Mrs. Nandini Chaudhary vs Canara Bank

[Arising out of Order dated 24.04.2025 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench (Court-II) in I.A. No.737 of 2025 in C.P. No. (IB) 334/ND/2024]

IN THE MATTER OF: Nandini Choudhary W/o Mr. Rahul Chaudhary, R/o 48844/24, Daryaganj, New Delhi - 110002 ...Appellant

Versus

1. Canara Bank Asset Recovery Management Branch - 1, Karol Bagh, New Delhi -110005.

2. Ms. Maya Gupta, Resolution Professional, 3585/7, Narang Colony, Tri Nagar, New Delhi, 110035. ...Respondents

Present: For Appellant: Mr. Mayank Bhargava and Mr. Rajdeep Saraf, Advocates. For Respondents: Mr. Brijesh Kumar Tamber and Mr. Prateek Kushwaha, Advocates for R-1. Mr. Sandeep Bajaj, Mr. Devansh Jain, Ms. Shrishti Jeswani, Advocates for R-2.

ORDER

Ashok Bhushan, J.

This Appeal by a Personal Guarantor has been filed challenging the

order dated 24.04.2025 passed by the Adjudicating Authority (National

Cont'd.../ 2

Company Law Tribunal), New Delhi Bench (Court-II) in I.A. No.737 of 2025

filed by the Appellant. The Adjudicating Authority by the impugned order

has rejected the I.A. No.737 of 2025. Aggrieved by which order this appeal

has been filed.

2. Brief facts necessary to be noticed for deciding the appeal are:

2.1 Appellant and her husband Mr. Rahul Chaudhary are the

Personal Guarantors of the Corporate Debtor - Servel India Pvt. Ltd.

The Canara Bank, Respondent herein has extended financial facilities

to the Corporate Debtor to which personal guarantee was executed

both by the Appellant and her husband, Mr. Rahul Chaudhary.

2.2 Canara Bank, the Financial Creditor after giving a notice in

Form B to both Appellant and her husband filed Section 95

application. In Section 95 application filed against the Appellant,

Company Petition (IB) 334/ND/2024 was registered and in the

application under Section 95 filed against the husband of the

Appellant, Company Petition (IB) 335/ND/2024 was registered.

2.3 Both (IB) 334/ND/2024 and (IB) 335/ND/2024 were listed as

Item No.210 and 211 on 13.11.2024. On 13.11.2024, Advocate

Mayank Bhargava appeared for both Appellant and her husband in

(IB) 334/ND/2024 and (IB) 335/ND/2024 and prayed for two weeks'

time to file reply to the report of the Resolution Professional. The

Company Appeal (AT) (Insolvency) No.814 of 2025 3

Resolution Professional undertook to serve complete set of application

along with all annexures to the learned counsel for the Personal

Guarantor and matter was adjourned to 06.12.2024.

2.4 On 06.12.2024, both the cases i.e. (IB) 334/ND/2024 and (IB)

335/ND/2024 were listed as Item No.205 and 206. In the husband's

case appearance of learned counsel for the Appellant was noticed, who

informed the Court that the Personal Guarantor is ill and submitted

medical prescriptions. Further time was allowed to file reply and

matter was directed to be listed on 27.01.2025. In case of the

Appellant i.e. (IB) 334/ND/2024 no appearance of counsel was

noticed and the Adjudicating Authority noticing its earlier order dated

13.11.2024 observed that in view of the non-filing of the reply by the

Personal Guarantor and there being no appearance on her behalf,

proceedings are set ex-parte and next date fixed was 09.12.2024.

2.5 On 09.12.2024, none appeared on behalf of the Appellant. The

Adjudicating Authority passed an order admitting section 95

application.

2.6 Appellant filed an application for recall of both the orders dated

06.12.2024 and 09.12.2024 and prayed that Appellant be permitted to

file a reply to the report. The application for recall of the order dated

06.12.2024 and 09.12.2024 was opposed by learned counsel for

Canara Bank. The Adjudicating Authority by the impugned order

Company Appeal (AT) (Insolvency) No.814 of 2025 4

dated 24.04.2025 has dismissed the recall application, aggrieved by

which order this appeal has been filed.

2.7 The Adjudicating Authority in the impugned order has observed

that during course of the hearing learned counsel for the Appellant

was asked to state his defence, on which a request for adjournment

was prayed for by learned counsel for the Appellant. The Adjudicating

Authority referring to the order dated 10.03.2025, which was passed

in the appeal filed by the Appellant, did not accede to the request and

has rejected the application. IN Para 14 of the order, the Adjudicating

Authority made following observations:

"14. In any case, in due deference to the principles of natural justice, we gave opportunity to Ld. Counsel for the Applicant/ PG to put forth his stand even on merits and the plea raised by him on merit could be found contrary to the documents on record. Though he sought adjournment in the matter, but he himself produced the order of Hon'ble NCLAT, in terms of which Hon'ble NCLAT expected us to decide the application expeditiously as possible. Thus, in the interest of judicial precedence we deem it appropriate to reject the application."

