Vishnoo Mittal & Anr Suspended Board Of ... vs Mr. Naveen Kumar Jain Resolution ...

(Arising out of Judgement dated 11.06.2021 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench II) in IA No.2034/2021 in CP No.(IB)-702/(ND)/2018)

In the matter of: Vishnoo Mittal Suspended Board of Director/Shareholder /Resolution Applicant of M/s Xalta Food and Beverages Pvt Ltd Flat No.7140, D-7 Vasant Kunj, New Delhi 1st Appellant

Heavent Malhotra Suspended Board of Director/Shareholder /Resolution Applicant of M/s Xalta Food and Beverages Pvt Ltd Flat No.7018, D-7 Vasant Kunj, New Delhi 2nd Appellant

Vs

Mr Naveen Kumar Jain Resolution Professional, For M/s Xalta Food and Beverages Pvt Ltd F-1, Milap Nagar, Uttam Nagar, New Delhi-110059 Respondent

Present: Mr Abhishek Ananad and Mr. Tanveer Oberoi, Advocates for Appellant. Mr. Brijesh Kumar Tamber, Mr. Naveen Kumar Jain, Liquidator (for 'Resolution Professional', R1)

JUDGEMENT

VIRTUAL MODE 2

M. VENUGOPAL, J Preface The Appellants have filed the instant Comp. App.(AT)(Ins) No.438/2021

before this 'Tribunal' as 'Aggrieved persons' being dissatisfied with the Order

dated 11.06.2021 in IA No.2034/2021 in CP(IB)No.702(ND)/2018 passed by

the 'Adjudicating Authority' (National Company Law Tribunal, New Delhi

Bench II).

2. The 'Adjudicating Authority' (National Company Law Tribunal, New

Delhi Bench II) while passing the impugned order in IA No.2034/2021 in CP

(IB)No.702(ND)/2018 (filed by the 2nd Respondent/Applicant(Resolution

Professional) among other things at paragraph 15 to 23 had observed the

following

"15. When we consider both the provisions together, it is seen that under

Section 33 of the IBC, Adjudicating Authority is vested with the power to

pass the liquidation order. Whereas under Section 34 of the IBC, 2016, the

Adjudicating Authority is empowered to appoint the Liquidator.

16. In the light of the aforesaid provisions when we peruse the order

passed by the Adjudicating Authority on 14.06.2019 , we find that the

application filed by the Resolution Professional for liquidation under

Section 33 of the IBC, 2016 has already been allowed. Vide that Order, the

Adjudicating Authority held that "The assets of the Corporate Debtor be

put for liquidation as no resolution plan has been received and 270 days 3

are also over." The matter is pending only for appointment of the RP as a

liquidator as no decision has been taken by the COC in this regard.

17. We have refer to the provision for the appointment of liquidator and

as per the provision, whenever the Adjudicating Authority pass an order

for liquidation of the corporate debtor under Section 33, the Resolution

Professional appointed for the corporate insolvency resolution process

under Chapter II shall, subject to submission of a written consent by the

Resolution Professional to the Adjudicating Authority in specified form, are

as the liquidator for the purposes of liquidation unless replaced by the

Adjudicating Authority under sub-section (4) of Section 34 of IBC 2016.

18. Now in the light of the aforesaid provision, we examine the order dated

14.06.2019.

19. At this juncture, we again go through the order dated

14.06.2019passed by this Adjudicating Authority in CA-731/2019 which

reveals that the RP had proposed his own name to act as a liquidator in

this case. Therefore, the RP had also given his consent. Hence, in view of

Section 34(1) of the IBC, 2016, he shall act as a liquidator unless and until

replaced by the Adjudicating Authority under Sub Section 4 of Section 34

of the IBC, 2016. And it is also apparent from the order dated 14.06.2019, 4

the Adjudicating Authority has not passed any order under Sub-Section 4

of Section 34 of the IBC, 2016 and the matter was deferred next date.

20. In view of the aforesaid discussion, we are of the considered view that

far as the liquidation order under Section 33(1) of the IBC, 2016 is

concerned, the first part of the order dated 14.06.2019 shows that the

order of liquidation was passed on two grounds i.e. no resolution plan was

received and the period of CIRP was already over. Hence, in view of

Section 34(1) of the IBC, 2016, unless the Resolution Professional is

replaced under sub-section 4 of Section 34 of IBC, 2016 he shall continue

to act as Liquidator.

