2022 (10) TMI 929 - AT - Insolvency and Bankruptcy

Recovery of dues - onus on the Applicant to satisfy that there is pre-existing dispute or not - various meetings between both parties were held, to arrive at amicable settlement, but respondent has not filed reply - HELD THAT - In reality, the established fact is that, the Respondent had filed a Reply, before the Adjudicating Authority, to the main Petition and apart from that, the Learned Counsel was heard at the time of Reserving the Orders, in the main Petition. When the fact situation is that, the Respondent had filed its Counter/ Reply / Response, before the Adjudicating Authority, to the main Petition, the Contra observation made by the Adjudicating Authority, Viz., that the Respondent had not filed its Reply is clearly an erroneous one, and there appears to be a Costly Lapse / Omission, on the part of the Adjudicating Authority in not noticing the filing of Counter / Reply, in a proper and real perspective. Therefore, this Tribunal, without going in to the merits of the Controversies/ Disputes, between the respective Parties and not delving deep in to the same, without any Haziness, simpliciter comes to an inevitable, inescapable and irresistible conclusion that the Adjudicating Authority (National Company Law Tribunal, Division Bench II, Chennai), had committed a serious Material Irregularity and Patent Illegality in passing the impugned order and this Appellate Tribunal, to prevent an Aberration of Justice and in furtherance of Substantial Cause of Justice, sets aside. The matter is remitted back to the Adjudicating Authority (National Company Law Tribunal, Division Bench II, Chennai) to restore application filed by the Appellant / Operational Creditor / Petitioner, to its file, within two weeks from the date of pronouncement of Judgment.

Summary

Issues involved:
Challenge to the correctness, validity, propriety, and legality of the impugned order dated 30.04.2021 by the Appellant / Operational Creditor. Dispute regarding the Respondent's filing of Counter / Reply / Response to the main Petition IBA/1297/2019 before the Adjudicating Authority.

Analysis:

Issue 1: Challenge to the impugned order
The Appellant, an Operational Creditor, appealed against the impugned order dated 30.04.2021 passed by the Adjudicating Authority, National Company Law Tribunal, Division Bench - II, Chennai. The Appellant, dissatisfied with the order, approached the Appellate Tribunal, claiming that the order was incorrect in the eye of the law. The Appellant contended that the Adjudicating Authority dismissed the Application without costs, which the Appellant deemed as erroneous. The Appellate Tribunal, after thorough examination, found that the Adjudicating Authority had committed a serious material irregularity and patent illegality in passing the impugned order. Consequently, the Appellate Tribunal set aside the impugned order, allowing the appeal and remitting the matter back to the Adjudicating Authority for further proceedings.

Issue 2: Dispute over Respondent's filing of Counter / Reply / Response
The dispute arose over the Respondent's filing of Counter / Reply / Response to the main Petition IBA/1297/2019 before the Adjudicating Authority. The Appellant's Counsel argued that the Respondent had indeed filed the required response, contrary to the Adjudicating Authority's observation that no reply was submitted. The Appellate Tribunal, upon review, confirmed that the Respondent had filed a reply before the Adjudicating Authority, which the Respondent's Counsel did not dispute during the appeal proceedings. The Appellate Tribunal noted the Respondent's submission of a reply and the hearing of arguments during the order reservation process. The Adjudicating Authority's failure to acknowledge the Respondent's filing of the reply led to a serious miscarriage of justice, necessitating the Appellate Tribunal's intervention to rectify the error. Consequently, the Appellate Tribunal found the Adjudicating Authority's observation regarding the Respondent's failure to file a reply as erroneous and set aside the impugned order, directing the matter's restoration for further proceedings.

In conclusion, the Appellate Tribunal allowed the appeal, setting aside the impugned order dated 30.04.2021 and remitting the case back to the Adjudicating Authority for a fair and just determination based on the principles of natural justice and in accordance with the law. Both parties were granted the liberty to present their case before the Adjudicating Authority, emphasizing the importance of a reasoned order on merits uninfluenced by previous observations made by the Appellate Tribunal.