Dinesh Goyal vs Dcb Bank Ltd

Mr. Dinesh Goyal ...Appellant

Vs.

DCB Bank Ltd. ...Respondent

Present: For Appellant: - Mr. Ajatshatru S. Mina and Ms. Aishwarya, Advocates.

O R D E R

10.07.2019─ 'DCB Bank Limited'- ('Financial Creditor') filed

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

("I&B Code" for short) against 'M/s. Fort Biotech Private Limited'-

('Corporate Debtor') which was admitted on 8th March, 2019.

2. Though no petition on behalf of the 'Corporate Debtor'- ('M/s. Fort

Biotech Private Limited') was maintainable through the suspended Board

of Directors having taken over by the 'Interim Resolution Professional' on

behalf of the 'Corporate Debtor', an application was filed for review or

recall of the order dated 8th March, 2019 on the ground that the

'Corporate Debtor' had not received the notice as there was a dispute

between the landlord of premises with the 'Corporate Debtor'.

Contd/-........

-2-

3. The Adjudicating Authority (National Company Law Tribunal),

Jaipur Bench (Rajasthan) by impugned order dated 7th June, 2019 held

that it has no power of review nor it can recall the order under Rule 11 of

the National Company Law Tribunal Rules, 2016.

4. Section 420 (2) of the Companies Act, 2013, reads as follows:

"420. Orders of Tribunal.─.......(2) The Tribunal

may, at any time within two years from the date of

the order, with a view to rectifying any mistake

apparent from the record, amend any order passed

by it, and shall make such amendment, if the mistake

is brought to its notice by the parties:

Provided that no such amendment shall be

made in respect of any order against which an

appeal has been preferred under this Act."

5. In the present case, as there is no mistake apparent from the record

and in absence of any typographical error, it was not open to the

Adjudicating Authority to take any recourse of sub-section (2) of Section

420 of the Companies Act, 2013.

Company Appeal (AT) (Insolvency) No. 702 of 2019 -3-

6. Learned counsel appearing on behalf of the Appellant referred to

Section 424 of the Companies Act, 2013 which mandates the National

Company Law Tribunal to pass orders following principles of natural

justice.

7. This Appellate Tribunal in "M/s. Innoventive Industries Ltd. v.

ICICI Bank & Anr.─ Company Appeal (AT) (Insolvency) No.s. 1 & 2 of

2017" has already held that before admission of an application under

Sections 7, 9 or 10, limited notice should be given to the 'Corporate

Debtor'. Therefore, it is needless to say that the Adjudicating Authority

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

passing any order under Section 7 of the 'I&B Code'.

8. However, it is not in dispute that the Adjudicating Authority issued

notice on the 'Corporate Debtor' which was served. In spite of service of

notice, the 'Corporate Debtor' had not appeared and thereafter, the

Adjudicating Authority had no option but to proceed on merit and pass

order which was passed on 8th March, 2019.

9. The only plea taken by the Appellant is that the Appellant has not

received any notice as there was a dispute between the landlord with the

'Corporate Debtor' with regard to office of the 'Corporate Debtor', but such

ground cannot be accepted for recall of the order dated 8th March, 2019.

Company Appeal (AT) (Insolvency) No. 702 of 2019 -4-

10. We asked learned counsel for the Appellant to address this

Appellate Tribunal as to what stand the 'Corporate Debtor' could have

taken before the Adjudicating Authority prior to admission of the

application under Section 7 of the 'I&B Code'. However, pursuant to the

said question it is accepted that there is debt and default and the

'Corporate Debtor' is not in a position to settle the claim. In that view of

the matter, any opportunity to the 'Corporate Debtor' will be a futile

exercise and we are not inclined to interfere with the impugned order

dated 7th June, 2019.

11. However, taking into consideration the fact and circumstances of

the case, we are of the view that it is not a fit case to impose costs on the

'Corporate Debtor' having taken over by the 'Interim Resolution

Professional'. The part of the impugned order dated 7th June, 2019

imposing cost of Rs. 25,000/- is set aside. The rest part of the impugned

order is affirmed.

The appeal stands disposed of.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice A.I.S. Cheema) Member(Judicial)

(Kanthi Narahari) Member(Technical) Ar/g Company Appeal (AT) (Insolvency) No. 702 of 2019