NCLT erred in rejecting plea requesting review of admission: NCLAT

Case Details: Hacxad Infotech (P.) Ltd. v. Skootr Global (P.) Ltd. - [2022] 140 taxmann.com 110 (NCLAT–New Delhi)

Judiciary and Counsel Details

• • Justice Ashok Bhushan, Chairperson & Dr Alok Srivastava, Technical Member
  • Gaurav Mitra, Adarsh Rai & Sidhant Saraswat, Advs. for the Appellant.
  • Varun Sharma, Ms Vanshika Gupta, Raunak Jain & Buddy Ranganadhan, Advs. for the Respondent.

Facts of the Case

In the instant case, the appellant-corporate debtor entered into a facility management agreement with the respondent-operational creditor. The operational creditor issued notice u/s 8 on registered e-mail IDs and by speed post on the registered address of the corporate debtor. However, no reply was received from the corporate debtor.

Thereafter, the operational creditor filed an application u/s 9 of the IBC for initiating the corporate insolvency resolution process against the corporate debtor. The Adjudicating Authority (NCLT) issued a notice of appearance to the corporate debtor. However, the corporate debtor failed to appear before the Authority.

In addition to this, the operational creditor filed an affidavit of service of notice before the NCLT, wherein it was mentioned that notices issued by registered post as well as speed post had not been delivered and returned with endorsement ‘addressee left without instruction’, whereas e-mail sent to the corporate debtor on e-mail IDs was sent.

The NCLT passed an ex parte order admitting the application filed u/s 9 of the IBC by the operational creditor against the corporate debtor. The corporate debtor filed an application before the NCLT for setting aside the ex parte order on the ground of non-service of notice and petition filed u/s 9 of the IBC.

The NCLT by impugned order rejected the said application on the ground that the order had been passed by due consideration and there was no provision in the I&B Code for review of order admitting a petition filed u/s 9 of the IBC.

Thereafter, an appeal was made to the National Company Law Appellate Tribunal against the order passed by the Adjudicating Authority (NCLT)

The NCLAT observed that the NCLT was fully competent to recall the ex parte order in the exercise of its jurisdiction under rule 49(2) of the National Company Law Tribunal Rules, 2016

NCLAT Held

The NCLAT held that since the ex parte order was passed without service of notice and the corporate debtor was asking for the recall of the said orders, the NCLT committed an error in holding that appellant was asking for a review of the admission order

The NCLAT, further held that since the appellant had preferred an application for recall of order much before the constitution of CoC, the ex parte order as well as order of the NCLT rejecting the application of the appellant was to be set aside and directed that the application filed u/s 9 of the IBC was to be revived before the NCLT.

List of Cases Reviewed

• • C.A. No. 405/2019 in IB-195(ND)/2019, dated- 30-11-2021 (para 19) reversed.

List of Cases Referred to

• • Khan Enterprises v. NCLT [Writ-C No. 32675 of 2018, dated 27-9-2018] (para 2)
  • Suspended Management of Jay Poly Pack (P.) Ltd. v. SGV Foils (P.) Ltd. [Co. Appeal (AT) (Hus) No. 3620 of 2021, dated 20-9-2021] (para 6).