creditor, an A B C D E F G H 1074 SUPREME COURT REPORTS [2022] 5 S.C.R. operational creditor or the Corporate Debtor itself is entitled to initiate CIRP in respect of such Corporate Debtor in the manner as provided under the said Chapter. The default has been defined to mean non-payment of debt. The debt has been defined to mean a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. A claim means a right to payment, whether or not such right is reduced to judgment, fixed, disputed, etc. It is more than settled that the trigger point to initiate CIRP is when a default takes place. A default would take place when a debt in respect of a claim is due and not paid. A claim would include a right to payment whether or not such a right is reduced to judgment. [Para 38][1095-D-F]

1.2 It is a settled principle of law that the provisions of a statue ought to be interpreted in such a manner which would advance the object and purpose of the enactment. It is an equally well settled principle of law that all the provisions in the Statute have to be construed in context with each other and no provision can be read in isolation. [Paras 39 and 41][1095-F-G; 1096-A]

1.3 A person to be entitled to be a “financial creditor” has to be owed a financial debt and would also include a person to whom such debt has been legally assigned or transferred to. Therefore, the only question that would be required to be considered is, as to whether a liability in respect of a claim arising out of a Recovery Certificate would be included within the meaning of the term “financial debt” as defined under clause (8) of Section 5 of the IBC. It would be pertinent to note that in clause (8) of Section 5 of the IBC, i.e, the definition clause of the term “financial debt”, the words used are “means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes”. [Paras 43 and 44][1096-B-D]

1.4 It is settled position of law that when the word “include” is used in interpretation clauses, the effect would be to enlarge the meaning of the words or phrases occurring in the body of the statute. Such interpretation clause is to be so used that those words or phrases must be construed as comprehending, not only such things, as they signify according to their natural import, but A B C D E F G H KOTAK MAHINDRA BANK LIMITED v. A. BALAKRISHNAN & ANR. 1075 also those things which the interpretation clause declares that they shall include. In such a situation, there would be no warrant or justification in giving the restricted meaning to the provision. Applying these principles to clause (8) of Section 5 of the IBC, it could clearly be seen that the words “means a debt along with interest, if any, which is disbursed against the consideration for the time value of money” are followed by the words “and includes”.

Thereafter various categories (a) to (i) have been mentioned. It is clear that by employing the words “and includes”, the Legislature has only given instances, which could be included in the term “financial debt”. However, the list is not exhaustive but inclusive. The legislative intent could not have been to exclude a liability in respect of a “claim” arising out of a Recovery Certificate from the definition of the term “financial debt”, when such a liability in respect of a “claim” simpliciter would be included in the definition of the term “financial debt”. The trigger point for initiation of CIRP is default of claim. “Default” is non- payment of debt by the debtor or the Corporate Debtor, which has become due and payable, as the case may be, a “debt” is a liability or obligation in respect of a claim which is due from any person, and a “claim” means a right to payment, whether such a right is reduced to judgment or not.

It could thus be seen that unless there is a “claim”, which may or may not be reduced to any judgment, there would be no “debt” and consequently no “default” on non-payment of such a “debt”. When the “claim” itself means a right to payment, whether such a right is reduced to a judgment or not, if the contention of the respondents, that merely on a “claim” being fructified in a decree, the same would be outside the ambit of clause (8) of Section 5 of the IBC, is accepted, then it would be inconsistent with the plain language used in the IBC. The definition is inclusive and not exhaustive. Taking into consideration the object and purpose of the IBC, the legislature could never have intended to keep a debt, which is crystallized in the form of a decree, outside the ambit of clause (8) of Section 5 of the IBC. [Paras 47, 51 & 52][1097-G-H; 1098- A-B; 1100-B-G]

1.5 Having held that a liability in respect of a claim arising out of a Recovery Certificate would be a “financial debt” within the ambit of its definition under clause (8) of Section 5 of the A B C D E F G H 1076 SUPREME COURT REPORTS [2022] 5 S.C.R. A B C D E F G H IBC, as a natural corollary thereof, the holder of such Recovery Certificate would be a financial creditor within the meaning of clause (7) of Section 5 of the IBC. As such, such a “person” would be a “person” as provided under Section 6 of the IBC who would be entitled to initiate the CIRP. [Para 53][1100-H; 1101- A]

