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2019 (6) TMI 1464 - Tri - Companies LawRestoration of petition - initiation of CIRP - Section 408 read with Section 424 of the Companies Act 2013 - HELD THAT - Perusal of Section 424 (2) of Companies Act 2013 shows that this Tribunal for the purpose of discharging its functions under this Act or under IBC 2016 shall have the same powers as are vested in a civil court under the Code of Civil Procedure 1908 while trying a suit in respect of the matters specified in Clause (a) to Clause (h) of Section 424(2) of the Act of 2013. Under the Companies Act 2013 by virtue of the powers contained under the said Act NCLT Rules 2016 upon its constitution of this Tribunal have been framed by the Central Government - learned counsel for the applicant in this connection as evident from the submission made by him is trying to project a view that what is sought before this Tribunal is only a procedural review in view of certain procedural lapses which have occasioned as evident from the application and not of a substantial review based on the merits of the petition and that only under the later case namely substantial review when it is sought for from this Tribunal it could not exercise its inherent powers whereas in the case of the former namely a procedural review it is within the scope and ambit of powers of this Tribunal being an adjudicating authority. A duty is cast upon the company namely the CD under the provisions of Companies Act 2013 to communicate any change in the registered office address from one place to other in the requisite form to the concerned ROC and if the company has not chosen to communicate with the concerned ROC in this case ROC Jaipur neither the Financial Creditor nor this Tribunal can be blamed for its own inaction and it has to deal with the consequences arising out of it. This cannot be considered as a procedural lapse on the part of the Tribunal nor on the part of the Financial Creditor which can lead to a procedural review as sought to have been exercised by NCLT Bench Calcutta in the decision cited on behalf of the applicant company under the facts and circumstances stated therein. There are no procedural lapses on the part of this Tribunal exercising its powers in passing the order dated 08.03.2019 - application dismissed.
Issues Involved:
1. Restoration of Company Petition and CIRP initiation. 2. Procedural lapses and address change of the Corporate Debtor. 3. Tribunal's power to set aside ex-parte CIRP orders. 4. Review and recall of final orders under IBC, 2016. 5. Procedural review versus substantial review. 6. Compliance with statutory requirements for address change. 7. Adherence to timelines under IBC, 2016. Issue-wise Analysis: 1. Restoration of Company Petition and CIRP Initiation: The Corporate Debtor filed an application seeking restoration of the Company Petition after an order of admission was passed by the Tribunal initiating the Corporate Insolvency Resolution Process (CIRP) against it on 08.03.2019, based on a petition by the Financial Creditor. The Corporate Debtor acknowledged the housing loan facility of ?1,06,20,000/- and the repossession of the mortgaged property by the Financial Creditor after the account was declared a non-performing asset (NPA). 2. Procedural Lapses and Address Change of the Corporate Debtor: The Corporate Debtor argued that it did not receive any notice from the Tribunal due to a change in its registered office address, which occurred after an eviction notice from the landlord. The new address was not communicated to statutory authorities or business parties. The Tribunal noted that the Corporate Debtor failed to inform the Registrar of Companies (ROC) about the change, which is a statutory requirement under the Companies Act, 2013. 3. Tribunal's Power to Set Aside Ex-parte CIRP Orders: The Corporate Debtor relied on an order from the NCLT Kolkata Bench, arguing that the Tribunal has the power to set aside ex-parte CIRP orders based on procedural lapses. The Tribunal, however, emphasized that the NCLT Rules, 2016, and the Companies Act, 2013, do not grant such powers for substantial reviews based on merits. 4. Review and Recall of Final Orders under IBC, 2016: The Financial Creditor contended that the Tribunal lacks the power to review or recall final orders under the IBC, 2016, as established by consistent rulings and the absence of such provisions in the IBC. The Tribunal upheld this view, referencing judgments from the NCLAT and the Allahabad High Court, which affirmed that procedural reviews are only permissible for procedural defects or fraud. 5. Procedural Review versus Substantial Review: The Corporate Debtor sought a procedural review, claiming procedural lapses in the notice delivery due to the address change. The Tribunal rejected this argument, stating that the failure to update the registered office address with the ROC was the Corporate Debtor's responsibility and not a procedural lapse by the Tribunal or the Financial Creditor. 6. Compliance with Statutory Requirements for Address Change: The Tribunal highlighted the Corporate Debtor's duty to communicate any change in the registered office address to the ROC, as mandated by the Companies Act, 2013. The Tribunal concluded that the Corporate Debtor's failure to comply with this requirement cannot be considered a procedural lapse warranting a review. 7. Adherence to Timelines under IBC, 2016: The Tribunal reiterated the importance of adhering to the strict timelines under the IBC, 2016, as emphasized by the Supreme Court in the Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd. case. The Tribunal noted that the present application by the Corporate Debtor was an attempt to delay the CIRP process and dismissed it with a cost of ?25,000/- to be paid to the Prime Minister's National Relief Fund within two weeks.
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