Mr. Hardik S/O Ravi Jaiswal vs Mr. Ramdeo R. Agarwal And Another

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI Comp. App. (AT) (Ins) No. 1295 of 2023 IN THE MATTER OF: Hardik ...Appellant Versus Ramdeo R. Agarwal & Anr. ...Respondents Present: For Appellants : Mr. Amit R Agarwal, Adv. For Respondent : Mr. Bharat Gupta, Varun Tyagi, Vishesh Chouhan, Ishan Srivastava, Adv. for R1 Mr. Abhishek Bhardwaj, Deepanshu Mathpal, Adv. for R2 JUDGMENT

Per: Justice Rakesh Kumar Jain:

This appeal is filed by the Suspended Director of the Corporate Debtor,

namely, Harkar Developers Pvt. Ltd. under Section 61 of the Insolvency and

Bankruptcy Code, 2016 (in short 'Code') against the order dated 18.07.2023

passed in CP (IB) No. 162/MB/C-IV/NCLT/IBC/Sec 9/2021 by the NCLT,

Court IV, Mumbai (in short 'the Tribunal') admitting the application filed

under Section 9 of the Code by Mr. Ramdeo R. Agarwal/Operational Creditor

for the total amount of Rs. 1,89,57,920/- and appointed Mr. Amit

Chandrashekhar Poddar as the Interim Resolution Professional (IRP).

2. The facts captured by the Tribunal in the impugned order are that

the OC / Respondent No. 1 filed the Company Petition under Section 9 on

10.02.2021 in which the total amount claimed as on 15.12.2020 was Rs.

1,89,57,920/-. The OC had specifically mentioned the date of default as

27.02.2018. It is alleged that the CD had approached M/s Agarwal Coal 2

Depot, which is the proprietorship firm of Respondent No. 1 for supply of

coal. It is alleged that M/s Agarwal Coal Depot supplied the coal to the CD

from financial year 2015-16 till the month of March, 2018 and raised the

invoices. The last payment was made by the CD on 26.02.2018 to the tune

of Rs. 18,10,737/- and the CD made default in making payments amounting

to Rs. 1,12,67,715/- claimed on the basis of the invoices raised till

10.03.2018.

3. The OC sent a demand notice in form No. 3 on 22.12.2020 to the CD at

the registered office of the CD, vide email on the registered email address of

the CD and also to the directors of the CD. The demand notice sent by RPAD

to the CD was returned undelivered with remark Insufficient Address but the

demand notice sent through email was received by the CD on 12.01.2021,

therefore, it was alleged to have been duly served. The copies of the demand

notice sent to the registered addresses of the directors of the CD were also

duly delivered to 2 out of total 3 directors and copy sent to the third director

was returned with the remark 'address cannot be located'.

4. The Tribunal has observed that the matter was listed on 10.03.2021

and notice was issued to the CD. Thereafter on 02.08.2021 the OC was

directed to issue personal notice to the CD. On 22.10.2021 the OC informed

the Court that the personal notice has been returned undelivered with an

endorsement 'addressee left', therefore, the OC was directed to serve the CD

through substituted services by way of publication which is alleged to have

been completed on 17.12.2021. Since, no one appeared despite substituted

services also, therefore, the CD was proceeded against ex-parte on 3

24.12.2021 and after hearing the OC exparte, the Court made the following

observation in para 4 of the impugned order "4. The Operational Creditor

has placed on record the copy of GST returns and TCS returns to prove the

supply of goods to the Corporate Debtor. In the absence of any response from

the Corporate Debtor, the matter placed on record shows that there exists

debt and default in payment thereof. The petition filed is also within

limitation. Thus, the present Company Petition satisfies all the necessary

requirement for admission. This Tribunal has jurisdiction to adjudicate the

Company Petition filed by the Operational Creditor."

5. The Tribunal thus admitted the application by way of impugned order

and appointed the IRP besides imposing the moratorium under Section 14

of the Code.

6. Aggrieved against this order, the present appeal has been preferred.

7. Counsel for the Appellant has submitted that statutory notice under

Section 8 of the Code dated 22.12.2020 was never served. It is further

submitted that even the said notice dated 22.12.2020, if received by the

Appellant, was only issued to the directors of the CD in their individual

capacity. It is further submitted that the statutory notice was served upon

the email address of the erstwhile company secretary of CD on 12.01.2021

but it was disputed that hardik.jaiswal117@gmail.com happened to be the

email address of the Appellant. It is also submitted that the Appellant has

wrongly been proceeded ex-parte by the Tribunal. It is further submitted that

the Tribunal has committed an error in recording the finding in para 4 of the

impugned order.