1.6 The words used in clause (a) of sub-section (1) of Section 14 of the IBC could not be read to mean that the decree-holder is not entitled to invoke the provisions of the IBC for initiation of CIRP. A plain reading of said Section would clearly provide that once CIRP is initiated, there shall be prohibition for institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority. The prohibition to institution of suit or continuation of pending suits or proceedings including execution of decree would not mean that a decree-holder is also prohibited from initiating CIRP, if he is otherwise entitled to in law. The effect would be that the applicant, who is a decree-holder, would himself be prohibited from executing the decree in his favour. [Para 54][1101- B-D]

1.7 It is a settled law that “Incuria” literally means “carelessness”. A decision or judgment can be per incuriam any provision in a statute, rule or regulation, which was not brought to the notice of the Court. It can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a co-equal or larger Bench. A perusal of the judgment of this Court in the case of Dena Bank’s case would reveal that this Court considered all the relevant provisions of the IBC and the earlier judgments of this court. There is no inconsistency in the judgment of this Court in the case of Dena Bank’s case with the earlier judgments of this Court on which reliance was placed. The submission that the judgment of this Court in the case of Dena Bank’s case being per incuriam to the statutory provisions and earlier judgments of this Court, is wholly unsustainable. [Paras 67 and 68][1105-F-H; 1106-A-B]

1.8 A liability in respect of a claim arising out of a Recovery Certificate would be a “financial debt” within the meaning of clause KOTAK MAHINDRA BANK LIMITED v. A. BALAKRISHNAN & ANR. 1077 (8) of Section 5 of the IBC and a holder of the Recovery Certificate would be a “financial creditor” within the meaning of clause (7) of Section 5 of the IBC. A person would be entitled to initiate CIRP within a period of three years from the date on which the Recovery Certificate is issued. [Para 69][1106-B-C]

1.9 Sub-section (22) of Section 19 of the Debt Recovery Act empowers the Presiding Officer to issue a certificate of recovery along with the final order, under sub-section (20), for payment of debt with interest. The certificate is given for the purposes of recovery of the amount of debt specified in the certificate. Sub-section (22A) of Section 19 of the Debt Recovery Act provides that any Recovery Certificate issued by the Presiding Officer under sub-section (22) shall be deemed to be decree or order of the Court for the purposes of initiation of winding up proceedings against a company, etc. [Para 71][1106- H; 1107-A-B]

1.10 The submission that the Recovery Certificate is for the limited purpose of initiation of winding up proceedings, if accepted, the word “limited” would be required to be inserted between the words “shall be deemed to be decree or order of the Court” and “for the purposes of initiation of winding up proceedings”. If the submission is to be accepted, sub-section (22A) of Section 19 of the Debt Recovery Act would have to be reframed as “Any recovery certificate issued by the Presiding Officer under sub-section (22) shall be deemed to be decree or order of the Court for the limited purposes of initiation of winding up proceedings…”. If the said submission is accepted, it would result in doing violence to the provisions of sub-section (22A) of Section 19 of the Debt Recovery Act. When the language of a statutory provision is plain and unambiguous, it is not permissible for the Court to add or subtract words to a statute or read something into it which is not there. It cannot rewrite or recast legislation. [Paras 72, 73 and 75][1107-B-D, H; 1108-A]

1.11 From the plain and simple interpretation of the words used in sub-section (22A) of Section 19 of the Debt Recovery Act, it would be amply clear that the Legislature provided that for the purposes of winding-up proceedings against a Company, A B C D E F G H 1078 SUPREME COURT REPORTS [2022] 5 S.C.R. A B C D E F G H etc., a Recovery Certificate issued by the Presiding Officer under sub-section (22) of Section 19 of the Debt Recovery Act shall be deemed to be a decree or order of the Court. It is thus clear that once a Recovery Certificate is issued by the Presiding Officer under sub-section (22) of Section 19 of the Debt Recovery Act, in view of sub-section (22A) of Section 19 of the Debt Recovery Act it will be deemed to be a decree or order of the Court for the purposes of initiation of winding-up proceedings of a Company, etc. However, there is nothing in sub-section (22A) of Section 19 of the Debt Recovery Act to imply that the Legislature intended to restrict the use of the Recovery Certificate limited for the purpose of winding-up proceedings. The submission of the respondents, if accepted, would be to provide something which is not there in sub-section (22A) of Section 19 of the Debt Recovery Act. In any case, when the Legislature itself has provided that any Recovery Certificate issued under sub-section (22) of Section 19 of the Debt Recovery Act will be deemed to be a decree or order of the Court for initiation of winding-up proceedings, which proceedings are much severe in nature, it would be difficult to accept that the Legislature intended that such a Recovery Certificate could not be used for initiation of CIRP, which would enable the Corporate Debtor to continue as an on-going concern and, at the same time, pay the dues of the creditors to the maximum. [Paras 77 and 78][1108-G-H; 1108-A- D]