21. Therefore, we are of the considered view that so far as the order dated

04.07.2019 passed in CA/827/2019 is concerned. From the perusal of that

order, we notice that the hearing on the point of confirmation and

appointment of liquidator under Section 34(4) of the IBC, 2016 pending for

consideration before this Adjudicating Authority was deferred. Nor the

order dated 14.06.2019, by which the liquidation order was passed, has

been recalled.

22. It is also the admitted position of law that there is no power for review

of order under the IBC and once the liquidation order is passed by this

Adjudicating Authority on 14.06.2019, there is no scope to recall. The 5

subsequent order dated 04.07.2019 cannot be read as an order of recall

of the order of liquidation, rather it can be treated as an order which

deferred the matter that was for consideration i.e. confirmation of the

liquidator under Section 34(4) of the IB

C, 2016 only.

23. Hence, we find no force in the contention of the Applicant and no

reason to give any direction to the applicant or the COC in respect of the

Expression of Interest/Resolution Plan of Resolution applicant M/s

Hindustan Aqua Private Ltd received by the Resolution Professional.

Therefore, the prayer of the Applicant is hereby rejected."

and dismissed the application.

APPELLANTS SUBMISSIONS

3. Challenging the order of dismissal dated 11.06.2021 in IA

No.2034/2021 filed by the Resolution Professional/2nd

Respondent/Applicant passed by the 'Adjudicating Authority' (National

Company Law Tribunal, New Delhi Bench II), the Learned Counsel for the

Appellant submits that the 'Adjudicating Authority' (National Company Law

Tribunal, New Delhi Bench II) had exceeded its 'authority' by reviewing its own

order dated 04.07.2019 whereby and whereunder, the said 'Authority' had

failed to consider the application (i) CA 607 of 2019 (filed by the Appellants

against the decision of the Respondent to wrongly categorised ineligible as per

Section 29(A) of the I&B Code, 2016) and (ii) CA No.731/2019 (filed by the 6

Respondent seeking liquidation of the Corporate Debtor) were pending before

the Adjudicating Authority.

4. The Learned Counsel for the Appellant contends that the 'Adjudicating

Authority' had failed to appreciate the order dated 04.07.2019 in CA

No.827/2019 (filed by the 1st Appellant) wherein it is, inter alia, observed as

under:-

........."It was also mentioned that CA 731/2019 had been filed, praying

for liquidation. Though liquidation was not confirmed for want of the

consent of a Liquidator, it is now being agitated by the applicant that

despite a resolution plan having been proposed which was to be

considered and disposed of on 8.7.2019, due notice was issued to them

for liquidation. Keeping in view of the fact and circumstances of the case,

the applicant has some merit in his submission. It would be in the

interest of the justice to ensure that the pending application is first

disposed off and then liquidation be directed.

Notice of this application as well as CA 731/2019 is accepted by the

parties concerned. Reply by the non-applicant be filed."

5. It is represented on behalf of the Appellants that the 'Adjudicating

Authority' (National Company Law Tribunal, New Delhi Bench II) had failed to

take into account of the fact that if the order dated 04.07.2019 was not an

'order', whereby the 'Liquidation Order' was kept in abeyance till the disposal

of CA 607/2019, then why the 'Adjudicating Authority' (National Company

Law Tribunal, New Delhi Bench II) had not passed any order in CA 731/2019

(liquidation application) from 04.07.2019 till the date of passing of the 7

impugned order dated 11.06.2021 in IA No.2034/2021 in

CP(IB)No.702(ND)/2018.

6. The Learned Counsel for the Appellants points out that the

'Adjudicating Authority' had ignored its later order dated 26.08.2019,

19.09.2019, 14.102019, 22.102019, 30.10.2019, 05.11.2019, 22.11.2019,

13.01.2020 and 18.02.2020 which demonstrates that the 'Adjudicating

Authority' was continuing with its own directions given in the order dated

04.07.2019, i.e. "keeping in view the facts and circumstances of the case, the

Applicant has some merit in his submission. It would be in the interest of justice

to ensure that the pending application is first disposed off and then liquidation

be directed."

