Dilip Chhabria vs Minda Capital Pvt. Ltd

Dilip Chhabria ...Appellant

Vs.

Minda Capital Pvt. Ltd. ...Respondent

Present: For Appellant: - Mr. Rajiv Ranjan, Senior Advocate with Mr. Nishant Gautam, Mr. Vardhman Kaushik and Mr. Ravi Singh, Advocates.

For Respondent:- Mr. G P Madaan, Ms. Payal Juneja and Mr. Utkarsh Mishra, Advocates.

ORDER

07.01.2019─ Mr. Dilip Chhabria, Shareholder and Director of 'Dilip

Chhabria Design Pvt. Ltd.' has challenged the order dated 14th December,

2018 passed by the Adjudicating Authority (National Company Law

Tribunal), Mumbai Bench, Mumbai, whereby and whereunder, the

application under Section 7 of the Insolvency and Bankruptcy Code, 2016

("I&B Code" for short) filed by 'Minda Capital Private Limited'- ('Financial

Creditor') has been admitted.

2. The main plea taken by the learned counsel for the Respondent is

that the Adjudicating Authority had not issued any notice prior to

admission of the application under Section 7 of the 'I&B Code'.

3. Learned counsel for the Respondent submits that notice was issued

by the 'Financial Creditor' and an affidavit of proof of service of notice

Contd/-................

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relating to filing of the case has been enclosed. However, it has not been

disputed that the Adjudicating Authority had not issued any notice nor

there is any record to suggest that notice was served on the 'Corporate

Debtor'.

4. Learned counsel for the parties submits that the matter has already

been settled and 'Terms of Settlement' dated 3rd January, 2019 has been

filed.

5. In "M/s. Innoventive Industries Ltd. v. ICICI Bank & Anr.

─Company Appeal (AT) (Insolvency) No. 1 & 2 of 2017", this Appellate

Tribunal referring to Section 424 of the Companies Act, which has adopted

by XIth Schedule of the 'I&B Code' held that the Adjudicating Authority is

required to issue limited notice to the 'Corporate Debtor' before admission

of an application.

6. In the present case, as we find that the aforesaid procedure has not

been followed and the Adjudicating Authority has violated rules of natural

justice by not issuing any notice to the 'Corporate Debtor' about the date

of admission, we have no other option but to set aside the impugned order

dated 14th December, 2018. It is accordingly set aside.

7. The matter having already settled between the parties, we are not

remitting the matter back to the Adjudicating Authority.

Company Appeal (AT) (Insolvency) No. 804 of 2018 -3-

8. In effect, order (s), passed by the Adjudicating Authority appointing

'Interim Resolution Professional', declaring moratorium, freezing of

account, and all other order (s) passed by the Adjudicating Authority

pursuant to impugned order and action taken by the 'Interim Resolution

Professional', including the advertisement published in the newspaper

calling for applications all such orders and actions are declared illegal and

are set aside. The application preferred by Respondent under Section 7 of

the 'I&B Code' is dismissed. Learned Adjudicating Authority will now close

the proceeding. The 'Dilip Chhabria Design Private Limited'- ('Corporate

Debtor') is released from all the rigour of law and is allowed to function

independently through its Board of Directors from immediate effect.

9. The Adjudicating Authority will fix the fee of 'Interim Resolution

Professional' and 'Dilip Chhabria Design Private Limited'- ('Corporate

Debtor') will pay the fees of the 'Interim Resolution Professional', for the

period he has functioned. The appeal is allowed with aforesaid

observation. However, in the facts and circumstances of the case, there

shall be no order as to cost.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice Bansi Lal Bhat) Member(Judicial) Ar/g

Company Appeal (AT) (Insolvency) No. 804 of 2018