BEFORE THE NATIONAL COMPANY LAW TRIBUNAL,

MUMBAI BENCH, MUMBAI

IN
COMPANY APPLICATION (IB) _______OF 2019

Aurangabad Gymkhana Pvt Ltd …Applicant/Operational Creditor

Versus
Omkar Realtors & Developers & Pvt. Ltd & Ors. …Corporate Debtors

AFFIDAVIT IN REPLY ON BEHALF OF CORPORATE DEBTOR

NO. 2

I, ____________ of Mumbai Indian Inhabitant, Constituted

Attorney of Corporate Debtor no. 2 above named, having office at Omkar
House, Off Eastern Express Highway, Opp. Sion Chunabhatti Signal,
Sion (East), Mumbai – 400 022, do hereby solemnly affirm and state as
follows:-
1. I say and submit I have read a copy of the Company Application
(IB) no.____________ filed by the Applicant/Financial Creditor
and am aware of the facts and am able to depose the same.

2. At the outset, I deny and dispute each and every allegations and/or
averments made in the Company Application which are contrary to
and/or inconsistent with what is stated herein below. Nothing shall
be deemed to have been admitted by Corporate Debtors for want of
non-denial, unless specifically done so herein.

3. At the threshold, I say that the Petitioner has wrongfully impleaded

Respondent nos 1 and 2 as Corporate Debtors to the present
Petition. I say that as per the Petition, the alleged loan was procured
by the erstwhile Partnership firm which is now converted into
 Respondent no. 3 and there is absolutely no case made out against
the Respondent nos. 1 and 2. It appears that the said Respondent
nos. 1 and 2 have been impleaded as Corporate Debtors merely
because they are the partners of Respondent no. 3. I say that there is
no provision either under the IBC Code or any other law or
judgment / authority which sanctions the impleadment of parties as
Corporate Debtors purely because they’re partners / directors of the
corporate person against whom principal allegation is made. In the
event this Hon’ble Court entertains the present Petition, it would
tantamount to this Hon’ble Tribunal piercing the corporate veil,
which is only the domain of a Civil Court. I also say that by
impleading the Respondent nos 1 and 2, the Petitioner has made
three corporate persons as corporate debtors qua a single debt. I say
that either the Petitioner files individual petition against each of the
Respondent or a separate petition against the corporate person, who
the Petitioner feels owes the alleged debt. I also say that in the
present array of parties, the Petitioner has paid deficient court fees.
In view of the above, I say that the very tenability of the present
Petition appears to be a gross abuse of the process of the IBC Code
and thus this Petition has to be dismissed with exemplary cost on
this ground alone.
4. Without prejudice to the above, I say that Petitioner has approached
this Hon’ble Court with unclean hands. I say that the Petitioner is a
stooge put up by one Surendra Surana who is also a director in the
Petitioner Company. I say that the said Surendra Surana was the
erstwhile partner of the Respondent no. 3 firm, who had actually
taken the alleged loan in 2013. It was only in November, 2015, that
new partners were impleaded in Respondent no. 3 LLP. Further
under Deed of Retirement dated 6th November, 2015, the said
Surendra Surana agreed to pay several loans including the alleged
loan. Thereafter the said Surendra Surana also filed a commercial
 suit being 589 of 2017 before the Hon’ble High Court and again
agreed under the Consent Terms to deal with the alleged loan. In
utter disregard to the above understanding, the said Surendra
Surana approached this Hon’ble Tribunal through this Applicant as
well as other two entities being KLJ Plasticizers Ltd and KLJ
Resources Ltd. It is very important to reiterate here that the said
Surendra Surana is a director of the present Petitioner and the
present transaction is nothing short of a related party transaction
which is barred by law. I say that the fraudulent intention of the
said Surendra Surana is evident from the above, since, the said
Surana has taken the loan whilst he was a partner and secondly the
loan is taken by the Petitioner wherein the Surendra Surana himself
is a director. In fact the MOU dated 7th March, 2013 is signed by
Surendra Surana and Mahendra Surana, who are brothers.
Moreover, the said Surendra Surana is also a joint account holder
with the Petitioner. In the circumstances there is no room for doubt
that Surendra Surana through various entities is seeking to extort
monies from these Respondents and thus this Hon’ble Tribunal is
humbly requested to refrain from entertaining the present Petition
which is being masqueraded in the name of the Petitioner. Hereto
annexed and marked as Exhibit ___ is a copy of the ROC records
reflecting Surendra Surana as the director of Petitioner.

