Mr. Suniel Dhandhania & Anr vs Dr. Vichitra Narayan Pathak Resolution ...

IN THE MATTER OF: Suniel Dhandhania & Anr. ...Appellant

Versus

Dr.Vichitra Narayan Pathak ...Respondents IRP/Resolution Professional for Golden Tabacco Ltd.

Present: For Appellant : Ms. Purti Gupta, Ms. Heena George, Advocates For Respondents : None

ORDER

Per- Justice Rakesh Kumar Jain (Oral)

09.08.2023 Appellants are the Members of the Suspended Board of

Directors of M/s. Golden Tobacco Ltd. (Corporate Debtor) who are aggrieved

against the order dated 23.02.2023 passed by the 'National Company Law

Tribunal, Ahmedabad Court-2 (hereinafter referred as to 'the Adjudicating

Authority') by which an application bearing Misc. Application No. 09 of 2022

in C.P. (IB) No. 268 of 2020 filed under Section 19 of the Insolvency and

Bankruptcy Code, 2016 (hereinafter referred as to 'The Code') by the IRP in

which the Adjudicating Authority issued a direction to the Suspended

Management to handover all the requisite documents/records of the

Corporate Debtor to the IRP within one-week observing that no one had

appeared on behalf of Suspended Management in spite of service of notice.

Comp. App. (AT) (Ins) No. 285 of 2023 & IA No. 1976 of 2023 2

2. Counsel for the Appellant has submitted that the application under

Section 7 of the Code was filed by M/s.Arrow Engineering Ltd. (Financial

Creditor) against the Golden Tobacco Ltd (Corporate Debtor) which was

admitted on 07.06.2022 and Vichitra Narayan Pathak was appointed as IRP.

3. It is submitted that during the pendency of the proceedings, IRP filed

an application bearing Misc. Application No. 09 of 2022 under Section 19 of

the Code in which first order was passed on 22.11.2022 to the following effect:

"Mis. A/09(AHM) 2022

Application is filed by Resolution Professional under Section 19 of IBC, 2016 against the ex-directors.

Issue Notice to Respondents Nos.1 and 2.

List on 30.11.2022"

4. It is further submitted that thereafter the case was adjourned to

30.11.2022, 22.12.2022, 19.01.2023, 25.01.2023 and finally on 23.02.2023,

the impugned order was passed which read as under:

"Mis. A/09(AHM) 2022

Applicant is filed U/s19 of IBC, 2016. Learned Counsel for the IRP

appeared. No one appeared for Suspended Managemnet inspite of

service of notice. We direct the suspended Management of the

Corporate Debtor to handover all the requisite documents/records of

the Corporate Debtor to the IRP within one week.

List for further consideration on 29.03.2023.

IA 560 of 2022, IA 597 of 2022, IA 627 of 2022 & IA 692 of 2022

Comp. App. (AT) (Ins) No. 285 of 2023 & IA No. 1976 of 2023 3

List for further consideration on 29.03.2023."

5. Counsel for the Appellant has submitted that the impugned order is

unsustainable in law because no notice was ever served upon the Appellant

of the Application No.09 of 2022 and the Adjudicating Authority has wrongly

recorded in the impugned order that no one had appeared on behalf of

Suspended Management despite service of notice.

6. Counsel for the Appellant has referred to Rule 37, 38 & 105 of the NCLT

Rules, 2016 (for short 'Rule') pertaining to notice to the opposite parties,

service of notices and processes & Issue of notice. The aforesaid Rules are

reproduced as under:

37. Notice to Opposite Party.-

(1) The Tribunal shall issue notice to the respondent to show

cause against the application or petition on a date of hearing

to be specified in the Notice. Such notice in Form No. NCLT.5

shall be accompanied by a copy of the application with

supporting documents.

(2) If the respondent does not appear on the date specified in

the notice in Form No. NCLT.5, the Tribunal, after according

reasonable opportunity to the respondent, shall forthwith

proceed ex-parte to dispose of the application.

(3) If the respondent contests to the notice received under sub-

rule (1), it may, either in person or through an authorised

representative, file a reply accompanied with an affidavit and

Comp. App. (AT) (Ins) No. 285 of 2023 & IA No. 1976 of 2023 4

along with copies of such documents on which it relies, with

an advance service to the petitioner or applicant, to the

Registry before the date of hearing and such reply and copies

of documents shall form part of the record.

38. Service of Notices and processes.-

(1) Any notice or process to be issued by the Tribunal may be

served by post or at the e-mail address as provided in the

petition or application or in the reply;

(2) The notice or process if to be served physically may be

served in any one of the following modes as may be directed

by the Tribunal; -

(a) by hand delivery through a process server or respective

authorised representative;

(b) by registered post or speed post with acknowledgment

due; or

(c) service by the party himself.

(3) Where a notice issued by the Tribunal is served by the

party himself by hand delivery, he shall file with the Registrar

or such other person duly authorised by the Registrar in this

behalf, the acknowledgment together with an affidavit of

service and in case of service by registered post or by speed

post, file with the Registrar, or such other person duly

Comp. App. (AT) (Ins) No. 285 of 2023 & IA No. 1976 of 2023 5

authorised by the Registrar in this behalf, an affidavit of

service of notice alongwith the proof of delivery.

