Canara Bank vs Manoj Kumar Sharma
- CitationCompany Appeal (AT) (Ins) No. 922 of 2020
Ratio decidendi
The rule this decision rests on
A reasoned order is an essential feature of the administration of justice: a party whose application is decided is entitled to know why it has been allowed or rejected, and an order that records no reasons, or only a bare direction without any reasoning, is non-speaking and cannot stand. Non-recording of reasons causes prejudice to the affected party and hampers the proper administration of justice, and that principle applies to judicial and quasi-judicial orders of the Adjudicating Authority with the same force as to administrative action. Where an interim order directing a creditor not to recover a personal guarantee is passed without reasons, without any stated basis for the direction, and without any reasoned consideration of the matter, the order is liable to be set aside on that ground alone, and the matter is to be decided afresh on merits after giving the parties due opportunity to be heard.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Canara Bank ....Appellant
Vs. Manoj Kumar Sharma & Ors. ...Respondents
Present For Appellant: Mr. PBA Srinivsan, Mr. P.S. Chandralekha, Ms. Ichchha Kalash and Mr. Parth Tandon, Advocates. For Respondents: Mr. Shaunak Mitra, Advocate for R-1. Mr. Lalit Mohan, Advocate for R-2. Mr. Rishav Banerjee and Mr. Neeraj Kr. Gupta, Advocates for R-3/RA.
ORDER
(Virtual Mode)
15.12.2021: The Appellant/Canara Bank has preferred the instant
Company Appeal (AT) (Ins) No. 922 of 2020 being dissatisfied with the order
dated 26.02.2020 in Misc. A (IB) No. 338/KB/2020 in C.P. (IB) No.
570/KB/2018, passed by the Adjudicating Authority (National Company Law
Tribunal, Kolkata Bench) Kolkata.
Earlier, the Adjudicating Authority (National Company Law Tribunal,
Kolkata Bench) while passing the impugned order dated 26.02.2020 in Misc. A
(IB) No. 338/KB/2020 in C.P. (IB) No. 570/KB/2018 had passed the following
order:
-2-
"Ld. Counsel for the applicant appears. Misc. A (IB) 338/KB/2020 is filed by the applicant directing the Canara Bank not to recover personal guarantee of one of the directors of the Corporate Person. We are told that Canara Bank has filed appeal against the order of resolution plan. At this stage, we are not expressing any opinion on merits of the matter. We direct the Canara Bank not to recover amount. They are directed to file reply by giving copy to the other side. Matter to appear on 26.03.2020."
At this juncture, this Tribunal after going through the impugned order
dated 26.02.2020 in Misc. A (IB) No. 338/KB/2020 in C.P. (IB) No.
570/KB/2018 passed by the Adjudicating Authority is of the considered
opinion that the said order is non-speaking order, and unreasoned one and
bereft of qualitative and quantitative details. In this connection, this Tribunal
refers to the Judgment of the Hon'ble Supreme Court in the matter of
"Assistant Commissioner, Commercial Tax Department, Works Contract
and Leasing, Kota" v. " Shukla and Brothers" reported in (2010) 4 SCC 785
wherein at paragraph 13 and 19, it is observed as under:
"The Supreme Court has consistently taken the view that recording of reasons is an essential feature of dispensation of justice. A litigant who approaches the court with any grievance in accordance with law is entitled to know the reasons for grant or rejection of his prayer. Reasons are the soul of orders. Non-recording of reasons could lead to dual infirmities; firstly, it may cause prejudice to the affected party and secondly, more particularly, hamper the proper administration of justice. These principles are not only applicable to administrative or executive actions, but they apply with -3-
equal force and, in fact, with a greater degree of precision to judicial pronouncements. The orders of the court must reflect what weighed with the court in granting or declining the relief claimed by the applicant."
In the light of foregoing, this Tribunal keeping in mind of the decision of
the Hon'ble Supreme Court in the matter of "Assistant Commissioner,
Commercial Tax Department, Works Contract and Leasing, Kota" v. "
Shukla and Brothers" reported in (2010) 4 SCC 785 which squarely applies
to the facts of the present case in the instant 'Appeal' and also by looking into
the impugned order is of the earnest opinion that the said impugned order is
liable to be set aside in the interest of justice especially for not ascribing or not
recording the reasons. Undoubtedly, spelling out of reasons in a given
proceeding before the Adjudicating Authority at the time of passing of the order
is an essential feature of dispensation of Justice in our Processual 'Justice
Delivery System'.
It must be borne in mind, that an Adjudicating Authority when it passes
an order, the parties to the litigation or entitle to know one way or other about
his application either being allowed or rejected. To put it succinctly, ascribing
reasons in an order is the 'Heart' and 'Soul' of the speaking order. Not
recording the reasons certainly will lead to infirmities like causing prejudice,
hardship to the affected party resulting in serious miscarriage of justice.
-4- Viewed in that perspective, this Tribunal is perforced to interfere with
the impugned order dated 26.02.2020 in Misc. A (IB) No. 338/KB/2020 in C.P.
(IB) No. 570/KB/2018, and sets aside the same in furtherance of substantial
cause of justice.
In fine, the instant CA (AT) (Ins) No. 922 of 2020 is allowed. No costs. The
Impugned order dated 26.02.2020 in Misc. A (IB) No. 338/KB/2020 in C.P. (IB)
No. 570/KB/2018 is set aside.
The Adjudicating Authority (National Company Law Tribunal, Kolkata
Bench) Kolkata is directed to decide the Misc. A (IB) No. 338/KB/2020 in C.P.
(IB) No. 570/KB/2018 afresh of course on merits, in fair, just and in a
dispassionate manner after providing due opportunities to respective parties
and uninfluenced, untrammeled observations made by this Tribunal in this
Appeal.
[Justice M. Venugopal] Member (Judicial)
[V. P. Singh] Member (Technical)
[Dr. Ashok Kumar Mishra] Member (Technical)
sr/gc Company Appeal (AT) (Ins) No. 922 of 2020
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