7. The Learned Counsel for the Appellants comes out with a legal plea that

the 'Adjudicating Authority' in the impugned order had travelled beyond its

purview/jurisdiction to review the order dated 04.07.2019 in CA 827/2019

and came to an incorrect conclusion that the order dated 04.07.2019 cannot

be said to be a recall order of Liquidation. It is represented on behalf of the

Appellants that the 'Adjudicating Authority' does not have the power to

modify an earlier order, save and except as mentioned in Section 420 of the

Companies Act, 2013.

8. According to the Learned Counsel for the Appellants, as per Section

420(2) of the Companies Act, 2013, any order passed by the 'Tribunal' can be

rectified where there is any mistake apparent from the record, within two

years from the date of the order and in fact, the impugned order dated 8

11.06.2021 IA No.2034/2021 in CP(IB)No.702(ND)/2018 passed by the

'Adjudicating Authority' reviewing its order dated 04.07.2019 is an illegal one.

APPELLANTS' DECISIONS

9. The Learned Counsel for the Appellants to fortify the contentions that

an 'Adjudicating Authority' is not conferred with the power to review and varyy

its own order, relies on the order dated 10.07.2019 in the matter of Mr. Dinesh

Goyal V. DCB Bank Ltd in Comp App.(AT)(Ins) No.702 of 2019 passed by the

National Company Law Appellate Tribunal, New Delhi wherein at paragraph

5 had observed that "In the present case, as there is no mistake apparent from

the record and in absence of any typographical error, it was not open to the

Adjudicating Authority to take any recourse of sub-section (2) of Section 420 of

the Companies Act, 2013"

10, The Learned Counsel for the Appellants cites the order dated

02.05.2019 of this Tribunal in Review Application No. 10/2019 in Comp App

(AT)No.387/2018 between Mallina Bharathi Rao Vs Gowthami Solvent Oils

Ltd & Ors wherein it is observed that and held as under:-

"There is no provision of review under the procedures. Under sub-section

(2) of Section 420 only mistake apparent from the record can be corrected.

No such mistake apparent on the fact of record is shown by the counsel.

The Applicant is reagitating the issues which were earlier before the

NCLT and then agitated before this Appellate Tribunal and regarding

which we have already passed the judgement. Instead of proceeding to

challenge the judgement of this Tribunal, this device has been adopted. 9 Section 11 of NCLT Rules cannot be so invoked so as to create power to

review judgement which power has not been conferred by Legislature."

11. The Learned Counsel for the Appellants refers to the decision of the

Hon'ble Supreme Court in Swiss Ribbons Pvt Ltd Vs Union of India and Others

(WP(C) No.99/2018) wherein it is observed that the 'objective of the Code' is

re-organisation and not corporate death of the Corporate Debtor by being a

recovery legislation for its creditors.

12. The Learned Counsel for the Appellant takes a plea that CA

No.731/2019 (liquidation application) is pending before the 'Adjudicating

Authority' wherein vide order 4.7.2019 notice was issued to the Appellants

and till date the same is pending. In short, the impugned order dated

11.6.2021 in IA No.2034/2021 in CP(IB)No.702(ND)/2018 was passed in

excess of the jurisdiction bestowed on the 'Adjudicating Authority' and the

same is liable to be set aside, in the interest of justice.

RESPONDENT'S CONTENTIONS

13. Conversely, it is the contention of the Learned Counsel for the

Respondent/Liquidator that by an Order dated 14.06.2019 passed by the

Adjudicating Authority in CA 731/2019 (Liquidation application filed by the

Respondent) in CP(IB)No.702(ND)/2018 the liquidation of the Corporate

Debtor was initiated and this order of allowing the CA 731/2019 is never

questioned by the Appellant or by any other individual before the

'Adjudicating Authority' and that the said order is a conclusive and binding

one.

10

14. Advancing his argument, the Learned Counsel for the Respondent

brings it to the notice of this 'Tribunal' that what remains is the appointment

of the Liquidator and indeed, Section 33 of I&B Code, 2016 deals with the

'initiation of liquidation' but Section 34 of the Code separately provides for an

appointment or replacement of the liquidator by the 'Adjudicating Authority'

upon passing of an order for 'Liquidation'.

