Mark Splendour Nonwovens Pvt Ltd vs Dakota Chemicals India Pvt Ltd

Mark Splendour Nonwovens Pvt. Ltd. ...Appellant

Vs

Dakota Chemicals India Pvt. Ltd. ....Respondent Present: For Appellant: Mr. Anjani Kumar Singh, Advocate and Mr. Daya Singh, A.R. For Respondent: Ms. Pravati Bhatnagar, Advocate

ORDER

24.01.2020 This appeal has been filed by the Corporate Debtor against

whom an Application under Section 9 was filed by the Respondent- Operational

Creditor before the Adjudicating Authority (National Company Law Tribunal,

Jaipur Bench), Jaipur. It is stated that Section 9 Application was filed on

30.06.2018. This Appeal has been filed against the Impugned order dated

06.06.2019 passed by the Adjudicating Authority which is a short order and

reads as under:

"ORDER

This is an application filed by the Corporate Debtor seeking for

the recall and set aside the order dated 12.04.2019 and

03.05.2019 passed by this Tribunal, wherein the Corporate

Debtor under the circumstances stated therein was proceeded

exparte. Learned counsel for the applicant during the course of

submission in relation to this application points out to

paragraph No. 5 of the said application as the reason for not

Company Appeal(AT)(Insolvency) No. 714 of 2019 Page 1 of 5 appearing in the earlier hearings. Perusal of the said paragraph

shows that although the registered office of the respondent is in

Bhiwadi District Alwar, Rajasthan, since the applicant/

respondent was based in Gurgaon, he was not in a position to

receive the notice and appear before this Tribunal. Learned

counsel for the non-applicant/Operational Creditor vehemently

objects to the application being allowed on the above said

grounds. It is also pointed out by learned counsel for the

Operational Creditor that affidavit of service has also been filed

wherein, it is established that the applicant/respondent was

duly served. In addition, it is also represented by learned

counsel for the non-applicant/Operation Creditor that e-mail

service has also been affected on the Corporate Debtor and

despite being aware of the proceedings before this Tribunal, the

Corporate Debtor has not chosen to appear on early occasions.

There seems to be some merit in the contentions of the learned

counsel for the non-applicant/Operational Creditor as it is

specifically observed in the order dated 12.04.2019 as to the

circumstances under which this Tribunal was constrained to

proceed exparte as against the Corporate Debtor. This Tribunal

is not convinced by the reaso0ns put forth by the Corporate

Debtor and in the circumstances, this application stands

dismissed.

Let the matter be posted for enquiry on 05.07.2019."

Company Appeal(AT)(Insolvency) No. 714 of 2019 Page 2 of 5

2. Learned Counsel for the Appellant is giving various reasons and stating

that the Appellant was not served and thus could not appear before the

Adjudicating Authority on time and when the Appellant appeared and sought

participation, he was not allowed to file his Reply and was treated as ex parte.

3. Learned Counsel for the Respondent is referring the Reply filed by the

Respondent and Annexures attached with the Reply to show as to how various

efforts were made and the Appellant was actually served and still did not appear

and the matter was protracted.

4. When this matter had come up before this Tribunal on 15.07.2019, in view

of the submissions made, it was observed in paragraph-2 as under:

...

"2. The appellant, Corporate Debtor, moved an application for the

recall of the order dated 12.4.2019 and 3.5.2019 passed by the

Adjudicating Authority on the ground that the said order was

passed ex-parte. No notice was issued on the Corporate Debtor.

The Adjudicating Authority vide impugned order dated 6.6.2019

observed that although the registered office is at Bhiwadi District

Alwar, Rajasthan, the appellant is based in Gurgaon and he was

not in a position to receive the notice and appear before the

Tribunal. With the opposition from the Respondent, the Tribunal

refused to recall the earlier order and ordered the matter for

enquiry on 5.7.2019. Prima facie although view that Corporate

Debtor having appeared and have been allowed to file its

objections, if any, there is no occasion for making any enquiry in

Company Appeal(AT)(Insolvency) No. 714 of 2019 Page 3 of 5 the matter and thereby to delay the process. However, before

passing any final order it is desirable to hear the operational

creditor."

...

It was then directed that during pendency of Appeal, the Adjudicating

Authority will not pass an Order of Admission.

5. Under the law, an Applicant like present one, is duty bound to serve

Respondent on the Registered address of the Company and not to go in chase of

the Director at other addresses. Reasons given in Appeal like Director was

travelling and that he did not see the e-mail and others have no substance.

Going through efforts made by the Respondent as seen in the Reply and various

orders which have been attached by the Respondent with Reply, we find that the

Appellant was not diligent in appearing and participating in the proceeding

which were pending before the Adjudicating Authority.

6. At the same, we are conscious that Section 9 proceeding under IBC is a

serious matter and when the Application is stated to be still pending, nothing

would happen if the Appellant is given one opportunity to file Reply and

participate. This can be subject to payment of costs.

7. It is stated that stay order dated 15.07.2019 passed by this Tribunal was

vacated vide order of this Tribunal dated 03.01.2020. It is stated that the matter

is yet to come up before the Adjudicating Authority and Section-9 Application is

still pending.

Company Appeal(AT)(Insolvency) No. 714 of 2019 Page 4 of 5

8. We direct the parties to appear before the Adjudicating Authority on

17.02.2020. The Appellant will file reply to Section 9 Application before the

Adjudicating Authority on or before 17.02.2020 along with cost of Rs. 75,000/-

to be deposited with Registry of Adjudicating Authority. The costs deposited will

be paid to the Respondent- Dakota Chemicals India Pvt. Ltd. If on or before

17.2.2020 the Reply is not filed and/or the costs as directed is not deposited,

the Adjudicating Authority would proceed to dispose of Section-9 Application as

per law at an early date. If the costs is deposited and Reply is filed on or before

17.02.2020, the Adjudicating Authority will hear the arguments of the Appellant

(Corporate Debtor) and decide the Application under Section 9 of IBC.

8. With these directions, the present Appeal stands disposed of.

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

(Kanthi Narahari) Member(Technical)

Akc/Md.

Company Appeal(AT)(Insolvency) No. 714 of 2019 Page 5 of 5