# In the matter of Ajay Chaturvedi Vs JM Financial Asset Reconstruction CO. Ltd. & Anr. CA (AT) (Insolvency) No. 320-2018

> NCLAT judgment dated 2018-11-29. Citation: TCN-2018-NCLAT-00046. The appeal was filed by Mr. Ajay Chaturvedi, a shareholder of Yes Power & Infrastructure Ltd.…

- **Court:** NCLAT
- **Order date:** 29 Nov 2018
- **Citation:** TCN-2018-NCLAT-00046
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ajay-chaturvedi-vs-jm-financial-asset-reconstruction-co-ltd-anr-ca-8f5c7810

## Summary

### Background

The appeal was filed by Mr. Ajay Chaturvedi, a shareholder of Yes Power & Infrastructure Ltd. (the Corporate Debtor), against the order dated May 11, 2018, passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Mumbai. The Adjudicating Authority admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by JM Financial Asset Reconstruction Company Ltd. (the Financial Creditor).

## Facts

Mr. Ajay Chaturvedi, a shareholder of Yes Power & Infrastructure Ltd., filed an appeal against the order dated May 11, 2018, passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Mumbai. The order admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by JM Financial Asset Reconstruction Company Ltd. The appellant argued that no 'substituted service' was made, and the notice was not received. The appellant also contended that an application under Section 7 cannot be filed against a 'Corporate Guarantor'. The Financial Creditor had invoked the guarantee under the SARFAESI Act, 2002 on November 18, 2013.

## Issues and analysis

### Issue 1: Whether the admission order dated 11th May, 2018 is bad having been passed ex parte by misleading …

**Ratio:** Even if the service of notice of admission was not served, it would be a mere formality,

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**Reasoning:** The court reasoned that remitting the case on the ground of non-service of notice would

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**Interpretation:** This implies that procedural lapses, such as non-service of notice, may not be

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**Application:** The court applied this principle to the specific facts by stating that even if

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Ajay Chat…
- **Respondents:** Yes Power &…; JM Financial…

## Timeline

- **2018-05-11 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Mumbai passed…
- **2013-11-18 — Notice under SARFAESI…**: The 'Financial Creditor' issued a notice under the 'SARFAESI Act, 2002', invoking the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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