15. The Learned Counsel for the Respondent takes a stand that the

Appellants are the former 'promoters' of the 'Corporate Debtor' and in CA

731/2019 (Filed by the Respondent/Liquidator) for initiation of 'Liquidation'

proceedings the 'Appellants' were not impleaded and a liquidation order dated

14.06.2019 was passed by the 'Adjudicating Authority' which was not an

'Ex- Parte' one, as averred by the 'Appellants'. Therefore, Rule 49(2) of the

National Company Law Tribunal Rules, 2016 is inapplicable to the facts of

the present case.

16. According to the Learned Counsel for the Respondent the impugned

order dated 11.06.2021 is just a clarificatory one in regard to the initiation of

liquidation and that setting aside the impugned order dated 11.06.2021 IA

No.2034/2021 in CP(IB)No.702(ND)/2018 will not set aside the liquidation

which was initiated through an order dated 14.06.2019.

17. The Learned Counsel for the Respondent contends that the 'Committee

of Creditors' in its Meeting on 27.05.2019 held that 'Let Hon'ble Tribunal to

decide the liquidation proceedings in accordance with Section 33 A(1)(a) of the

Code. Hence, the Respondent filed CA 731/2019 for liquidation wherein he 11

gave his consent to function as the Liquidator and that a liquidation order

was passed on 14.06.2019.

18. The Learned Counsel for the Respondent adverts to the fact that the

'Corporate Debtor' is in 'CIRP' and later liquidation, from the year 2018 (three

years) and on account of the fact that the Corporate Debtor, has no land or

building of its own and the plant and machinery is situated on a leased

premises in which the lease rent alone is in excess of Rs.38 lakhs per month,

the CIRP and the liquidation cost itself has swelled to an excess of Rs.18

crores etc. Apart from this, the bulk of the valuation of the 'Corporate Debtor'

is obtained from the plant and the machinery which is undergoing rapid

depreciation on account of the pending CIRP and then liquidation and closure

of the plant.

19. The Learned Counsel for the Respondent points out that various

endeavours made during 'CIRP' had failed to result in any eligible Resolution

Plan being furnished and that the continuation of the 'liquidation proceedings'

is in the interest of the 'Corporate Debtors' and its stakeholders. If the

liquidation proceedings are not continued, then an irreparable loss and

prejudice will be caused to their interests.

20. The Learned Counsel for the Respondent submits that more than 800

days had elapsed after the expiry of 270 days and in such a scenario, placing

the liquidation back to 'CIRP' shall be against Law.

12

RESPONDENT'S CITATIONS

21. The Leaned Counsel for the Respondent refers to the decision of the

Hon'ble Supreme Court in Ram Sahu (dead) through LRs and others V Vinod

Kumar Rawat and Ors reported 2020 SCC OnLine SC 896 wherein at

paragraph 30 it is observed as under:-

"30.The dictionary meaning of the word "review" is "the act of looking,

offer something again with a view to correction or improvement". It cannot

be denied that the review is the creation of a statute. In the case of Patel

Narshi Thakershi Vs Praduumansinghji Arjunsinghji , (1971) 3 SCC 844,

this Court has held that the power of review is not an inherent power. It

must be conferred by law either specifically or by necessary implication.

The review is also not an appeal in disguise."

22. The Learned Counsel for the Respondent cites the decision of the

Hon'ble Supreme Court in Pratap Technocrafts (P) Ltd V Monitoring

Committee of Reliance Infratel Ltd reported in 2021 SCC OnLine SC 569

wherein it is observed and held that :-

"There is no equity based jurisdiction with the NCLT under the provisions

of IBC and the Adjudicating Authority as a body owing its existence to

the statute, must abide by the nature and extent of its jurisdiction as

defined in the statute itself."

23. The Learned Counsel for the Respondent contends that the jurisdiction

of the 'Adjudicating Authority' and the Appellate Authority are not to be

extended into entering upon the merits of a business decision taken by a 13

majority of the Committee of Creditors in its subjective, commercial wisdom

and refers to the decision of Hon'ble Supreme Court in the matter of

Committee of Creditors of Essar Steel India Ltd V Satish Kumar Gupta and

Others reported in (2020) 8SCC 531.

