Jammu Paper Pvt. Ltd vs Shiv Pooja Traders

Jammu Paper Pvt. Ltd. . ..Appellant

Versus

Shiv Pooja Traders ...Respondent

Present:

For Appellant: Shri Arun Kathpalia, Senior Advocate assisted by Shri Jayant Mehta, Shri Atul Sharma, Shri Nitesh Jam, Ms. Arveena Sharma and Shri Shubhankar, Advocates

For Respondent: Shri Nonu Khera, Advocate

ORDER

04.09.2017 Both the appeals have been preferred by the appellant

against order(s) dated 10th July, 2017 and 21st July, 2017 passed by the

Adjudicating Authority (National Company Law Tribunal), Chandigarh

Bench, Chandigarh. By the order dated 10th July, 2017, the learned

Adjudicating Authority admitted the application preferred by respondent -

'Operational Creditor' under Section 9 of the Insolvency and Bankruptcy

Code, 2016 (hereinafter referred to as the 'I&B Code') declared moratorium

and requested the Insolvency and Bankruptcy Board of India to recommend

the name of the Insolvency Resolution Professional. By the subsequent order

dated 21st July, 2017, the learned Adjudicating Authority appointed the Interim Resolution Professional and directed to prepare a list of inventory

assets of the 'Corporate Debtor' etc. in terms of the provisions of the I & B

Code.

2. Learned counsel for the appellant submits that both the impugned

order(s) dated 10th July and 21st July, 2017 have been passed without

serving any notice on the appellant -'Corporate Debtor'. He further submits

that the respondent - 'Operational Creditor' also not given any notice to the

appellant under Rule 4(3) of the Insolvency and Bankruptcy (Application to

Adjudicating Authority), Rules 2016. It is further stated that the parties have

settled the dispute and the amount has already been paid to the 'Operational

Creditor'.

3. On notice the respondent -'Operational Creditor' has appeared.

4. Learned counsel for the respondent accepts that the matter has been

settled and the amount has been paid. He further submits that because of

wrong address of the appellant the notice under Rule 4(3) could not be

served. The respondent has made the following statement in its reply: 0

9. That later after the above mentioned meeting the

appellant also apprised the deponent of the fact that the appellant

has not received any demand notice in Form-4 and the address

mentioned in the track report as well as the postal receipt of the

same is "SIDGO I/Complex, Bari Brahmnia" whereas the correct

address of the appellant is "SIDCO I/Complex, Phase-lI, Ban

Brahmna, Samba" as mentioned in the Form-4 also, and pursuant

to which the deponent also noticed that various track reports as

well as the postal receipts show the address of the appellant written as "SODCP I/Complex, Bari Brahmna: and the deponent

does not deny that there is a possibility that the address therein

on some of the postal envelops could have been inadvertently

written as "SIDCO 1/ Complex, Bari Brahmna" instead of "SIDCO

I/Complex, Phase-II, Bari Brahmna, Samba", due to which the

possibility that Appellant might not have been duly served with

Form-4 or with the copy of Petition cannot be denied."

5. From both the impugned order(s), we find that no appearance has been

recorded on behalf of the 'Corporate Debtor'. There is nothing on record to

suggest that the Tribunal has issued any notice to the appellant before

admission of the application nor anything on record to suggest that the copy

of the impugned order dated 10th July, 2017 was served on appellant prior

to 21st July, 2017.

6. Learned counsel for the appellant submits that the said order was

served after appointment of Interim Resolution Professional (IRP) i.e. on 21St

July, 2017.

7. From the statement made by the parties and record as we find that the

impugned order(s) dated 10th July and 21St July, 2017 have been passed by

the learned Adjudicating Authority in violation of the rules of natural justice

and against the decision of the Appellate Tribunal in Innoventive Industries

Ltd. vs. ICICI Bank and another, [Company Appeal (AT) (Insolvency) No.

1 and 2 of 201 71, we set aside both the impugned order(s) dated 10th July,

2017 and 21St July, 2017 and direct the Adjudicating Authority to close the

petition under Section 9 of the Companies Act, in absence of any claim.

8. In the result, the appointment of Interim Resolution Professional, order

declaring moratorium, freezing of account and all other order(s) passed by

the Adjudicating Authority pursuant to impugned order(s) and action taken

by the Interim Resolution Professional including the advertisement

published in the newspaper calling for applications are declared illegal. The

appellant is released from the rigour of law and allow the appellant company

to function independently through its Board of Directors with immediate

effect.

7. Learned Adjudicating Authority will now determine the fee of Interim

Resolution Professional and the appellant will pay the fees of the Interim

Resolution Professional for the period he has worked.

8. Both the appeals stand disposed of with the aforesaid observation and

direction. However, in the facts and circumstances of the case, there shall be

no order as to cost.

[Justice S.J. Mukhopadhaya] Chairperson

[Balvinder Singh I Member (Technical)