Iqbal Singh vs Rakesh Kumar Gupta
- CitationCompany Appeal (AT) (Insolvency) No. 110 of 2025
Ratio decidendi
The rule this decision rests on
Where the Adjudicating Authority permits substituted service by newspaper publication, that publication must be made in a region where the party is known to reside or where it is reasonably likely to bring the notice to his attention; publication in a region unconnected with the party's address, as shown on the face of the application, does not constitute effective service. Where a party has not been effectively served and an order is passed ex parte against him on the strength of a defective affidavit of service, that order cannot be sustained and is liable to be set aside and remitted to the Adjudicating Authority for fresh consideration, with an opportunity to file a reply.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Iqbal Singh & Anr. ...Appellants
Versus
Rakesh Kumar Gupta, (Liquidator of Namdhari Food International Pvt. Ltd.) ...Respondent
Present: For Appellant : Mr. Himanshu Gupta, Ms. Yaganshi Singh and Mr. Rohan S. Nandy, Advocates
For Respondent : Mr. Abhishek Anand, Mr. Karan Kohli and Ms. Palak Kalra, Advocates for RP.
ORDER
(Hybrid Mode)
28.04.2025 I.A. No. 2528 of 2025 This is an application praying to
take on record the amended memo of the Appeal by deleting the name of
Appellant No.1 from the array of parties. Amended memo is taken on record.
Let, the memo of appeal be amended accordingly.
I.A. No. 496 of 2025 This is an application praying for condonation of 9
days delay in filing the Appeal. We find sufficient cause has been shown in
paragraphs 2(ii), (iii), (iv) and (v) for condonation of 9 days delay. Delay is
condoned.
Heard Learned Counsel for the Appellant as well as Mr. Abhishek
Anand appearing for the Respondent.
This Appeal have been filed against the order passed by Adjudicating
Authority dated 29.11.2024 allowing an application under Section 43 and 66 filed against the Appellant. Adjudicating Authority by the impugned order has
allowed the application. Aggrieved by the said order, the appeal has been filed.
Learned Counsel for the Appellant submits that Appellants were not
served any notices in the application which was filed by the Liquidator.
Notices issued were not served, hence the Adjudicating Authority directed for
substituted service and the substituted service was made in a newspaper in
Delhi region, whereas in the application itself the address of the Appellant
was at Shri Jiwan Nagar, District Sirssa, Haryana.
It is submitted that service by publication cannot be accepted. However,
Adjudicating Authority relying on the affidavit of service filed by the Liquidator
proceeded to hear the application and passed order on merit. It is submitted
that Appellant has also filed an application to recall the order to proceed ex-
parte which was rejected on the ground that there was no prayer for
condonation of delay and the application was filed beyond 30 days.
Application to recall the said order 15(10) remain pending on the date when
order was passed.
Sh. Abhishek Anand, Learned Counsel appearing for the respondent
submitted that Appellant were aware of the proceeding and they did not
appear before the Adjudicating Authority when the matter was heard nor
brought any reply.
We have considered submission of Counsel for the parties and perused
the record.
Company Appeal (AT) (Insolvency) No. 110 of 2025 2 of 4 In the I.A. No. 1262 of 2024 which was filed by the Liquidator. Following
order was passed on 09.04.2024:
"IA-1262/2024 Ld. Proxy Counsel appearing on behalf of the Liquidator has submitted that notices could not be served to the Respondent and therefore seeks permission to publish the notice in two local newspapers in Daily edition. Permission Granted.
The Application is directed to take necessary steps for publication and file proof and affidavit of service within two weeks.
The Respondents are directed to file reply, if any, within one week after the publication of notice.
List the matter on 08.05.2024."
In pursuance of the order of the NCLT dated 09.04.2024, publication
was made in the newspaper an affidavit of service dated 08.05.2024. In the
affidavit of service in paragraph 3 was following:
"3. That, accordingly, the deponent issued notice by way of substituted service upon the Respondents through newspaper publications in Financial Express (English Edition), Jansatta (Hindi Edition), in New Delhi region on 13.04.2024. The details of service are as following:
Respondent Service Mode Service report Mr. Iqbal Singh Member of By newspaper Served on Suspended Board of Directors publication on 13.04.2024 of Namdhari Food International 13.04.2024. Private Limited Sri Jiwan Nagar, District Sirsa, Haryana - 125075 (Respondent No.1)
Mr. Surjit Singh Member of By newspaper Served on Suspended Board of Directors publication on 13.04.2024" of Namdhari Food International 13.04.2024 Private Limited Sri Jiwan Nagar, District - Sirsa, Haryana - 125075 (Respondent No.2)
Company Appeal (AT) (Insolvency) No. 110 of 2025 3 of 4
When we look into the affidavit of service, it is clear that publication
was made in New Delhi region in the newspaper, whereas according to own
case of the Liquidator address of the Applicant was Sirssa, State of Haryana,
which is reflected from the memo of parties of the application itself.
Admittedly, the order has been passed ex-parte against the appellant
and we are satisfied that present is a case where no appropriate service was
effected on the Appellant. Hence, the order impugned allowing the application
in I.A. No. 1262/2024 cannot be sustained.
In result, we allow the appeal, set aside the order dated 29.11.2024
passed in I.A. No. 1262/2024 is revived before the Adjudicating Authority for
fresh consideration. We allow the Appellant three weeks time to file a Reply to
the application. The Adjudicating Authority may proceed to hear the
application and decide in accordance with law. We make it clear that we are
not expressing an opinion on merits of the application it is for the Adjudicating
Authority to consider and take appropriate decision accordingly.
The Appeal is disposed of.
[Justice Ashok Bhushan] Chairperson
[Barun Mitra] Member (Technical)
[Arun Baroka] Member (Technical) pks/md
Company Appeal (AT) (Insolvency) No. 110 of 2025 4 of 4
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