1.12 A liability in respect of a claim arising out of a Recovery Certificate would be a “financial debt” within the meaning of clause (8) of Section 5 of the IBC. Consequently, the holder of the Recovery Certificate would be a financial creditor within the meaning of clause (7) of Section 5 of the IBC. As such, the holder of such certificate would be entitled to initiate CIRP, if initiated within a period of three years from the date of issuance of the Recovery Certificate. On facts, the application u/s. 7 IBC was filed within a period of three years from thedate on which the Recovery Certificate was issued. As such, the application under Section 7 IBC was within limitation and the NCLAT erred in holding that it is barred by limitation. The impugned judgment and order passed by the National Company Law Appellate Tribunal is quashed and set aside. [Paras 84, 85 and 86][1111-A-B; C-E] KOTAK MAHINDRA BANK LIMITED v.

A. BALAKRISHNAN & ANR. 1079 Dena Bank (Now Bank of Baroda) v. C. Shivakumar Reddy and Another (2021) 10 SCC 330 – affirmed. Paramjeet Singh Patheja v. ICDS Ltd. (2006) 13 SCC 322 : [2006] 8 Suppl. SCR 178 – distinguished. Subhankar Bhowmik v. Union of India and another 2022 SCC OnLine Tri 208; Jignesh Shah and Another v. Union of India and Another (2019) 10 SCC 750 : [2019] 12 SCR 678; Gaurav Hargovindbhai Dave v. Asset Reconstruction Company (India) Limited and Another (2019) 10 SCC 572 : [2019] 13 SCR 224; Nirmal Jeet Kaur v. State of M.P. and Another (2004) 7 SCC 558 : [2004] 3 Suppl. SCR 1006; Secretary to Govt. of Kerala, Irrigation Department and Others v. James Varghese and Others 2022 SCC OnLine SC 545; P. S. Ramamoorthy Sastry v. Selvar Paints and Varnish Works (Pvt.) Ltd. The Law Weekly, Vol. XCVII (97) dated 28th January, 1984 Part 1; Mukul Agarwal v. Royale Resinex Pvt. Ltd. Company Appeal (AT) (Insolvency) No.

777 of 2020 dated 30.03.2022; Swiss Ribbons Private Limited and Another v. Union of India and Others (2019) 4 SCC 17 : [2019] 3 SCR 535; Associated Indem Mechanical (P) Ltd. v. W.B. Small Industries Development Corpn. Ltd. and Others (2007) 3 SCC 607 : [2007] 1 SCR 174; Karnataka Power Transmission Corporation and another v. Ashok Iron Works Private Limited (2009) 3 SCC 240 : [2009] 1109; Pioneer Urban Land and Infrastructure Limited and Another v. Union of India and Others (2019) 8 SCC 416 : [2019] 10 SCR 381; Rameswar Prasad Kejriwal & Sons Ltd. v. Garodia Hardware Stores (2001) SCC OnLine Cal 586; Union of India and Others v. Dhanwanti Devi and Others (1996) 6 SCC 44 : [1996] 5 Suppl. SCR 32; The Regional Manager and Another v. Pawan Kumar Dubey (1976) 3 SCC 334 : [1976] 3 SCR 540; Vashdeo R. Bhojwani v. Abhyudaya Co-operative Bank Limited and Another (2019) 9 SCC 158 : [2019] 12 SCR 75; Balakrishna Savalram Pujari Waghmare and Others v.

