2022 (11) TMI 404 - AT - Insolvency and Bankruptcy

Seeking recall of order - whether the order cannot be entertained for the reason that even on the previous occasions the applicant had not evinced any interest in prosecuting the said application? - HELD THAT - This Tribunal is of the considered view that an opportunity ought to have been provided by the Adjudicating Authority (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad) to the Learned Counsel for the Appellant/Bank/Petitioner, because of the fact, that the that One Officer of the Bank, who represented on behalf of the Financial Creditor, logged in, had sought time, and, therefore, this Tribunal opines that the Adjudicating Authority (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad), obviously, had adopted a pedantic and an hyper-technical approach, because of the fact, that no progress was made in the subject matter and added further, that the Tribunal went on to observe that even on this date, viz., 21.02.2022 given by it was exclusively to proceed with the matter. It must be borne in mind that, if the Restoration Application preferred by the Party / Person is dismissed, at the threshold, then, there is a possibility, that even the meritorious case / matter may be thrown out, at the nascent stage. However, if the Restoration Application is Allowed by the Adjudicating Authority / Tribunal by resorting a liberal approach, then, there is every likelihood that the Main Matter shall be taken up for Hearing and the Case / Cause is decided on Merits, of course, after providing an adequate Opportunity of Hearing and also by observing the Principles of Natural Justice. This Tribunal comes to a Resultant Conclusion that the Impugned Order of disposal of application passed by the Adjudicating Authority (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad) is clearly unsustainable in the eye of Law - Application allowed.

Summary

Issues:
1. Dismissal of an interlocutory application by the Adjudicating Authority.
2. Appeal against the dismissal order.
3. Consideration of restoration application.
4. Judicial review of the Adjudicating Authority's decision.

Issue 1: Dismissal of Interlocutory Application:
The Adjudicating Authority dismissed an interlocutory application (IA) filed by a financial creditor, citing lack of interest in prosecuting the application. The Tribunal noted that the IA was dismissed due to non-prosecution, leading to the appeal against this decision.

Issue 2: Appeal Against Dismissal Order:
The appellant, representing the financial creditor, contested the dismissal of the IA by the Adjudicating Authority. The appellant argued that the Authority failed to appreciate the significance of the IA and the involvement of public money. The Tribunal found that the dismissal was unjustified and unsustainable in the eyes of the law due to technicalities.

Issue 3: Consideration of Restoration Application:
The Tribunal emphasized the importance of allowing restoration applications to prevent meritorious cases from being dismissed prematurely. It highlighted the need for a liberal approach by the Adjudicating Authority to ensure that matters are heard on their merits, following principles of natural justice.

Issue 4: Judicial Review of Authority's Decision:
The Tribunal conducted a judicial review of the Adjudicating Authority's decision and concluded that it had taken a hyper-technical and pedantic approach. The Tribunal set aside the dismissal order, directing the Authority to restore the IA to its file and provide an opportunity for responses from the other party within a specified timeline.

In conclusion, the Tribunal allowed the appeal, emphasizing the need for a fair and just disposition of the IA by the Adjudicating Authority, free from any influence from the Tribunal's observations. The parties were granted liberty to present factual and legal arguments before the Authority for a lawful and just decision.