(4) Notwithstanding anything contained in sub-rules (1) and

(2), the Tribunal may after taking into account the number of

respondents and their place of residence or work or service

could not be effected in any manner and other circumstances,

direct that notice of the petition or application shall be served

upon the respondents in any other manner, including any

manner of substituted service, as it appears to the Tribunal

just and convenient.

(5) A notice or process may also be served on an authorised

representative of the applicant or the respondent, as the case

may be, in any proceeding or on any person authorised to

accept a notice or a process, and such service on the

authorised representative shall be deemed to be a proper

service.

(6) Where the Tribunal directs a service under sub-rule (4),

such amount of charges, as may be determined by the

Tribunal from time to time, but not exceeding the actual

charges incurred in effecting the service, shall be deposited

with the registry of the Tribunal by the petitioner or applicant.

105. Issue of notice.--

Comp. App. (AT) (Ins) No. 285 of 2023 & IA No. 1976 of 2023 6

(1) Where notice of an appeal or petition for caveat or

interlocutory application is issued by the Tribunal, copies of

the same, the affidavit in support thereof and if so ordered by

the Tribunal, the copy of other documents filed therewith, if

any, shall be served along with the notice on the other side.

(2) The aforesaid copies shall show the date of presentation

of the appeal or petition for caveat or interlocutory application

and the name of the authorised representative, if any, of such

party with his full address for service and the interim order,

if any, made thereon.

(3) The Tribunal may order for issuing notice in appropriate

cases and also permit the party concerned for service of the

said notice on the other side by Dasti and in such case, deliver

the notice to such party and it is for such party to file affidavit

of service with proof.

(4) Acknowledgement under sub-rule (3) shall be filed by the

party with the Registry before the date fixed for return of

notice"

7. Since no one appeared on behalf of the Respondent to contest this

appeal, therefore, counsel for the Appellant herself referred to an email dated

22.11.2022 as per which information was given regarding the listing of the

Comp. App. (AT) (Ins) No. 285 of 2023 & IA No. 1976 of 2023 7

application for the first time on 22.11.2022. The email dated 22.11.2022 is

reproduced as under:

8. Counsel for the Appellant has submitted that notice of any Interlocutory

Application is required to be issued in terms of Rule 37 & 38 of the Rules

coupled with Rule 105 as per which copy of the application has also to be

served at the time of issuance of notice, therefore, there was no notice in

accordance with law which is stated to have been served upon the Appellant

herein.

9. Counsel for the Appellant has also fairly referred to Rule 49 of the Rules,

which read as under:

"49. Ex-parte Hearing and disposal.- (1) Where on the date fixed

for hearing the petition or application or on any other date to

Comp. App. (AT) (Ins) No. 285 of 2023 & IA No. 1976 of 2023 8

which such hearing may be adjourned, the applicant appears

and the respondent does not appear when the petition or the

application is called for hearing, the Tribunal may adjourn the

hearing or hear and decide the petition or the application ex-

parte.

(2) Where a petition or an application has been heard ex-parte

against a respondent or respondents, such respondent or

respondents may apply to the Tribunal for an order to set it aside

and if such respondent or respondents satisfies the Tribunal that

the notice was not duly served, or that he or they were prevented

by any sufficient cause from appearing (when the petition or the

application was called) for hearing, the Tribunal may make an

order setting aside the ex-parte hearing as against him or them

upon such terms as it thinks fit.

Provided that where the ex-parte hearing of the petition or

application is of such nature that it cannot be set aside as against

one respondent only, it may be set aside as against all or any of

the other respondents also."

10. As per the aforesaid Rules, in case, the Appellant being the Respondent

in the application who was proceeded against ex parte, could have filed an

application before the same court for setting aside the impugned order by

recalling the same but no such effort was made at that time rather the present

appeal has been filed.

Comp. App. (AT) (Ins) No. 285 of 2023 & IA No. 1976 of 2023 9

11. After hearing counsel for the Appellant, we are of the considered opinion

that it would be just and expedient if an application is filed by the Appellant

in terms of Rule 49 of the Rules before the Adjudicating Authority who has

passed the impugned order for the purpose of recalling the same on the

ground that the Appellant was never served with the notice of the court and

the email was only computer generated, therefore, it does not fall within the

ambit of due notice as required by the Rules.

12. Consequently, the present appeal is hereby disposed of, without

commenting on the merits of the case and liberty is extended to the Appellant

to file an appropriate application, in terms of Rule 49 of the Rules, for recalling

the impugned order.

13. In case, any such application is filed by the Appellant before the

Adjudicating Authority, the same shall be considered by the Adjudicating

Authority and be disposed off by passing a speaking order after giving notice

to the opposite party. The Appellant shall appear before the Adjudicating

Authority on 25th August, 2023 for the purpose of filing the application. If any,

such application is filed, the Adjudicating Authority shall make all endeavours

to decide the same expeditiously but preferably within a period of 15 days

thereafter by passing a speaking order.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Naresh Salecha] Member (Technical) Raushan/Kam.

Comp. App. (AT) (Ins) No. 285 of 2023 & IA No. 1976 of 2023