5. At the further outset and without prejudice to above, I say that the
alleged debt forming part of the Petition appears to have arisen
from a MOU dated 7th March, 2013. I say that from the date of the
said MOU, it is clear that the Petitioner is seeking to rely upon a
time barred debt. I say that assuming that the said loan was
advanced in furtherance of the said MOU, the period of limitation
elapsed on or before March, 2016, however, the captioned Petition
 is filed in the year 2019. Accordingly, the present Petition is barred
under the law of limitation.

6. Without prejudice to the above, I say that the alleged loan has
advanced by the Petitioner contrary to the provisions of the Money
Lender’s Act. I say that the Petitioner does not possess the requisite
license required under the Money Lender’s Act and thus the
Petitioner is debarred from making any claim in furtherance of the
said transaction. Moreover, I also say that the Petitioner does not
appear to be in the business of advancing loans and thus the present
transaction is ultravires the memorandum of association of the
Petitioner Company and therefore not permissible in law. (PLEASE
SEE THE MEMORANDUM OF THE PETITIONER BECAUSE
IN THE MOU THEY SAY THAT THE LOAN IS GIVEN
BECAUSE THEY HAVE SURPLUS FUNDS)

7. Without prejudice to above, I say that a perusal of the Petition

reflects that the Petitioner is seeking to initiate CIRP proceedings
on the strength of the MOU dated 7 th March, 2013. I say that by
virtue of Consent Terms entered between parties, the said MOU has
been superseded. I say that it is a settled position in law that once a
contract is superseded by parties then the earlier contract cannot be
enforced for any purpose whatsoever. In view of the same, this
Hon’ble Tribunal need not entertain the present Petition since its
edifice is based upon the earlier MOU dated 7th March, 2013.

8. I say that the Petitioner is seeking to rely upon the Consent Terms
dated 1st June, 2018 filed in Commercial suit no. 589 of 2017 to
justify the default. At the very outset, I say that the said suit was
withdrawn against this Respondent, which is also recorded in the
order dated 1st June, 2018. Without prejudice to the same, I say that
 the Petitioner is an alien to the said Consent Terms. That apart, the
Petitioner was not even a party Defendant to the said suit and thus
by no stretch of imagination can the Petitioner propound upon the
Consent Terms in support of his otherwise paralyzed case. Without
prejudice to the same, I say that the Petitioner has intentionally not
reproduced the other portion of the Consent Terms, which says that
the obligation to pay is of Surendra Surana (Plaintiff). I say that the
said consent terms contemplate various reciprocatory obligations
between parties. I say that in order to claim under the Consent
Terms, the Petitioner will have to first demonstrate its locus and
secondly that Surendra Surana has performed / discharged his
obligations.

9. I also say that simultaneous with the present Petition, the Petitioner
in order to pressurize this Respondent has filed Contempt Petition
__ of 2019. I say that the said Contempt Petition was listed on
________, wherein this Hon’ble Court was pleased to make the
following observation:
“this is a fit case where the applicant should have gone straight to
the police and file an FIR as the same is a cognizable offence”

Being aggrieved by the above observation, this Respondent

approached the Hon’ble NCLAT vide Appeal _________ of 201.
By way of order dated _______, the Hon’ble NCLAT was pleased
to note that the above observation was unwarranted. The said
Appeal is now pending adjudication. Hereto annexed and marked
as Exhibit ___ is a copy of the order dated _________ passed by
the Hon’ble NCLAT. I further crave leave to refer and rely upon
the Appeal proceedings filed before the Hon’ble NCLAT.
10. I further say that the alleged transaction of loan is entered into
between then partners of Surana Constructions (Wadala) and the
Applicant herein in 2013. Subsequently, Corporate Debtor No. 1
Omkar Realtors and Developers Pvt. Ltd. entered into a Term Sheet
dated 13th May, 2015 with the then partners of Surana
Constructions (Wadala) to take over implementation of the Slum
Rehabilitation Scheme on Land admeasuring 8099.49 sq.mtrs.
approximately comprising of C.S. No. 195(pt), 196(pt), 197(pt),
200(pt), 1/204, 2/204, 205(pt) and 207(pt) of Saltpan Division,
Antop Hill, Wadala, Mumbai- 400037 of Anandnagar SRA Co-
operative Housing Society Limited (“said Property”) for the
consideration and on the terms and conditions recorded therein. A
copy of the said Term Sheet dated 13 th May, 2015 is annexed as
annexure-___ to the above Application.

