Ranjeet Karna vs Bell Finvest (India) Ltd

Ranjeet Karnal ...Appellant

Vs.

Bell Finvest (India) Limited ...Respondent

Present: For Appellant: - Ms. Reema Jain, PCS.

For Respondent: - Mr. Vinit J. Mehta and Mr. Anirudh Puroshottam, Advocates.

ORDER

07.03.2018─ This appeal has been preferred by Mr. Ranjeet

Karnal, Director of Laser Care India Private Limited ('Corporate Debtor')

against the order dated 22nd December, 2017 passed by the

Adjudicating Authority (National Company Law Tribunal), Ahmedabad

Bench in CP. No. (IB) 140/7/NCLT/AHM/2017, whereby and

whereunder the application preferred by the Respondent- 'Financial

Creditor' under section 7 of the Insolvency and Bankruptcy Code, 2016

(hereinafter referred to as "I&B Code") has been admitted, order of

'Moratorium' has been passed and 'Interim Resolution Professional' has

been appointed with certain directions.

Company Appeal (AT) (Insolvency) No. 68 of 2018 2

2. Learned Company Secretary appearing on behalf of the Appellant

submits that no notice under Rule 4(3) of the Insolvency and

Bankruptcy (Application to Adjudicating Authority) Rules, 2016 along

with Form-1 was served on the 'Corporate Debtor'. Even notice issued

by the Adjudicating Authority was not served on the 'Corporate Debtor'

which has been noticed at Paragraph no. 6 of the impugned order, which

reads as follows:

"6. Petitioner served a copy of petition on the

respondent and filed proof of service. Petitioner also

filed proof of service of notice of the date of hearing

on respondent. This Tribunal also directed Registry

to issue notice of date of hearing on respondent.

Registry of this Tribunal also issued notice to the

respondent but it was returned unserved. None

appeared for the respondent. Respondent has not

filed any objections. Heard arguments of learned

counsel for the petitioner."

3. It is further submitted that the address of the 'Corporate Debtor'

was changed more than a year prior to the filing of the application under

section 7 of the 'I&B Code' which was known to the 'Financial Creditor'

but for reasons known to them, the notices were sent to the old address.

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4. It is also submitted that there was no default of debt and

therefore, the application under Section 7 of the 'I&B Code' was not

maintainable.

5. Learned counsel appearing on behalf of the Respondent-

'Financial Creditor' submitted that the proof of service of notice of the

date of hearing has been filed by the 'Financial Creditor'. However, we

find that the Adjudicating Authority issued notice recording the date of

hearing of the application was not served on the 'Corporate Debtor' and

returned unserved. It is also not disputed that the address of the

'Corporate Debtor' had been changed much prior to filing of the

application under Section 7 of the 'I&B Code'; therefore, it is not clear

as to how the 'Financial Creditor' filed proof of service of notice on the

'Corporate Debtor'.

6. Learned counsel appearing on behalf of the Respondent submits

that the notice was served on one of the Directors, but such service of

notice on one of the Directors cannot be treated as service of notice on

the 'Corporate Debtor', which was the party respondent and not an

individual Director. This apart, we find that there is nothing on the

record to suggest that the notice under Rule 4(3) of the Insolvency and

Bankruptcy (Application to Adjudicating Authority) Rules, 2016 was

forwarded by the 'Financial Creditor' or served on the 'Corporate Debtor'.

7. In view of the fact that the rules of natural justice have been

violated and the Adjudicating Authority has also accepted that the

Company Appeal (AT) (Insolvency) No. 68 of 2018 4

notice of date of hearing on the Respondent was issued and returned

unserved, we have no other option but to set aside the impugned order

dated 22nd December, 2017 which is set aside and remit the case to the

Adjudicating Authority, Ahmedabad Bench for fresh decision.

8. The Appellant will ensure that the 'Corporate Debtor' appears

through its counsel or representative (not through 'Resolution

Professional'), will appear before the Adjudicating Authority on 22nd

March, 2018 at 10.30 a.m. The 'Financial Creditor' will also appear

before the Adjudicating Authority on the said date i.e. 22nd March, 2018.

The Adjudicating Authority thereafter, will fix a date of hearing in

presence of the Appellant or representative of the 'Corporate Debtor' and

after hearing the parties will pass appropriate order in accordance with

law. The appeal stands disposed of with aforesaid observations and

directions. No cost.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice Bansi Lal Bhat) Member(Judicial) Ar/uk

Company Appeal (AT) (Insolvency) No. 68 of 2018