24. The Learned Counsel submits that even in the case of providing an

opportunity to an ineligible Resolution Applicant to remove the defect, it shall

not be construed as an extension of CIRP period in terms of Section 12(3) of

the I&B Code, 2016 and that the 'Corporate Insolvency Resolution Process'

shall have to be completed within the prescribed period.

25. APPARENT ERROR:

The term 'Error apparent on the face' of the proceedings is held to be

one based on clear ignorance or disregard of the provisions of Law as per

decision of the Hon'ble Supreme Court in Lily Thomas V. Union of India

reported in AIR 2000 SC 1650 at spl page 1665. Further, in the decision of

the Hon'ble Supreme Court in Hari Vishnu Kamat V. Ahmad Ishaque,

reported in AIR 1955 SC 233 it is held that 'it is essential that it should be

something more than a mere error; it must be one which must be manifest on

the face of the record'.

26. Review Power:

In the decision of Hon'ble Supreme Court in Patel Narshi Thakershi V.

Pradyumansinghji Arjunsinghji reported in (1971) 3 SCC Page 844, at spl

page 847 it is observed and held that 'the power of review is not an inherent

power. It must be conferred by Law either specifically or by necessary 14

implication'. No wonder, the 'Tribunal' has no inherent power to review, as

per Section 114 and Order 47 of the Civil Procedure Code.

TRIBUNAL'S POWER

27. Also that, a mere glance of Section 420(2) of the Companies Act, 2013

unerringly points out that the 'Tribunal' has power to rectify its order, if there

is any mistake apparent from the record, but it has 'no power' of review of its

own order. In this regard, this 'Tribunal' pertinently points out that Rule 154

of the National Company Law Tribunal Rules, 2016 enjoins the 'Tribunal' to

rectify its order, if there is any clerical or arithmetical mistake in the order of

the Tribunal or any error therein arising out of any accidental slip or omission

of its own motion or an application of any party by means of rectification.

RECALL POWER

28. It is significantly pointed out by this 'Tribunal' that Hon'ble Supreme

Court in the decision in Budhia Swain V. Gopinath reported AIR 1999 SC

2089 has prescribed the conditions for recalling an order (i) the proceedings

suffer from the inherent lack of jurisdiction and such lack of jurisdiction is

patent (ii) There exists fraud or collusion in obtaining the judgement (iii) There

has been a mistake of the Court prejudicing a party, or (iv) a judgement

rendered in ignorance of the fact that a necessary party has not been served

at all or had died and his estate was not represented.

DISCUSSIONS

29. It transpires from IA 2034/2021 in IB/702/(ND)/2018 (filed by the

Resolution Professional/Applicant/2nd Respondent in 'Appeal)' that an 15

issuance of direction to the Applicant/Resolution Professional be passed as

to whether the 'Expression of Interest'/'Resolution Plan' of 'Resolution

Applicant' M/s Hindustan Aqua Pvt Ltd be considered by the Resolution

Professional and 'Committee of Creditors'. Further, in the event of the

'Adjudicating Authority' directing the 'Resolution Professional' to consider

EOI/Resolution Plan of M/s Hindustan Aqua Pvt Ltd, a direction was prayed

to be issued to the 'Resolution Professional' to call for 'Meeting' of the

'Committee of Creditors' for this purpose and allow 60 days' time to the

Resolution Profession/COC for necessary proceedings. In the alternative, a

relief to exclude the litigation period from 16.05.2019 was prayed for by the

Resolution Professional/Applicant in view of proviso 12 (3) of the I&B Code,

2016 (Amended Act) 2019 dated 06.08.2019 for 60 days so that the

'Committee of Creditors' may take appropriate decision in the matter and

conclude the 'CIRP' under proviso. 309. The 'Adjudicating Authority' on

11.06.2021 had passed the impugned order by coming to the conclusion that

there was no reason to give any direction to the Applicant or the COC in

respect of the 'Expression of Interest/Resolution Plan' of 'Resolution

Applicant', M/s Hindustan Aqua Pvt Ltd received by the Resolution

Professional and rejected the relief by dismissing the IA No.2034/2021.

