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2022 (7) TMI 147 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - NCLT rejected the application for non-appearance - Corporate Debtor failed to make repayment of its dues - Operational Creditors - service of valid demand notice - stand of the Appellant is that the Adjudicating Authority had failed to consider that the Appellant was prevented by sufficient cause namely Technical Issue / Connectivity Issue at the time of calling the matter in virtual hearing - violation of principles of natural justice - scope of the term sufficient cause - HELD THAT - It comes to be known that on 18.02.2021, the Applicant/Appellant because of his failure to appear before the Adjudicating Authority, the case was dismissed for Non-Prosecution. On 07.04.2021, the Restoration Application was filed and that the case was posted for hearing on 21.04.2021, where a Counsel of the Applicant/Appellant appeared and failed to address any argument. But the Respondent made the argument that the Application filed was defective on various grounds and time was granted to the Respondent to file counter. It is significant for this Appellate Tribunal to point out that the Restoration Application is completely mentioned the reason as to why the adjournment was requested on 24.09.2021 and what for, the proceedings before the Adjudicating Authority were not conducted by the Appellant/Applicant on earlier hearings. The Respondent projects a plea that the total claim of the Appellant/Applicant is less than Rs.1 Crore, threshold limit and the I B Code, 2016, is utilised as a Money Recovery Fora, by the Applicant/Appellant which is impermissible in law - It is to be pointed out that the plea of Restoration/Condonation of Delay is not a matter of right. The term Sufficient Cause is a circumstance to be taken into account in exercising discretion by a Tribunal/Court of Law. No wonder, the Tribunal cannot determine the aspect of Sufficiency of Cause dehors the facts pleaded and made out by a Party. Where Bonafides are absent, there can be no Sufficient Cause for allowing the Restoration Application by the Tribunal. In Law, Sufficient Cause is not different from Good Cause. A Party who is not vigilant may not get a second opportunity. Mere absence of the Learned Counsel or a Pleader or that he is engaged elsewhere or he was engaged or in another Court is not a good reason for Restoration. Indeed, acceptability of an Explanation is the criteria for allowing a Restoration Application projected by a Party. If there is inaction, want of Bonafide, which is imputable to the Applicant/Appellant, then the Restoration Application is not to be allowed by a Tribunal or by a Court of Law. Of course, the Tribunal is to decide the Restoration Application on merits. It must be remembered that time is precious and a wasted time will never come back again or revisit in the considered opinion of this Tribunal. - In the instant case, on behalf of the Applicant/Appellant, a Demand Notice dated 02.04.2019 was addressed to the Respondent demanding a sum of Rs.13,49,016/-, being the sum which was the defaulted one. Furthermore, the Debt was stated to be pending from the Financial Year 2011-2012 and it is continuing one, according to the Applicant/Appellant. This Tribunal, on the basis of the facts and circumstances of the present case is not inclined to take a liberal approach in allowing the application on the file of the Adjudicating Authority (National Company Law Tribunal, Chennai Bench) by extending its Judicial Arm of Generosity, when Bonafides are very much conspicuously absent. Appeal dismissed.
Issues Involved:
1. Restoration of dismissed application due to non-prosecution. 2. Sufficiency of cause for non-appearance. 3. Adherence to principles of natural justice. 4. Validity of demand notice and claim amount. 5. Application of limitation period on claims. 6. Use of IBC as a money recovery forum. Issue-Wise Detailed Analysis: 1. Restoration of Dismissed Application Due to Non-Prosecution: The Appellant, an Operational Creditor, challenged the impugned order dated 02.11.2021, which dismissed their application for restoration of IBA/358/2020. The original application was dismissed on 08.02.2021 due to non-prosecution. The Appellant argued that the non-appearance was due to connectivity issues during the virtual hearing on 18.02.2021. 2. Sufficiency of Cause for Non-Appearance: The Appellant contended that the Adjudicating Authority failed to consider the sufficient cause (technical/connectivity issues) for their non-appearance. The Appellant's counsel also cited being occupied in another court as a reason for non-appearance on subsequent dates. The Tribunal emphasized that mere absence of counsel or engagement in another court is not a sufficient reason for restoration. The Tribunal concluded that the Appellant failed to show sufficient cause for non-appearance and repeated adjournments. 3. Adherence to Principles of Natural Justice: The Appellant argued that the Adjudicating Authority ignored valid submissions and failed to adhere to principles of natural justice. The Tribunal noted that the Restoration Application was defective and the Appellant failed to address arguments on multiple occasions. The Tribunal found no merit in the Appellant's claim of violation of natural justice principles. 4. Validity of Demand Notice and Claim Amount: The Appellant issued a demand notice on 02.04.2019 for Rs.13,49,016/- under Section 8 of the IBC, 2016. The Respondent replied on 12.04.2019, disputing the claim and alleging false allegations. The Tribunal observed that the demand notice and claim amount were disputed by the Respondent, and the Appellant failed to substantiate the claim during the hearings. 5. Application of Limitation Period on Claims: The Respondent argued that the claims were time-barred, with dues extending from 2011 to 2018. The Tribunal noted that the Appellant's claims included invoices from periods beyond the limitation period, making them improper and time-barred. 6. Use of IBC as a Money Recovery Forum: The Respondent contended that the Appellant was using the IBC as a money recovery forum, which is impermissible. The Tribunal agreed, emphasizing that the IBC is not meant for money recovery but for insolvency resolution. Appellate Tribunal's Decision: The Tribunal concluded that the Appellant failed to show sufficient cause for non-appearance and repeated adjournments. The Restoration Application was found defective, and the reasons provided for non-appearance were not justifiable. The Tribunal dismissed the appeal, stating that the Appellant's approach lacked bonafides and the IBC was being misused as a money recovery forum. Result: The Company Appeal (AT) (CH) (INS) No. 33 of 2022 was dismissed without costs.
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