2020 (5) TMI 719 - Tri - Insolvency and Bankruptcy

Seeking to stay all further proceedings pursuant to ex-parte order - territorial Jurisdiction - HELD THAT - The fact of change in the Registered Office of the Corporate Debtor from the State of Telangana to the State of Andhra Pradesh was not brought to the notice of this Adjudicating Authority at any point of time during the proceedings. If any information regarding change of address was submitted by way of counter affidavit, this Adjudicating Authority would have definitely considered the same before passing any orders. The real question to be answered here is that once the order of admission of the CP(IB) No. 374/7/HDB/2019 was passed by this Adjudicating Authority, which is an appealable order under the provisions of the Code, whether this Adjudicating Authority has powers to recall and set aside the same? - It is opined that this Adjudicating Authority has no such powers under the provisions of the Code. Since the Order of Admission of the CP is an appealable order, the powers of Appellate Authority cannot be circumvented by recalling our own order. Application disposed off as not maintainable.

Summary

Issues:
1. Stay on further proceedings and setting aside of ex-parte order.
2. Jurisdiction of the National Company Law Tribunal.
3. Lack of notice and jurisdictional issues raised by the Corporate Debtor.
4. Counter arguments by the Financial Creditor.
5. Consideration of jurisdiction and recall of order by the Adjudicating Authority.

Stay on Further Proceedings and Setting Aside of Ex-parte Order:
The tribunal addressed two applications filed seeking a stay on proceedings and setting aside of an ex-parte order. The Corporate Debtor argued that no notice was served before the admission of the application under the Insolvency and Bankruptcy Code. The Corporate Debtor also raised jurisdictional issues, claiming the NCLT Amaravati Bench had jurisdiction due to its registered office in Andhra Pradesh. The Financial Creditor countered, stating proper notices were sent, and the Corporate Debtor failed to raise jurisdictional concerns in a timely manner. The tribunal noted the appealable nature of the admission order and ruled that it lacked the power to recall it, advising the Corporate Debtor to seek relief through the appropriate forum.

Jurisdiction of the National Company Law Tribunal:
The Corporate Debtor argued that the NCLT Amaravati Bench had jurisdiction to entertain the Company Petition due to its registered office in Andhra Pradesh. The Financial Creditor contended that the Corporate Debtor failed to inform about the change in the registered office address, and the issue of territorial jurisdiction should have been raised earlier. The tribunal emphasized the importance of timely raising jurisdictional issues and deemed the applications not maintainable.

Lack of Notice and Jurisdictional Issues Raised by the Corporate Debtor:
The Corporate Debtor claimed that no notice was served before the initiation of CIRP and highlighted the incorrect address in the cause title. It argued that the absence before the Adjudicating Authority was not willful and questioned the maintainability of the Company Petition due to jurisdictional concerns. The Financial Creditor countered, stating proper notices were sent, and the Corporate Debtor failed to act diligently or inform about the change in the registered office address.

Counter Arguments by the Financial Creditor:
The Financial Creditor presented counter arguments, emphasizing the efforts made to serve notices and the lack of diligence on the part of the Corporate Debtor. It highlighted the failure of the Corporate Debtor to inform about the change in the registered office address and raised objections to the jurisdictional claims made belatedly by the Corporate Debtor.

Consideration of Jurisdiction and Recall of Order by the Adjudicating Authority:
The tribunal considered the jurisdictional issues raised by the Corporate Debtor regarding the change in the registered office address. It noted the lack of timely submission of this information during proceedings and ruled that the order of admission was appealable. The tribunal concluded that it lacked the authority to recall the order and advised the Corporate Debtor to seek relief through the appropriate forum, ultimately deeming the applications not maintainable.

This detailed analysis covers the issues raised in the legal judgment, including the stay on proceedings, jurisdictional matters, lack of notice, counter arguments by the Financial Creditor, and the consideration of jurisdiction and recall of the order by the Adjudicating Authority.