30. The grievance of the Appellants is that the 'Adjudicating Authority' has

failed to appreciate the factual aspect of the pendency of CA NO.607 of 2019

(Filed by the Appellants against the decision of the Respondent to wrongly

categorise ineligible under Section 29A of the I&B Code) and CA No. 731/2019

(filed by the Respondent seeking liquidation of the Corporate Debtor). 16

31. The Appellants/Applicant in CA No.607/2019 in CP

No.(IB)/702(ND)/2018 had sought a declaration relief as eligible under

Section 29A(c) h) of the Code as wrongly held to be ineligible by the 'Resolution

Professional' based on inconclusive opinion and report. Further a direction

was sought to be issued to the Resolution Professional to re-consider the

Resolution Plan submitted by the Appellant/Applicant within the parameters

of the Code, as required under Regulation 39(3) of the CIRP Regulations, 2016

and in terms of the judgement passed by the Hon'ble Supreme Court in Swiss

Ribbons Pvt Ltd Vs Union of India.

32. It comes to be known that in CA No.607/2019 in CP No.

(IB)/702(ND)/2018 filed by the Appellants against the Resolution

Professional, notice was ordered by the 'Adjudicating Authority' to come up

for further consideration on 22.05.2019.

33. The Respondent filed CA No.731/2019 (Liquidation Application)) before

the Adjudicating Authority praying for directions being issued to proceed

towards liquidation and the same was allowed on 14.06.2019.

34. On behalf of the Appellants, it is brought to the notice of this 'Tribunal'

that the 'Adjudicating Authority' in CA No.607/2019 and CA No.183/2019

had passed an order on 26.08.2019 that the aforesaid two applications shall

be 'reheard again as this Bench was reconstituted' and notice was directed to

be effected by all modes to the Members of the Committee of Creditors

returnable on 19.09.2019. On 30.10.2019 the 'Adjudicating Authority' had

heard the argument in CA No.607/2019 in part and for the conclusion of

argument, directed the matter to come up on 31.10.2019 at 02.30 PM. 17

35. On 05.11.2019 the 'Adjudicating Authority' had passed an order in CA

No.607/2019 stating that because of the constitution of the Special Bench

the matter listed for argument could not be taken up and directed the listing

of the matter on 22.11.2019 at 02.30 PM for hearing.

36. The Learned Counsel for the Appellants submits that the 'Resolution

Professional' is a 'Resolution Professional' on 4.7.2019 and he is not the

'Liquidator' on that date.

37. On 30.04.2021, the 'Adjudicating Authority' in IA No.2034 of 2021,

because of the two orders passed by the Bench on different dates on

14.06.2019 and 04.07.2019 thought it proper to give an opportunity to the

persons who are interested in this matter and accordingly directed the

'suspended Board of Director' as well as the 'Committee of Creditors' to file a

reply within 10 days from today and directed the Resolution Professional to

serve the copy of the application to the persons concerned and further ordered

to list the matter on 19.05.2021.

38. At this juncture, this Tribunal points out that Rule 49 of NCLT Rules,

2016 pertains to 'Ex parte Hearing and Disposal' which runs as under:

"(1) Where on the date fixed for hearing the petition or application or on

any other date to 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. 18

(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

(which the petitioin 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."

39. As far as the instant case is concerned, this Tribunal relevantly points

out that the 'Adjudicating Authority' had failed to appreciate that CA

No.827/2019 was filed by the 1st Appellant (under Rule 49(2) of the NCLT

Rules, 2016) praying to recall an Ex-Parte order dated 14.06.2019 in CA

No.731/2019 (Liquidation application) passed by the 'Adjudicating Authority'.

40. A perusal of the Order dated 14.06.2019 passed by the 'Adjudicating

Authority' in CA No.827/2019 in CP (IB) 702(ND)/2018 indicates that CA

No.731/2019 was allowed given the 'facts and circumstances' and there is no

indication in the order in CA No.827/2019 in CP No.(IB)/702/(ND/2018

dated 14.06.2019 that CA No.731/2019 (Liquidation application filed by the

Respondent) that the Appellants/Applicants were heard. As such when the

said order of allowing CA No.731/2019 was passed on 14.06.2019, the same

was allowed without issuing Notice on the Appellant/Applicant and this 19

'Tribunal' comes to a resultant conclusion that the said order was passed by

the 'Adjudicating Authority' in an unilateral manner as an Ex parte one

thereby giving a right to the Appellant/Applicant to file CA No.827/2019 to

set aside the ex parte order.