3. Learned counsel for the Appellant challenging the order submits that

same counsel was appearing on behalf of both of the Personal Guarantors,

Appellant and her husband and both matters were listed on 13.11.2024 and

learned counsel for the Appellant appeared and prayed for time to file reply

Company Appeal (AT) (Insolvency) No.814 of 2025 5

and on the next date i.e. 06.12.2024 the appearance of Appellant's counsel

is noticed in (IB) 335/ND/2024 i.e. husband's case but on the same day

noticing that none appearing on behalf of the Appellant in (IB)

334/ND/2024, the order was passed to proceed ex-parte against the

Appellant. It is the case of the Appellant that on 06.12.2024, both cases

were listed as Item No.205 and 206 and when counsel for Appellant has

appeared for husband and informed about his illness and time was allowed

and matter was fixed for 27.01.2025, there was no occasion for learned

counsel for the Appellant to not appear in the case of the wife whose non-

appearance is noted. It is submitted that order dated 06.12.2024 was

uploaded only on 13.12.2024 and 06.12.2024 being Friday, on next working

day i.e. on 09.12.2024 again noticing absence of the Appellant, order has

been passed admitting Section 95 application. It is submitted that the

Appellant has made out sufficient case for recall of both the orders, which

was not considered as a sufficient cause. Learned counsel for the Appellant

had appeared before the Court on 06.12.2024 and made request for time,

which was allowed but order was noted in only husband's case. It is

submitted that the Adjudicating Authority committed error in rejecting the

recall application. The order passed on 09.12.2024 is in violation of

Principles of Natural Justice and deserve to be set aside.

4. Learned counsel appearing for the Resolution Professional and Canara

Bank both has opposed the submissions of the Appellant. It is submitted

that the Adjudicating Authority even during hearing has asked the learned

Company Appeal (AT) (Insolvency) No.814 of 2025 6

counsel the Appellant to state his defence but no submission was raised by

learned counsel for the Appellant and he sought for adjournment, which

clearly means that there is no valid defence of the Appellant. It is submitted

that on 06.12.2024, Mr. Mayank Bhargava, Advocate appeared but his

presence noted only in (IB) 335/ND/2024 i.e. husband's case where as

presence is not noticed in (IB) 334/ND/2024. It is submitted that ample

opportunity was given to file reply to the report of the Resolution

Professional but Appellant had not filed the reply and was not present on

06.12.2024 when the case was called.

5. We have considered the submissions of learned counsel for the parties

and perused the record.

6. On 13.11.2024, cases of both wife and husband i.e. (IB)

334/ND/2024 and (IB) 335/ND/2024 were listed together and in the case

which was filed against the Appellant following order was passed on

13.11.2024:

"ORDER

IA-4500/2024: As prayed by the Ld. Counsel appearing for the PG, 2 weeks time is granted for filing the reply to the report/application filed under Section 99 of IBC, 2016.

Let advance copy of reply be served upon both the RP as also the Creditor.

Company Appeal (AT) (Insolvency) No.814 of 2025 7

Ld. Counsel for the PG submitted that only copy of IA/report preferred under Section 99 of IBC, 2016 could be made available to him and the annexure enclosed thereto could not be supplied to him. Ld. Counsel for the RP undertakes to send a complete set of application along with all annexures to Ld. Counsel for the PG during the course of the day through e- mail.

List on 06.12.2024."

7. Similar order was also passed in (IB) 335/ND/2024 i.e. husband's

case. On next date, 06.12.2024, both the matters were again listed together

at Item No.205 and 206. In (IB) 335/ND/2024 i.e. husband's case,

Advocate Mayank Bhargava appeared, whose presence was noticed and

following order was passed on 06.12.2024:

"ORDER

IA-4498/2024: Ld. Counsel appearing for the creditors submitted that the RP has not made a copy of report available to the creditor. Let the report be made available to the creditor within one week from today. Ld. Counsel for the personal guarantor submitted that the reply could not be filed within the given time, as the personal guarantor is unwell. He also sought to produce the medical prescription to buttress his plea regarding personal guarantor. The medical prescription produced before us is kept on record. As prayed by Ld. Counsel for the personal

Company Appeal (AT) (Insolvency) No.814 of 2025 8

guarantor, further one week time is granted to file the reply.

List on 27.01.2025."

8. On same date, 06.12.2024, although presence of counsel for the

Appellant Mr. Mayank Bhargava was noted but noticing earlier order dated

13.11.2024, Court had directed to proceed ex-parte since no reply has been

filed nor the counsel who represented her on 13.11.2024 is present. Next

dated 09.12.2024 was fixed by setting Appellant ex-parte and on 09.12.2024

order admitting Section 95 application was passed.