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8. On the other hand, Counsel for Respondent No. 1 has submitted that

the Appellant has not come to the Court with clean hand and has been

playing hide and seek since the beginning. In this regard, it is submitted

that the Respondent had been selling coal to the CD since 2016-17 and had

continued to sell coal to CD till 10.03.2018. It was agreed between the

parties that the goods were to be supplied by OC directly to Anand Distilleries

Pvt. Ltd. (ADPL) and invoice were to be raised by OC on CD and the CD

used to raise invoice on ADPL. It is further submitted that part payments

were received sometimes by OC from the CD and sometimes on instructions

of CD, ADPL also made direct payments to OC and the said amount was duly

credited by OC in the account of CD but sum of Rs. 1,12,67,715/- remained

outstanding apart from the agreed interest @ 24% i.e. Rs. 76,90,205/-. It is

further submitted that demand notice dated 22.12.2020 was issued by the

OC to the CD and sent to its directors by post and email. In this regard,

he has referred to the postal receipts attached with reply alongwith tracking

reports but no response was received to the statutory demand notice issued

under Section 8 of the Code. It is further submitted that the application

under Section 9 was filed on 10.02.2021 but despite service of the notice,

the CD did not choose to appear, therefore, the Tribunal had to pass the

order of substituted service. The said order dated 24.12.2021 is reproduced

as under:-

"1. Mr. Harsh Kesharia, Ld. Counsel for the Petitioner present. No representation on the part of the Respondent.

2. This matter first came up for hearing on 10.03.2021 and thereafter on 02.08.2021 & 09.09.2021. On the last date of hearing i.e. on 22.10.2021, the Petitioner was directed to take 5

out substituted service by way of publication in two daily leading newspapers. Counsel for the Petitioner submits that the paper publication was carried out in 'Hitvada' in English and 'Deshunnati' in Marathi vide circulation at Nagpur on 17.12.2021.

3. Today even after the matter called twice no representation on the part of the Respondent. Respondent is set exparte.

4. List this matter on 14.03.2022 for final hearing."

9. It is further submitted that the Appellant is guilty of suppressing the

fact and making false suggestion because the CD, through the present

appellant, filed an application dated 20.06.2022 (Annexure R2) seeking to

set aside the exparte order but the application was not pursued. It is also

submitted that in the said application it has been admitted by the CD that

"Respondent/CD has received the demand notice from the petitioner

somewhere in the month June, 2021 and the respondent has replied the

same." However, alleged reply to the notice was not filed alognwith

application filed for recall of the exparte order. Besides this, it is also

submitted that the Appellant had even appeared through his counsel on

01.11.2022. In this regard, the Tribunal has also recorded the presence.

The said order is also reproduced as under:-

10. It is further argued by Respondent that NCLT directed Respondent vide

its order dated 20.12.2022 to file documents in support of sales to CD. 6

Respondent filed affidavit with records of returns of tax collected at source

(TCS) and records of Goods and Services Tax (GST). It is alleged that all

invoices of the Respondent were charged with additional 1% TCS and said

amount of TCS was duly deposited by Respondent with Income Tax in PAN

number of the CD. Respondent also updated details of all its sales invoices

on GST portal which was never disputed or reversed by CD. It is also

submitted that the Tribunal being satisfied with records of TCS and GST,

and other documents filed on record, admitted the application filed under

Section 9 of the Code.

11. Counsel for the Respondent has further submitted that the CD

purposefully did not file the reply to the statutory notice and in spite of having

been served with the notice issued under Section 9, did not contest the

application though the Counsel for the CD had once appeared on 01.11.2022

as has been indicated in the order which has already been reproduced.

12. It is further submitted that the Tribunal has rightly recorded the finding

in para 4 of the impugned order which is the proof of claim as provided under

Regulation 7 of IBBI (Insolvency Resolution Process for Corporate Person)

Regulations, 2016.

13. We have heard Counsel for the parties and perused the record with

their able assistance.

14. The Conduct of the CD since the beginning is not above board because,

firstly, it denied to have received the statutory notice issued under Section 8

but later on it admitted to have received the same in the application filed for

setting aside the exparte order which was not even persued for the reasons 7

best known to the CD. It is alleged that reply to the said notice was filed but

the said reply was not annexed with the said application filed for recalling of

the order of ex-parte passed against the CD. Besides this, the CD made all

efforts to avoid receipt of notice issued by the Court, therefore, the Court

had to pass the order of substituted services upon CD by way of publication

in the newspaper. CD had even once appeared through his counsel, namely,

Radhe Agarwal, as has been recorded in the order dated 1.11.2022 but then

started absenting from the hearing. The CD was thus proceeded against

exparte on 24.12.2021 and it has been recorded by the Tribunal in the

impugned order that "thereafter, this matter was listed on 10 occasions and

CD never came up. The CD was never represented in any of the hearing nor

any reply was filed".

15. The very fact that the CD did not give reply to the demand notice which

was the first stage, envisaged in the Code for contesting the claim of the OC

and then did not choose to appear in court to contest the application filed

under Section 9 and even did not file the reply despite the fact that the Court

had adjourned the case many times to await the appearance of the

Respondent for completion of the pleadings and ultimately it was found that

the CD is deliberately avoiding to contest the application filed under Section

9 and hence, the Tribunal on the basis of the record of the copy of GST

returns and TCS returns which proves that the goods were supplied to the

CD, has rightly admitted the application filed under Section 9 on the ground

that there is debt and default both present in the lis which are sufficient for

the court to push the CD into insolvency by appointing the IRP. 8

16. Looking from any angle, there is hardly any merit in the present appeal

for the purpose of interference with the impugned order. Consequently, the

present appeal is hereby dismissed though without any order as to costs.

I.As, if any, pending are hereby closed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

[Mr. Indevar Pandey] Member (Technical) New Delhi 29th August, 2025 SC