41. By virtue of the order dated 04.07.2019 in CA No.827/2019 (filed by

the 1st Appellant) wherein the 'Adjudicating Authority' held that pending

application will be first disposed off and then liquidation be directed and

ordered 'Notice' in CA No.731/2019 (Liquidation Application), admittedly, the

same is pending as on date. When that be the fact situation and because of

the Central Government declaring a 'Nationwide Lock Down' due to Covid-19

on 25.03.2020, the matter listed on 01.04.2020 could not be taken up and

that on 01.04.2021, the Respondent filed an application being IA NO.

2034/2021 in (IB)/702/(ND)/2018 in which on 30.04.2021 the 'Adjudicating

Authority' had observed that the liquidation order was passed by the Bench

on 04.06.2019 but subsequently in the order dated 04.07.2019 it was

mentioned that the pending application will be first disposed of and then,

liquidation be directed and to file reply in IA No.2034/2021, the Appellants

were granted time to file 'Reply' and the matter was directed to be listed on

19.05.2021.

42. In fact, on 19.05.2021, IA No.2034/2021 was heard by the

'Adjudicating Authority' and that the orders were reserved. The Respondent

in May, 2021 filed IA No.2946/2021 praying inter alia to review the orders

dated 14.06.2019 and 04.07.2019 passed by the 'Adjudicating Authority' and

on 09.06.2021 the Respondent had prayed for the withdrawal of IA 20

No.2946/2021, since the 'Adjudicating Authority' had observed that it has 'no

power to review' its own order.

43 In the instant case, on going through the impugned order dated

11.06.2021 in IA No.2034/2021 in (IB) 702(ND)/2018 this Tribunal finds that

the 'Adjudicating Authority' at para 12 had observed that it has no power to

review its own order but traversed beyond its purview and reviewed the order

dated 04.07.2019 in CA No.827/2019 by concluding that once a liquidation

order was passed there is no scope to recall, which is contrary to the order

passed by it on 04.07.2019 where it observed that the pending application

will be disposed and then liquidation be directed.

44. Moreover, it cannot be forgotten that CA No.731/2019 filed by the

Respondent (liquidation application) is pending before the 'Adjudicating

Authority' as seen from the order dated 04.07.2019 wherein notice was issued

to the Appellant and till date the said application is pending for determination.

Apart from that, it is to be borne in mind that the Respondent, before the

'Adjudicating Authority' had not made any request to review the order dated

04.07.2019. When that be the factual scenario, the impugned order passed

by the 'Adjudicating Authority' in IA No.2034/2021 in (IB) 702(ND)/2018 by

the 'Adjudicating Authority' dated 11.06.2021 bristles with legal infirmity and

the same is held by this Tribunal as one without jurisdiction in the eye of Law.

Therefore, this 'Tribunal' in furtherance of 'Substantial Cause of Justice'

interferes with the aforesaid 'impugned order' and sets aside the same.

Consequently the Appeal succeeds.

21

CONCLUSION

45. In fine, the Comp App (AT)(Ins) 438/2021 is allowed. No costs. The

'Adjudicating Authority' (National Company Law Tribunal, New Delhi II) is

directed to restore the IA No.2034/2021 in CP(IB)No.702(ND)/2018 to its file

and to pass fresh orders on merits, in accordance with law, of course, after

providing adequate opportunity of hearing to both sides, by permitting them

to raise all factual and legal pleas as expeditiously as possible.

46. IA No.1129/2021 (seeking Stay of the Impugned Order dated

11.06.2021 passed by the 'Adjudicating Authority') and IA No.1130/2021

(claiming exemption from filing certified copy of the impugned order) are

closed.

(Justice M. Venugopal) Member (Judicial)

(Dr. Ashok Kumar Mishra) Member (Technical) Dated:29.11.2021

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