TOPIC: LITIGANT’S CAPACITY TO AMEND PETITION, IN VIEW OF CHANGE IN LAW
Amish Jaysukhlal Sanghrajka & Anr. Vs. Alshar Shanti Realtors Pvt. Ltd.
[NCLT, Mumbai, Date of Order- 25.02.2019]
In this case a Miscellaneous Application was submitted by the Applicants on 16.07.2018 who had also filed a Petition on Form No.5 on 11.12.2017 in the capacity of Operational Creditor in respect of an Operational Debt of ₹66,28,000/- (Principal amount) and interest thereon of ₹21,74,792/- against M/s. Akshar Shanti Realtors Pvt. Ltd., Mumbai, alleged Corporate Debtor. Thereafter, on 06.06.2018 the Insolvency and Bankruptcy Code (Amendment) ordinance, 2018, came into existence vide which the payments made by homebuyers’ were said to have the commercial effect of borrowing so, that was to be regarded as a financial debt credited by the homebuyers to the realtors. In the light of the said amendment, the Petitioner submitted that although the Petition was filed u/s. 9 of IBC but in view of the amendment in Insolvency Code the claim of outstanding debt falls within the provisions of section 7 of the Insolvency Code, therefore, an amendment was sought.
So the primary question of law involved in this case was whether a litigant can be permitted to carry out the amendment if required under changed provisions of a law?
The respondent argued that the Petitioner had tried to abruptly change the terms and also demanded a refund. Moreover, the Petition filed u/s.9 of The Code was not maintainable because of the change in the provisions in IBC. The change came into effect from 06.06.2018 onwards, hence the Petition filed u/s.9 of IBC was not maintainable. The said amendment was not retrospective in nature, therefore, the Petition already filed u/s.9 must not be considered as Petition u/s.7 of the IBC.
After considering the arguments advanced by both sides, the NCLT held that the letter and spirit of the Ordinance as well as the view expressed by the Hon’ble Supreme Court in Chitra Sharma’s case was that the rights of the home buyers be not suffered. Keeping this message in mind, the Bench observed that the amendment had become mandatory due to a change in the law. It was not the case that the Petitioner himself is seeking amendment on his own to overcome any of his mistakes by carrying out rectification/ amendment. But the situation was that due to the “operation of law” the amendment in question was mandatorily required. Therefore, a conclusion was drawn that if a litigant seeks to carry out the amendment, if required under changed provisions of law, then such request be allowed for legal dispensation of a case. The amendment was thus a requirement of law and not own volition of the Petitioner.
Read Judgement at-