Logix City Developers Pvt. Ltd vs Netambit Home Options Pvt. Ltd
- CitationCompany Appeal (AT) (Insolvency) No. 827 of 2019
Ratio decidendi
The rule this decision rests on
Where the Adjudicating Authority proceeds to determine a Section 9 application on merits, the Corporate Debtor is entitled at least to an oral hearing before the application is decided, so that it can be heard on whether a debt is payable in law or in fact and whether a dispute exists. A written submission filed by the Corporate Debtor before the Adjudicating Authority must be taken on record and considered by it in determining the application. Compliance with a condition of costs imposed as a condition for setting aside an ex-parte order may be enforced by declining to receive a reply-affidavit from the defaulting party, and such non-compliance does not dispense with the Adjudicating Authority's duty to consider the written submissions already on record.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Company Appeal (AT) (Insolvency) No. 827 of 2019
IN THE MATTER OF:
Logix City Developers Pvt. Ltd. ...Appellant
Versus
Netambit Home Options Pvt. Ltd. ...Respondent
Present: For Appellant : Mr. Nitish K. Sharma, Advocate
ORDER
19.08.2019 The Appellant (Corporate Debtor) has preferred this appeal
against order dated 7th August, 2019 passed by the Adjudicating Authority
(National Company Law Tribunal), New Delhi Court-III, which reads as follows:
"Learned AR for the petitioner is present. It is
brought to the notice of this Tribunal that vide Order
dated 06.03.2019 the Corporate Debtor was set ex-
parte and on 03.07.2019, cost of Rs. 10,000/- was
imposed and the same should have been paid within 7
days from the date of said order. However, it is
represented by Ld. AR for the petitioner that the said
order has not been complied as a condition precedent
for ex-parte order being set aside.
Taking into consideration the above, we are not
in a position to consider the reply as filed by the 2
Corporate Debtor. In the circumstances, the Order
dated 06.03.2019 stands restored.
Heard the petitioner. Order is reserved."
2. The case of the Appellant is that the Respondent - 'Netamabit Home
Options (P) Ltd.' filed an application under Section 9 of the 'I&B Code' against
the Appellant - 'Logix City Developers (P) Ltd.' (Corporate Debtor). On 6th March,
2019 when the matter was taken up, the Adjudicating Authority passed the
following order :
"The corporate debtor has been duly served.
None is present on behalf of the corporate debtor. They
are, therefore, proceeded ex-parte.
To come for arguments on 01.04.2019."
3. The Appellant (Corporate Debtor), thereafter appeared and filed an
application for recall of the order dated 6th March, 2019 which was allowed by
order dated 3rd July, 2019 subject to payment of cost of Rs.10,000/-, as quoted
below:
"Learned AR for the petitioner and Ld.
Counsel for the Corporate Debtor are present.
Application in CA No. 220/2019 has been filed
seeking to set aside the ex-parte Order dated
06.3.2019 due to non-appearance of the
Corporate Debtor despite notice. However, in
order to decide the case on merits, we set aside
the ex-parte order and allow the Corporate
Debtor to file reply in the case in the interest of
Company Appeal (AT) (Insolvency) No. 827 of 2019 3
justice, hence, this application stands allowed,
however, subject to payment of cost of Rs.
10,000/- to Ld. AR of the Non-
applicant/petitioner within 7 days from today. It
is brought to the notice by Ld. Counsel for the
Corporate Debtor that reply has been filed on
10.06.2019. Hence, subject to the payment of
above cost, reply will be taken on record.
Post the matter on 07.08.2019 for
reporting compliance and enquiry."
4. In spite of the order passed by the Adjudicating Authority, the Appellant
(Corporate Debtor) failed to pay cost of Rs. 10,000/- and, therefore, the said
order was recalled by the impugned order dated 7th August, 2019, as quoted
above.
5. From the impugned order we find that the case was heard ex-parte and
the order was reserved. We are of the view that at least oral hearing should have
been given to the 'Corporate Debtor' to find out as to whether a 'debt' is payable
in law or in fact or whether there is an 'existence of dispute'. However, it is
informed that the Appellant has filed a written submissions before the
Adjudicating Authority. Therefore, instead of giving notice to the Respondent
and deciding the case on merit, we direct the Adjudicating Authority that it
should take written submission on record filed by the Appellant and consider it.
The Appellant may file reply-affidavit subject to payment of cost of Rs. 10,000/-
by 21st August, 2019. However, if no cost is paid, no such opportunity of reply-
affidavit is required to be given to the Appellant.
Company Appeal (AT) (Insolvency) No. 827 of 2019 4
6. However, if order of admission is passed in the meantime, it will be open
to the Appellant to challenge the same.
The appeal stands disposed of with aforesaid observations. No costs.
[Justice S.J. Mukhopadhaya] Chairperson
[ Justice A.I.S. Cheema ] Member (Judicial)
[ Kanthi Narahari ] Member (Technical) /ns/gc
Company Appeal (AT) (Insolvency) No. 827 of 2019
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