9. It is the case of the Appellant that order dated 06.12.2024 was

uploaded only on 13.12.2024, hence, there was no occasion for the

Appellant to notice order for proceeding ex-parte against the Appellant.

Appellant has filed I.A. No.737 of 2025 praying for recall of orders. In the

application, it has been pleaded that on 06.12.2024, both the matters listed

as Item Nos.205 and 206 were taken up together, in which counsel

appeared and prayed for time, which was allowed, which has been stated in

Para 7 of the application, which is to the following effect:

"7. That on 06.12.2024, IB-335/ND/2024 (Canara Bank v. Rahul Chaudhary (Husband of Applicant)) and the captioned matter (IB-334/ND/2024) were listed together as Item No. 205 and 206, respectively. Both the matters were called and taken up together when the undersigned entered appearance for the Applicant and Husband of the Applicant in both the

Company Appeal (AT) (Insolvency) No.814 of 2025 9

matters informed that the Husband of the Applicant has been ill due to which the undersigned counsel could not sit with them. Based on the aforesaid submission and reviewing the proof of medical diagnosis, this Hon'ble Tribunal granted more time and renotified the matter to 27.01.2025. After giving the date, Item No. 207 was called, and the undersigned counsel left the courtroom. Copy of the order dated 06.12.2024 passed in IB-335/ND/2024 has been annexed herewith as Annexure-G."

10. The sequence of the events and facts clearly indicate that on

06.12.2024 both the matters were listed together as Item No.205 and 206.

Learned counsel appeared and prayed for time. Although the said request

has been noticed in one case i.e. IB-335/ND/2024 i.e. Section 95

application filed against husband whereas in IB-334/ND/2024 Court

proceeded ex-parte and observed that none appeared.

11. The application which was filed for recall of orders was supported by

affidavit of the Appellant where it was stated by the Appellant that due to

illness of the husband Applicant had to take care of him and could not meet

the counsel and prepare the reply, which has been clearly pleaded in Para 6

of the Application, which is to the following effect:

"6. That the Husband of the Applicant had not been keeping well and has been ill. In November, 2024 and December, 2024, Applicant's husband was suspected of thalassemia and other related

Company Appeal (AT) (Insolvency) No.814 of 2025 10

ailments and has become extremely weak and frail. He was not able to do any chores or move around much. It is owing to Applicant's Husband's ill health that neither the Husband nor the Applicant who was taking care of him could meet the undersigned counsel and prepare the reply. Copy of the medical diagnosis dated 22.11.2024 has been annexed herewith as Annexure-E. Copy of the medical diagnosis dated 04.12.2024 has been annexed herewith as Annexure-F."

12. The Adjudicating Authority in the order has not returned any finding

as to why the statement of the counsel that he appeared in both the cases

and prayed for time and due to illness of the husband, which is recorded in

order dated 06.12.2024, wife also could not prepare reply, the cause given in

the application praying for recall has not been adverted to. The Adjudicating

Authority in the impugned order has observed that Appellant was asked to

given his defence on the merits of Section 95 application, where the

Appellant prayed for adjournment.

13. The present is a case where application under Section 95 has been

filed to initiate CIRP both against husband and wife who had both having

given personal guarantee to the bank with respect to facilities extended to

the Corporate Debtor. Both the matters were proceeding together and it is

submitted that now they are also listed together and next date is

18.08.2025. From the pleadings on the record, it is clear that order to

Company Appeal (AT) (Insolvency) No.814 of 2025 11

proceed ex-parte was passed on 06.12.2024 which was Friday and on the

next date i.e. 09.12.2024 order for admission has been passed stating that

none has appeared.

14. In the facts of the present case, we are of the view that ends of justice

would have met in allowing the application filed by the Appellant for

recalling order dated 06.12.2024 and 09.12.2024.

15. The submission of the learned counsel for the Respondent that

Appellant was asked to address on merits of the application which was not

addressed and Appellant asked for adjournment, we do not find any

substance in the above submission. When the reply was not even filed by

the Appellant to the report of the Resolution Professional, asking the

Appellant to address on merits of Section 95 application was not required at

that stage. It is not finding of the Adjudicating Authority that Appellant is

unnecessarily delaying the process and deliberately has absented on

06.12.2024.

16. In result, we are of the view that order impugned deserved to be set

aside. We allow I.A. No.737 of 2025 and set aside order dated 06.12.2024

and 09.12.2024. The report of the Resolution Professional being already

filed; Appellant is also allowed two weeks' time to file reply to the report.

The Adjudicating Authority may proceed to consider IB-334/ND/2024 in

accordance with law.

Company Appeal (AT) (Insolvency) No.814 of 2025 12

17. We make it clear that we have not entered into the merits of

application under Section 95 and it is for the Adjudicating Authority to

consider the submissions and decide the application in accordance of law.

Appeal is disposed of accordingly.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

NEW DELHI

18th August, 2025

Archana

Company Appeal (AT) (Insolvency) No.814 of 2025