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2022 (2) TMI 548 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues or not - Financial Creditors - existence of debt and dispute or not - HELD THAT - The Ld. Adjudicating Authority passed the order in VEJAS POWER PROJECTS LIMITED VERSUS VAAYU INFRASTRUCTURE LLP. 2019 (8) TMI 1786 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI and admitted the petition filed by the Respondent No. 2 herein (Financial Creditor), 'Vejas Power Project Ltd.' under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the Appellant herein (Corporate Debtor), 'Vaayu Infrastructure LLP' and further while dismissing the Application filed by the Appellant herein vide order dated 16.09.2019 in MA 2984/2019 MA 3061/2019 in C.P. 1951(IB) (MB)/2019, the Ld. Adjudicating Authority has not considered the provisions of Rules 37, 49 and 150 of the NCLT Rules. In view of the above, the impugned orders dated 30.08.2019 and 16.09.2019 are hereby set aside and the matter is remitted back to the Ld. Adjudicating Authority (National Company Law Tribunal), Mumbai Bench with a request to hear the parties including the Appellant herein and Respondent No. 1 herein about his fee and expenses for the period he has worked as IRP and pass appropriate orders within six weeks from the date of receipt of this judgment. Registry to upload the Judgment on the website of this Appellate Tribunal and send the copy of this Judgment to the Ld. Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, forthwith.
Issues Involved:
1. Validity of the orders dated 30.08.2019 and 16.09.2019 passed by the NCLT, Mumbai Bench. 2. Alleged denial of opportunity to the Corporate Debtor to be heard. 3. Interpretation and application of relevant provisions of the Insolvency and Bankruptcy Code, 2016 (IBC) and NCLT Rules. 4. Whether the transactions in question were sham and fraudulent. 5. Jurisdiction and power of the NCLT to recall ex-parte orders. Issue-wise Detailed Analysis: 1. Validity of the Orders Dated 30.08.2019 and 16.09.2019: The Appellant challenged the orders dated 30.08.2019 and 16.09.2019 passed by the NCLT, Mumbai Bench, which admitted the petition filed by the Financial Creditor under Section 7 of the IBC and initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Appellant argued that these orders were passed without considering relevant provisions of law and in violation of principles of natural justice. 2. Alleged Denial of Opportunity to the Corporate Debtor to be Heard: The Appellant contended that the Corporate Debtor was denied an opportunity to be heard and to file its reply before the NCLT, leading to wrongful initiation of proceedings under Section 7 of the IBC. The chronology of events presented by the Appellant highlighted that the Corporate Debtor was not properly informed of the hearing dates and was not given sufficient time to respond. 3. Interpretation and Application of Relevant Provisions of the IBC and NCLT Rules: The Appellant argued that the NCLT failed to exercise its power and jurisdiction as per the relevant provisions of the IBC and NCLT Rules, particularly Rules 37, 49, and 150. The Appellant cited Rule 49, which allows the Tribunal to set aside an ex-parte order if sufficient cause is shown. The Appellant also referred to judgments by the Appellate Tribunal supporting the power of the NCLT to recall ex-parte orders. 4. Whether the Transactions in Question Were Sham and Fraudulent: The Appellant claimed that the transactions portrayed as loan/debt by the Financial Creditor were sham and fraudulent. However, due to the lack of opportunity to present its case, the Corporate Debtor could not adjudicate upon these alleged sham transactions. 5. Jurisdiction and Power of the NCLT to Recall Ex-parte Orders: The Appellant emphasized that the NCLT has the power to recall ex-parte orders under Rule 49(2) of the NCLT Rules if the respondent shows sufficient cause for non-appearance. The Appellant argued that the NCLT failed to exercise this jurisdiction, causing prejudice to the Corporate Debtor. Findings: The Appellate Tribunal found that the NCLT, Mumbai Bench, did not consider the provisions of Rules 37, 49, and 150 of the NCLT Rules while passing the impugned orders. Consequently, the orders dated 30.08.2019 and 16.09.2019 were set aside. The matter was remitted back to the NCLT, Mumbai Bench, with instructions to hear the parties, including the Appellant and Respondent No. 1, regarding the fee and expenses of the Interim Resolution Professional (IRP), and to pass appropriate orders within six weeks. Conclusion: The Appellate Tribunal directed the NCLT, Mumbai Bench, to re-evaluate the case, ensuring that the Corporate Debtor is given a fair opportunity to present its case, and to pass a fresh order considering all relevant provisions and submissions.
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