# In the matter of Nanubhai Nichhbhai Desai Vs. Omkara Assets Reconstruction Pvt Ltd & Anr CA(AT)(Insolvency) 262-2019

> NCLAT judgment dated 2019-04-15. Citation: TCN-2019-NCLAT-00673. The Respondent, M/s. Omkara Assets Reconstruction Pvt. Ltd., filed an application under…

- **Court:** NCLAT
- **Order date:** 15 Apr 2019
- **Citation:** TCN-2019-NCLAT-00673
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/nanubhai-nichhbhai-desai-vs-omkara-assets-reconstruction-pvt-ltd-anr-ca-0a949b98

## Summary

### Background

The Respondent, M/s. Omkara Assets Reconstruction Pvt. Ltd., filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016 against M/s. Anoushka Hospital Consultancy and Management Services Pvt. Ltd. ('Corporate Debtor'). The Appellant, a shareholder of the ‘Corporate Debtor', challenged the order passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, which admitted the application. The Appellant argued that there was a dispute referred to Arbitration, a Consent Award was passed on 12.08.2016, and an execution case was pending. They contended that there was no default as per the consented award and, therefore, the application under Section 7 was not maintainable.

## Facts

M/s. Omkara Assets Reconstruction Pvt. Ltd. (Respondent) filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016 against M/s. Anoushka Hospital Consultancy and Management Services Pvt. Ltd. (Corporate Debtor). The application was admitted by the Adjudicating Authority. Nanubhai Nichhbhai Desai (Appellant), a shareholder of the Corporate Debtor, challenged the admission order. A dispute between the parties was referred to Arbitration, and a Consent Award was passed on 2016-08-12. An execution case related to the award was pending. The Corporate Debtor defaulted on payments amounting to Rs. 17,81,54,000/- including interest, as of 2016-11-30. The Appellant argued that the Respondent should have pursued the execution of the award instead of

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## Issues and analysis

### Issue 1: Whether the existence of an arbitration award and a pending execution case bars the initiation of …

**Ratio:** The existence of an arbitration award and a pending execution case does not automatically

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**Reasoning:** The court reasoned that despite the arbitration award and pending execution, the

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate insolvency

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**Application:** In this case, the Corporate Debtor defaulted on payments amounting to Rs.

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +2 more
- **Appellants:** Nanubhai Nichhbhai…
- **Respondents:** Anoushka Hospital…; M/s.Omkara Assets…; +1 more

## Timeline

- **2016-08-12 — Consent Award…**: A Consent Award was passed in the…
- **2016-11-30 — Default by Corporate…**: The Corporate Debtor defaulted on payments amounting to Rs. 17,81,54,000/- including…

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