M/S. Kee Projects Ltd vs Sharda Rawat
- CitationCompany Appeal (AT) (Insolvency) No. 139 of 2017
Ratio decidendi
The rule this decision rests on
The Adjudicating Authority is bound to issue a limited notice to the corporate debtor before admitting an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, for the purpose of ascertaining the existence of default and whether the application is complete or has any other defect; adherence to the principles of natural justice does not, however, require a full reasonable opportunity of hearing to the corporate debtor before the admission order is passed.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
M/s. Kee Projects Ltd. ... Appellant
Versus
Sharda Rawat ... Respondent
Present: For Appellant: Dr. Anurag Kumar Agarwal and Shri Umesh Mishra, Advocates
For Respondent: Shri Rakesh Mukhija, Advocate
ORDER
01.09.2017 The appellant has preferred this appeal against
judgement dated 6th July, 2017 passed by the Learned Adjudicating
Authority (National Company Law Tribunal), Principal Bench, New Delhi
(hereinafter referred to as 'Adjudicating Authority') in CO.PET.
No.662/2016. By the impugned order; learned Adjudicating Authority,
on a transfer petition of winding-up under Section 439 read with Section
443 read with Section 433(e) read with Section 434 of the Companies
Act, 1956, treated the application preferred by the respondent as an
application under Section 9 of the Insolvency and Bankruptcy Code,
2016 (hereinafter referred to as 'I&B Code') pursuant to the Central
Government Notification No. G.S.R. 1119(E) dated 7th December, 2016
and admitted the application.
2
2. The main grievance of the appellant is that the impugned order
has been passed in violation of the rules of natural justice without notice
to the appellant. Learned counsel for the appellant further submits
that the matter has also been settled with the respondent-'Operational
Creditor' (Sharda Rawat) and part payment of Rs.9,2 1,6 19/- (Rupees
Nine Lakhs Twenty One Thousand Six Hundred and Nineteen only) has
been made by a draft bearing No. 020489 dated 19th August, 2017
drawn on HDFC Bank, Meera Bagh, Outer Ring Road Branch, New
Delhi.
3. Shri Rakesh Mukhija, learned counsel appearing for the
respondent accepts that the impugned order was passed without notice
to the appellant-'Corporate Debtor'. From the judgement also, while we
find that the names of the advocates appearing on behalf of 'Operational
Creditor' have been recorded, no appearance has been shown on behalf
of the 'Corporate Debtor'.
4. In "Innoventive Industries Ltd. Vs. ICICI Bank & Anr."
[Company Appeal (AT) (Insolvency) Nos. 1 & 2 of 20171, the Appellate
Tribunal by judgement dated 15th May, 2017 held:
"53. In view of the discussion above, we are of
the view and hold that the Adjudicating Authority is
bound to issue a limited notice to the corporate
debtor before admitting a case for ascertainment of
existence of default based on material submitted by the corporate debtor and to find out whether the
application is complete and or there is any other
defect required to be removed. Adherence to
Principles of natural justice would not mean that in
every situation the adjudicating authority is
required to afford reasonable opportunity of
hearing to the Corporate debtor before passing its
order."
5. In the circumstances, as the case of the appellant is covered by
the decision in "Innoventive industries Ltd. Vs. ICICI Bank & Anr."
and the impugned order has been passed in violation of rules of natural
justice, we set aside the impugned order.
6. The case is remitted to the learned Adjudicating Authority,
Principal Bench, New Delhi to decide the professional fee of Interim
Resolution Professional, if appointed, and if any amount is payable, will
direct the appellant to pay the same and will close the case in view of
the settlement.
The appeal is allowed with the above observations. However, in
the facts and circumstances of the case, there shall be no order as to
costs.
[Justice S.J. Mukhopadhaya] Chairperson
[Balvinder Singh Member (Technical) I
NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Company Appeal (AT) (Insolvency) No. 139 of 2017
IN THE MATTER OF:
MIs. Kee Projects Ltd. ... Appellant
Versus
Sharda Rawat ... Respondent
Present: For Appellant : Dr. Anurag Kumar Agarwal and Shri Umesh Mishra, Advocates
For Respondent: Shri Rakesh Mukhija, Advocate
ORDER
01.09.2017 The appellant has preferred this appeal against
judgement dated 6th July, 2017 passed by the Learned Adjudicating
Authority (National Company Law Tribunal), Principal Bench, New Delhi
(hereinafter referred to as 'Adjudicating Authority') in CO.PET.
No.662/2016. By the impugned order, learned Adjudicating Authority,
on a transfer petition of winding-up under Section 439 read with Section
443 read with Section 433(e) read with Section 434 of the Companies
Act, 1956, treated the application preferred by the respondent as an
application under Section 9 of the Insolvency and Bankruptcy Code,
2016 (hereinafter referred to as '1&B Code') pursuant to the Central
Government Notification No. G.S.R. 1119(E) dated 7th December, 2016
and admitted the application.
2. The main grievance of the appellant is that the impugned order
has been passed in violation of the rules of natural justice without notice
to the appellant. Learned counsel for the appellant further submits
that the matter has also been settled with the respondent-'Operational
Creditor' (Sharda Rawat) and part payment of Rs.9,21,619/- (Rupees
Nine Lakhs Twenty One Thousand Six Hundred and Nineteen only) has
been made by a drft bearing No. 020489 dated 19th August, 2017
drawn on HDFC Bank, Meera Bagh, Outer Ring Road Branch, New
Delhi.
3. Shri Rakesh Mukhija, learned counsel appearing for the
respondent accepts that the impugned order was passed without notice
to the appellant-'Corporate Debtor'. From the judgement also, while we
find that the names of the advocates appearing on behalf of 'Operational
Creditor' have been recorded, no appearance has been shown on behalf
of the 'Corporate Debtor'.
4. In "Innoventive Industries Ltd. Vs. ICICI Bank & Anr."-
[Company Appeal (AT) (Insolvency) Nos. 1 & 2 of 2017], the Appellate
Tribunal by judgement dated 15th May, 2017 held:
or"53. In view of the discussion above, we are of
the view and hold that the Adjudicating Authority is
bound to issue a limited notice to the corporate
debtor before admitting a case for ascertainment of
existence of default based on material submitted by 3
the corporate debtor and to find out whether the
application is complete and or there is any other
defect required to be removed. Adherence to
Principles of natural justice would not mean that in
every situation the adjudicating authority is
required to afford reasonable opportunity of
hearing to the Corporate debtor before passing its
order."
5. In the circumstances, as the case of the appellant is covered by
the decision in "Innoventive Industries Ltd. Vs. ICICI Bank & Ann"
and the impugned order has been passed in violation of rules of natural
justice, we set aside the impugned order.
6. The case is remitted to the learned Adjudicating Authority,
Principal Bench, New Delhi to decide the professional fee of Interim
Resolution Professional, if appointed, and if any amount is payable, will
direct the appellant to pay the same and will close the case in view of
the settlement.
The appeal is allowed with the above observations. However, in
the facts and circumstances of the case, there shall be no order as to
costs.
[Justice S.J. Mukhopadhaya] Chairperson
[Balvinder Singh] Member (Technical) / ng/
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