11. I further say that pursuant to the aforesaid Term Sheet, a Deed of
Admission cum Reconstitution came to be executed wherein the
Corporate Debtor Nos. 1 and 2 were admitted as partners on the
terms and conditions as more particularly recorded therein.

12. Subsequently by a Deed of Retirement dated 6 th November, 2015

Mr. Surendra Surana retired as a partner of the firm Surana
Constructions (Wadala). In Clause No. 23.3 & 23.11 of the
Retirement Deed it categorically records that all prior liabilities will
be paid by retiring partners. The said Clause No. 23.3 and 23.11 are
reproduced hereinbelow for sake of convenience.
“23.3. The Retiring Partners declare that none of them have
at any time borrowed any money or incurred any debts for or on
account of or on behalf of the firm and no taxes and/or levies are
outstanding and payable by any of them and each of the Retiring
Partners hereby indemnify and keep indemnified the Partners
 against all actions, suits, proceedings and costs, charges and
expenses in respect of any liability or money borrowed or debt
incurred by the Retiring Partners for or on behalf of the firm or
otherwise affecting the firm or any of the partners.

23.11.The Retiring Partners represent to the Continuing Partners

that other than the liabilities mentioned in Annexure D hereto,
there are no other liabilities of the firm as on the date of this Deed
(“the said Liabilities”). The Retiring Partners will be personally
and jointly and severally liable and responsible to repay/discharge
the said Liabilities within 90 days from the date hereof, in
accordance with the agreement between the Continuing Partners
and the Retiring Partners and will indemnify and keep the Firm
and the Continuing Partners duly indemnified in this regard.”

A copy of the Deed of Retirement dated 6 th November, 2015 is

annexed as Annexure ___ to the captioned Petition.

13. I further say that the Term Sheet dated 13 th May 2015 and other
documents were disputed by erstwhile partner Mr. Surendrakumar
Surana by filing Commercial Suit No. 589 of 2017 before Hon’ble
High Court at Bombay. The said Commercial Suit was disposed of
by filing Consent Terms dated 1 st June, 2018. I say that the said suit
was withdrawn against this Respondent. Without prejudice to the
same , I say that under the said Consent Terms, the Corporate
Debtor No. 3 has undertaken to pay a total sum of Rs.
101,00,00,000/- as a consideration against the performance of
obligations, acts, deeds and matters set out in the said Consent
Terms by the said Surendrakumar Surana. It is pertinent to note that
all the obligations under the Consent Terms were reciprocatory in
nature.
14. I further say in consideration of Rs. 101,00,00,000/- said Mr.
Surendrakumar Surana agreed to ensure repayment of loans,
advances and liabilities as more particularly set out in the Annexure
V to the said Consent Terms and also undertake to obtain no dues
certificate in the format as required by the Corporate Debtor No. 3.
Further, in terms of the said Consent Terms the said Surendrakumar
Surana agreed to vacate 91 slum dwellers from the said property
and it is expressly agreed between the parties that Corporate Debtor
No. 3 will repay the loans and advances to the creditors/lenders as
mentioned in Annexure 5 (including the alleged loan) to the said
Consent Terms will be made only after eviction of the said 91 slum
dwellers from the said property and adjust the said amount towards
the total consideration payable to the said Surendrakumar Surana.
Here it is important to mention that the said Surendrakumar Surana
has not satisfactorily discharged all his obligations under the
Consent Terms and thus this Respondent is not liable to pay any
amount to the Petitioner. I also say that in furtherance of his illegal
motives, Surendra Surana has also filed a Contempt Petition ___ of
2019 before the Hon’ble High Court, however, it is pertinent to
note that till date no show cause notice has been issued by the
Hon’ble High Court. A copy of the Consent Terms dated 31 st May,
2018 is annexed as Annexure __ to the present Petition. The
Corporate Debtors herein crave leave to refer to and rely upon true
and correct interpretation of the said Consent Terms. I also crave
leave to refer and rely upon the Contempt proceedings filed by
Surendra Surana before the Hon’ble High Court.