Shree Dhyaneshwar Maharaj A B C D E F G H 1080 SUPREME COURT REPORTS [2022] 5 S.C.R. A B C Sansthan and Others [1959] 2 Suppl. SCR 476 : AIR 1959 SC 798 : [1959] 2 Suppl. SCR 476; Mohd. Shahabuddin v. State of Bihar and Others (2010) 4 SCC 653 : [2010] 3 SCR 911; Nasiruddin and others v. Sita Ram Agarwal (2003) 2 SCC 577 : [2003] 1 SCR 634; Bhanu Kumar Jain v. Archana Kumar and Another (2005) 1 SCC 787 : [2004] 6 Suppl. SCR 1104; State of U.P. v. Nawab Hussain (1977) 2 SCC 806 : [1977] 3 SCR 428; Gulabchand Chhotalal Parikh v. State of Bombay (now Gujarat) [1965] 2 SCR 547 – referred to. Dilworth v. Commissioner of Stamps (1899) AC 99; Thoday v. Thoday (1964) 2 WLR 371 – referred to. Case Law Reference (2021) 10 SCC 330 affirmed D [1977] 3 SCR 428 [1965] 2 SCR 547 [2019] 12 SCR 678 [2019] 13 SCR 224 distinguished distinguished referred to referred to [2004] 3 Suppl. SCR 1006 referred to [2019] 3 SCR 535 [2007] 1 SCR 174 [2009] 1 SCR 1109 [2019] 10 SCR 381 [1996] 5 Suppl.

SCR 32 [1976] 3 SCR 540 [2019] 12 SCR 75 [1959] 2 Suppl. SCR 476 [2010] 3 SCR 911 [2003] 1 SCR 634 referred to referred to referred to referred to referred to referred to referred to referred to referred to referred to [2006] 8 Suppl. SCR 178 distinguished [2004] 6 Suppl. SCR 1104 referred to E F G H Para 9 Para11 Para 11 Para 14 Para 14 Para 14 Para 40 Para 46 Para 48 Para 50 Para 60 Para 61 Para 63 Para 63 Para 74 Para 76 Para 79 Para 83 KOTAK MAHINDRA BANK LIMITED v. A. BALAKRISHNAN & ANR. 1081 CIVIL APPELLATE JURISDICTION: Civil Appeal No. 689 of A

2021. From the Judgment and Order dated 24.11.2020 of the National Company Law Appellate Tribunal, New Delhi in Company Appeal (AT) (Insolvency) No. 1406 of 2019. Guru Krishna Kumar, Sr. Adv., Mahesh Agarwal, Rishi Agrawala, Rohan Talwar, E. C. Agrawala, Advs. for the Appellant. S. Prabhakaran, V. Prakash, K. V. Vishwanathan, Sr. Advs., Ms. Iyengar Shubharanjani Ananth, M. A. Gouthaman, Ms. R. Soumya, Adarsh Mohandas, Abinesh S., Nishant, Rahul Sangwan, Sivagnanam K., Advs. for the Respondents. The Judgment of the Court was delivered by B. R. GAVAI, J.

The present appeal challenges the judgment and order dated 24th November, 2020 passed by the learned National Company Law Appellate Tribunal, New Delhi (hereinafter referred to as “NCLAT”) in Company Appeal (AT) (Insolvency) No. 1406 of 2019, thereby allowing the appeal filed by the respondent no. 1 – Director and reversing the order dated 20th September, 2019 passed by the learned National Company Law Tribunal, Chennai (hereinafter referred to as “NCLT”), whereby the application filed by the appellant under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC” for short) was admitted. The learned NCLAT while allowing the appeal held that the application filed by the appellant was time-barred and that issuance of Recovery Certificate would not trigger the right to sue.

A brief factual background giving rise to the present appeal is as under:

During the period between the years 1993 – 1994, Ind Bank Housing Limited (hereinafter referred to as “IBHL”) sanctioned separate credit facilities to these companies (hereinafter referred to as the “borrower entities”): (i) M/s Green Gardens (P) Ltd, (ii) M/s Gemini Arts (P) Ltd. and (iii) M/s Mahalakshmi Properties & Investments (P) Ltd. B C D E F G H 1082 SUPREME COURT REPORTS [2022] 5 S.C.R. A B C D E F G H The respondent no. 2 M/s Prasad Properties and Investments Pvt. Ltd. (hereinafter referred to as “the Corporate Debtor”) stood as the Corporate Guarantor/mortgagor and mortgaged its immovable property, situated in Guttala Begampet Village in Ranga Reddy District of Andhra Pradesh, by deposit of title deeds to secure the aforesaid credit facilities sanctioned to the borrower entities.

