Mindtree Exports Private Limited vs Mis. Ashmita Multitrade Private ...

Mindtree Exports Private Limited Appellant

Versus

MIs. Ashmita Multitrade Private Limited & Anr. Respondents

Present: For Appellant: Shri P. Nagesh and Shri Karan Gandhi, Advocates

For Respondents: Shri Bakul ain, Advocate

ORDER

31.07.2017 The respondent company claimed to be 'Financial

Creditor' as defined under Section 5(7) of the Insolvency and

Bankruptcy Code, 2016 (hereinafter referr d to as 'I&B Code') and

filed an application under Section 7 of t e I&B Code to initiate

Corporate Insolvency Resolution Process against the appellant-

'Corporate Debtor'. Learned Adjudicati g Authority (National

Company Law Tribunal), Mumbai Benc Mumbai (hereinafter

referred to 'Adjudicating Authority') by the order dated 13th June,

2017 in Company Petition No. 1073/I&BP NCLT/MB/MAH/20 17,

admitted the application, declared 'Morato ium' under Section 14

of the I&B Code, appointed an Interim Resi lution Professional and passed prohibitory orders. The said order is under challenge in the

present appeal.

2. From the record, we find that the respondent initially claimed

to be an 'Operational Creditor' and preferred an application under

Section 9 of the MB Code in Form-5 of the Insolvency and

Bankruptcy (Application to Adjudicating Authority) Rules, 2016

(hereinafter referred to as 'Adjudicating Authority Rules') on 4th

April, 2017. However, the same was withdrawn and thereafter a

separate application under Section 7 of I&B Code was filed in

Form-i claiming to be 'Financial Creditor', which was registered as

Company Petition No. 1073/I&BP/NCLT/MB/MAH/2017 and was

admitted by impugned order dated 13th June, 2017.

3. It is not necessary to record all the facts as has been advanced

by the parties, except the relevant one for disposal of this appeal.

4. Admittedly, the impugned order dated 13th June, 2017 has

been passed by the Learned Adjudicating Authority without issuing

notice to the respondent/appellant-'Corporate Debtor'. The order

sheet also shows that nobody appeared on behalf of the 'Corporate

Debtor'. Apart from this, according to the appellant/ respondent,

no notice under Rule 4(3) of the Adjudicating Authority Rules was served after filing of the application under Section 7 of the I&B

Code. The appellant had no knowledge of the application and, so,

the appellant could not oppose the prayer. It is stated that the

amount, as claimed to be due to the respondents, has already been

paid.

5. Learned counsel for the respondents/ 'Financial Creditors'

has not disputed the fact that the impugned order was passed ex-

parte without hearing the appellant on 13th June, 2017. Learned

Adjudicating Authority in the impugned order though recorded that

the 'Financial Creditor' has sent a notice on 15th February, 2017, to

the 'Corporate Debtor' demanding a sum of Rs. 5,37,00,000/-

(Rupees Five Crores Thirty Seven Lakhs only), but failed to

appreciate whether any notice was actually served on the

'Corporate Debtor' or not.

6. There is nothing on record to suggest that any notice was

issued under Rule 4(3) of the Adjudicating Authority Rules, which

provides for serving a copy of the application under Section 7,

mentioning the date of hearing before the Adjudicating Authority.

Learned Adjudicating Authority also failed to consider whether the

respondents/ petitioners come within the meaning of 'Financial -4-

Creditors' or not as they earlier claimed to be 'Operational

Creditors'.

7. For the reasons aforesaid, we set aside the impugned order

dated 13th June, 2017 passed by the Learned Adjudicating

Authority, Mumbai Bench, Mumbai in Company Petition No. 1073/

I&BP/NCLT/MB/MAH/2017 and remit the matter to Learned

Adjudicating Authority (National Company Law Tribunal), Mumbai

Bench, Mumbai to decide the question as raised and noticed above.

8. In the result, the order declaring 'Moratorium', seizure of all

the bank accounts, payment to Interim Resolution Professional and

other rigorous orders passed against the appellant-'Corporate

Debtor' are set aside. The 'Corporate Debtor' is allowed to function

through its Board of Directors till the Learned Adjudicating

Authority decides the matter alter notice and hearing the parties.

9. We make it clear that we have not decided the question as

raised above, which are required to be decided by the Learned

Adjudicating Authority at the first instance; Learned Adjudicating

Authority will fix the date of hearing and, after notice to the parties,

will decide the application afresh.

-5-

10. The appeal is allowed with the aforesaid observations and

directions. However, in the facts and circumstances of the case,

the parties will bear their own cost.

[Justice S.J. Mukhopadhaya] Chairperson

[Balvinder Singh] Member (Technical]

/ng/