15. In view of the above, I shall now deal with the captioned Petition
paragraph / part wise:
a. With reference to Part I to III, I say that the same are matter of
records and hence warrants no comment.
b. With reference to Part IV sr no. 1, I say that in view of what is
mentioned hereinabove, I deny the contents of which are
contrary to what is set out by me herein above. I specifically
deny that this Respondent owes any debt to the Petitioner much
less an amount of Rs. 12,81,70,166/- along with 18% interest
upto 31.12.2019. I further say that the Petitioner in this portion
confirms that the alleged loan was advanced upon the request of
Surendra Surana.
c. With reference to Part IV sr no. 2, I deny the contents of the
same and I reiterate that in view of what is mentioned
hereinabove, no amount is due to the Petitioner.
d. With reference to Part V Sr no. 2, I say that the Petitioner is
seeking to rely upon the Consent Terms dated 1 st June, 2018
filed in Comm suit no. 589 of 2017 to justify the default. At the
very outset, I say that the said suit was withdrawn against this
Respondent, which is also recorded in the order dated 1 st June,
2018. Without prejudice to the same, I say that the Petitioner is
an alien to the said Consent Terms. That apart, the Petitioner
was not even a party Defendant to the said suit and thus by no
stretch of imagination can the Petitioner propound the Consent
Terms in support of his otherwise paralyzed case. Without
prejudice to the same, I say that the Petitioner has intentionally
not reproduced the other portion of the Consent Terms, which
says that the obligation to pay is of Surendra Surana (Plaintiff). I
say that the said consent terms contemplate various
reciprocatory obligations between parties. I say that in order to
claim under the Consent Terms, the Petitioner will have to first
demonstrate its locus and secondly that Surendra Surana has
performed / discharged his obligations.
 e. With reference to Part V sr no. 8, I say that the Petitioner has
annexed several documents including a copy of the Consent
Terms dated 7th August, 2019. As far as the Consent Terms are
concerned, I say that the said Terms were executed to put an
amicable end to the disputes between the parties. Nowhere in the
said consent terms, have the parties admitted the liabilities
alleged in the captioned Petition. I say that the consent terms
were a result of several out of the court negotiations held
between the parties. I say that these negotiations were genuinely
undertaken to settle the dispute and thus they will have to treated
as without prejudice discussions initiated to put an end to the
disputes between parties. I however say that this contention is
without prejudice to the objection raised by me in paragraph 7
above. (IF AVAILABLE THEN PLEASE ANNEX EMAILS
WHICH SAYS WITHOUT PREJUDICE DISCUSSIONS)

16. In view of what is stated hereinabove, I say that merely because I

am the partner of the Corporate Debtor no. 3, I cannot be made as a
party to the present Petition. It is respectfully submitted that this
Respondent is not liable for the repayment of the purported loan
availed by the erstwhile partner of the Corporate Debtor no. 3 and
the Applicant’s claim of whatsoever nature is only against said
Surendrakumar Surana. Further, as agreed in the said Consent
Terms, the said Surendrakumar Surana has not discharged all his
obligations and thus this Respondent is not liable to pay any
amount to the Petitioner.
17. I also say that it is a settled principle that for the purpose of an
application dealing with a financial debt, the Applicant has to prove
two vital things, firstly that the debt is legal and that the debt is due
and payable. I say that in the present matter, the debt is not
permissible in law as mentioned in the foregoing paragraph and
 also the alleged debt is not payable by this Respondent. Further it is
also clear that the Petitioner is a bogey put up by Surendra Surana
who had indulged in related party transactions. Thus, it would be
against the principle of natural justice to make the Respondent go
through such a draconian proceedings under the IB Code, 2016.
18. In the circumstances, I reiterate that these proceedings are nothing
but a tactic of the Petitioner to illegally extort monies from the
Respondent. I say that such nature of Petitions shall not be
entertained and shall be dismissed with heavy compensatory costs.

Solemnly affirmed at Mumbai )

Dated this ___ day of )

Diamondwala & Co.

Advocates for the Corporate Debtor no 2