These borrower entities defaulted in repayment of the dues and subsequently IBHL classified all the facilities availed by them as Non – Performing Asset (“NPA” for short) in November 1997. Pursuant thereto, IBHL filed three civil suits before the High Court of Madras, against the borrower entities and the Corporate Debtor, for recovery of the amounts due. During the pendency of the suits, the appellant – Kotak Mahindra Bank Ltd. (hereinafter referred to as “KMBL”) and IBHL entered into a Deed of Assignment dated 13th October, 2006, wherein IBHL assigned all its rights, title, interest, estate, claim and demand to the debts due from borrower entities, to KMBL.

Pursuant to the said deed, KMBL and the borrower entities entered into a compromise on 7th August, 2006 (hereinafter referred to as “the said compromise”). The High Court vide a common judgment dated 26th March, 2007, recorded the said compromise between the parties to the effect that the Corporate Debtor was jointly and severally liable to pay the amount of Rs. 29,00,96,918/- due from the borrower entities to KMBL. It was claimed by KMBL that the borrower entities failed to make payments as per the said compromise and thus, KMBL issued a Demand Notice dated 26th September 2007 to them and the Corporate Debtor under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the SARFAESI Act”). The said notice was followed by a Possession Notice dated 10th January, 2008 issued under Section 13(4) of the SARFAESI Act, by the KMBL due to default in payment by the Corporate Debtor of the amount demanded. The KMBL further issued a Winding Up Notice dated 6th May, 2008 under sections 433 and 434 of the Companies Act, 1956 to the Corporate Debtor.

Aggrieved by the continuous default of payment by the Corporate Debtor and the borrower entities, KMBL filed three applications under Section 31(A) of the erstwhile Recovery of Debts Due to Banks and Financial Institutions Act, 1993, now known as the Recovery of KOTAK MAHINDRA BANK LIMITED v. A. BALAKRISHNAN & ANR. [B. R. GAVAI, J.] 1083 Debts and Bankruptcy Act, 1993 (hereinafter referred to as “the Debt Recovery Act”) before the Debt Recovery Tribunal (“DRT” for short) for issuance of Debt Recovery Certificates in terms of the said compromise entered into between the parties. The said applications came to be allowed by the DRT vide orders dated 31st March, 2017 and 30th June, 2017, and separate Recovery Certificates dated 7th June, 2017 and 20th October, 2017 came to be issued against each of the borrower entities and the Corporate Debtor. In the meanwhile, from the year 2008 to 2017, certain proceedings between the parties, with regard to a contempt petition filed by the KMBL as well as the dismissal of applications filed for issuance of Recovery Certificate and the subsequent grant of relief in a review application filed by the KMBL, were underway.

On the basis of the aforementioned Recovery Certificates, on 5th October, 2018 KMBL, claiming to be a financial creditor, filed an application under Section 7 of IBC, being CP/1352/IB/2018 before the learned NCLT and sought initiation of Corporate Insolvency Resolution Process (“CIRP” for short) against the Corporate Debtor, claiming an amount of Rs. 835,93,52,369/-. The said application came to be admitted by the learned NCLT on 20th September, 2019. The respondent no. 1, Director of the Corporate Debtor filed an appeal being Company Appeal (AT) (Insolvency) No. 1406 of 2019, against the said order of the learned NCLT before the learned NCLAT. The grounds raised by the respondent no. 1 in the said appeal were with regard to the application for initiating CIRP against the Corporate Debtor being filed after the expiry of limitation period. The said appeal filed by the respondent no. 1 came to be allowed vide impugned judgment and order dated 24th November, 2020 in the aforementioned terms.

We have heard Shri Guru Krishna Kumar, learned Senior Counsel appearing on behalf of KMBL, Shri S. Prabhakaran and Shri V. Prakash, learned Senior Counsel appearing on behalf of the respondent No.1 and Shri K.V. Viswanathan, learned Senior Counsel appearing on behalf of the respondent No.2.

