2020 (1) TMI 1444 - Tri - Companies Law

Validity of ex-parte order - Principles of Natural Justice - notice by way of e-mail was served - e-mail ID was not in use and therefore notice issued by e-mail skipped the attention of the Corporate Debtor - HELD THAT - The reasons submitted on the side of the Corporate Debtor are not at all satisfactory for passing an order for setting aside the ex parte order. However in order to give an opportunity to defend the case as well as to have a decision on merit we are allowing the application provided a cost of 1 Lakh to be payable within 10 days to the Operational Creditor and file the reply affidavit along with the payment of cost at the Registry within 10 days from today by serving copy of the reply affidavit to the other side. If cost is not paid along with the reply affidavit this application stands dismissed. List the matter for hearing on 03/02/2020.

Summary

Issues: Setting aside an ex parte order due to failure of notice service.

In the judgment delivered by the National Company Law Tribunal, Kolkata Bench, the issue at hand was the setting aside of an ex parte order dated 20/12/2019 due to the failure of notice service upon the Corporate Debtor. The record indicated that notice was served via e-mail and post, with the e-mail notice being missed by the Corporate Debtor as the e-mail ID was not in use. The Director of the Corporate Debtor had overlooked the postal service due to personal engagements related to his daughter's marriage. The Tribunal found the reasons provided by the Corporate Debtor unsatisfactory for setting aside the ex parte order. However, to ensure a fair opportunity for defense and decision on merit, the Tribunal allowed the application on the condition that a cost of ?1 Lakh be paid to the Operational Creditor within 10 days, along with filing a reply affidavit at the Registry within the same timeframe. Failure to pay the cost along with the reply affidavit would result in the dismissal of the application.

Moreover, if the cost was paid and the reply affidavit filed as directed, the Operational Creditor was required to file a rejoinder within 7 days of receiving the reply affidavit. The Tribunal emphasized that no further opportunity to file a rejoinder would be granted. The matter was listed for hearing on 03/02/2020, indicating a clear timeline for the subsequent legal proceedings in the case. The judgment highlighted the importance of proper notice service and the consequences of failing to adhere to procedural requirements in legal matters, underscoring the significance of timely and diligent communication in legal proceedings.