2021 (2) TMI 888 - Tri - Insolvency and Bankruptcy

Maintainability of petition - service of notice to Corporate Debtor - Rule 49(2) of NCLT Rules, 2016 - HELD THAT - It appears that the petition was admitted by this Adjudicating Authority after taking the proper measure to serve the notice of hearing to the Corporate Debtor. Moreover, multiple times notice has been sent to the Corporate Debtor but, the corporate Debtor refused to accept the notice which was itself sufficient to admit the matter in CIRP. Even after, evading the service of notice by the corporate debtor, this Authority has advised the operational creditor for paper publication which has already been made. As per Rule 49(2) of NCLT Rules, 2016, it is clear that averment made by the respondent for non-receipt of notice is not sustained as Corporate Debtor refused to accept the notice, Moreover, Paper publication has also been made. Hence, in view of this, the present application is liable to be dismissed. Further, Rule-49(2) of NCLT Rules, 2016 comes into play only when the matter is disposed of in a summary manner generally for want of prosecution. Otherwise, the said rule is applicable only for the purpose of setting aside the order of Ex-parte hearing. When the matter is decided, though Ex-parte, on mertis after due consideration and material available on record, this rule cannot be pressed into service - application dismissed.

Summary

Issues: Setting aside an ex-parte order under Rule 11 read with Rule 49 of NCLT Rules, 2016

The judgment by the National Company Law Tribunal, Indore Bench, involved an application filed for setting aside an ex-parte order dated 11.01.2021 passed by the Adjudicating Authority under Rule 11 read with Rule 49 of NCLT Rules, 2016. The Corporate Insolvency Resolution Process was initiated by an Operational Creditor under section 9 of the Insolvency and Bankruptcy Code, 2016, and admitted by the Adjudicating Authority on 11.01.2021. Despite multiple attempts to serve notice to the Corporate Debtor, who refused to accept it, the Adjudicating Authority suggested publication in two newspapers, which was duly complied with by the applicant. The Insolvency Resolution Professional (IRP) had been appointed, and the Corporate Insolvency Resolution Process (CIRP) was running smoothly. The respondent Corporate Debtor sought to quash the order based on Rule 49(2) of NCLT Rules, 2016, which allows setting aside an ex-parte order if the notice was not duly served or there was a sufficient cause for non-appearance. However, the Tribunal found that the respondent's claim of non-receipt of notice was not valid as the Corporate Debtor had refused to accept the notice, and publication had been done. Therefore, the application was dismissed. The Tribunal clarified that Rule 49(2) applies when a matter is disposed of summarily, not after due consideration, and any relief against such an order should be sought through an appeal to the NCLAT. The Tribunal emphasized that it has limited power to rectify typographical errors and cannot review orders passed on merits. Consequently, the application was dismissed, and an urgent certified copy of the order was to be issued to all concerned parties upon request and compliance with formalities.