Shri Guru Krishna Kumar, learned Senior Counsel submitted that the issue involved in the present proceedings is no more res integra. It is submitted that this Court in the case of Dena Bank (Now Bank of Baroda) vs. C. Shivakumar Reddy and another1 has held that once a claim fructifies into a final judgment and order/decree, upon adjudication, 1 (2021) 10 SCC 330 A B C D E F G H 1084 SUPREME COURT REPORTS [2022] 5 S.C.R. A B C D E F G H and a certificate of recovery is also issued authorizing the creditor to realize its decretal dues, a fresh right accrues to the creditor to recover the amount specified in the Recovery Certificate. It is submitted that in view of the law laid down by this Court in the case of Dena Bank (supra), the present appeal deserves to be allowed inasmuch as, the application under Section 7 of the IBC, filed by KMBL on 5th October, 2018 is within the period of three years from the dates of issuance of the Recovery Certificates being 7th June, 2017 and 20th October, 2017.

Shri Guru Krishna Kumar further submitted that the conduct of the respondents is that of a dishonest borrower. Having entered into the consent terms, which are decreed by the High Court of Madras vide order dated 26th March, 2007 and having not complied with the terms contained in the compromise decree, it is now not open to the respondents to oppose the admission of application under Section 7 of the IBC.

Shri K.V. Viswanathan, learned Senior Counsel, on the contrary, submitted that the cause of action has merged into the order of issuance of the Recovery Certificate by the DRT and therefore, by application of the doctrine of merger, the debt no more survives. Shri Viswanathan further submitted that the initiation of CIRP by KMBL would amount to filing of second proceedings for the very same cause of action and thus would be hit by the doctrine of res judicata and particularly, per rem judicatam. In this respect, he relied on the judgments of this Court in the cases of State of U.P. vs. Nawab Hussain2 and Gulabchand Chhotalal Parikh vs. State of Bombay (now Gujarat)3.

Shri Viswanathan further submitted that in view of the limited legal fiction under Section 19(22A) of the Debt Recovery Act, the Recovery Certificates cannot be treated as “decree” for all purposes. It is submitted that assuming that a decree-holder may initiate CIRP as a financial creditor, but the holder of a Recovery Certificate granted under Section 19(22) of the Debt Recovery Act is not entitled to initiate CIRP under the IBC as a financial creditor or a decree holder. He submitted that sub-sections (22) and (22A) of Section 19 of the Debt Recovery Act were brought on the statute book by The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 (Act No. 44 of 2016), which was enacted on 16th August, 2016 and brought into force from 4th November, 2016. He 2 (1977) 2 SCC 806 3 (1965) 2 SCR 547 KOTAK MAHINDRA BANK LIMITED v. A. BALAKRISHNAN & ANR. [B. R. GAVAI, J.] 1085 submits that the deeming fiction contained therein applies only for the purposes of initiation of winding up proceedings. The deeming fiction cannot be extended for any other purpose. In this respect, he relies on the judgment of this Court in the case of Paramjeet Singh Patheja vs. ICDS Ltd.4.

Shri Viswanathan further submitted that after 15th November, 2016, i.e., the date on which Section 255 of the IBC was brought into force, the Recovery Certificate holders lost their right to use their certificate as a “decree” for initiating winding-up proceedings under the Companies Act. Shri Viswanathan relied on the judgment of the Tripura High Court in the case of Subhankar Bhowmik vs. Union of India and another5 in support of his submission that a decree-holder cannot initiate CIRP. He submitted that the Special Leave Petition (Civil) No.6104 of 2022 challenging the judgment of the Tripura High Court in the case of Subhankar Bhowmik (supra) has been dismissed by this Court on 11th April, 2022.

Shri Viswanathan submitted that the judgment of this Court in the case of Dena Bank (supra) is per incuriam. He submitted that the said judgment is rendered without considering the provisions of sub- Sections (22) and (22A) of Section 19 of the Debt Recovery Act as well as clauses (6), (10), (11) and (12) of Section 3, clauses (7) and (8) of Section 5, Section 6 and Section 14(1)(a) of the IBC. He further submitted that the judgment of this Court in the case of Dena Bank (supra) has applied the judgments of this Court in the cases of Jignesh Shah and another vs. Union of India and another6 and Gaurav Hargovindbhai Dave vs. Asset Reconstruction Company (India) Limited and another7 incorrectly and as such, the judgment of this Court in the case of Dena Bank (supra) is rendered per incuriam. In this respect, he relied on the judgment of this Court in the case of Nirmal Jeet Kaur vs. State of M.P. and another8 so also the judgment of this Court in the case of Secretary to Govt. of Kerala, Irrigation Department and others vs. James Varghese and others9.