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2023 (8) TMI 747 - AT - Insolvency and BankruptcyDirection to the Suspended Management to handover all the requisite documents/records of the Corporate Debtor to the IRP within one-week - HELD THAT - As per the Rule 49 of NCLT Rules, in case, the Appellant being the Respondent in the application who was proceeded against ex parte, could have filed an application before the same court for setting aside the impugned order by recalling the same but no such effort was made at that time rather the present appeal has been filed. It would be just and expedient if an application is filed by the Appellant in terms of Rule 49 of the Rules before the Adjudicating Authority who has passed the impugned order for the purpose of recalling the same on the ground that the Appellant was never served with the notice of the court and the email was only computer generated, therefore, it does not fall within the ambit of due notice as required by the Rules. The present appeal is hereby disposed of, without commenting on the merits of the case and liberty is extended to the Appellant to file an appropriate application, in terms of Rule 49 of the Rules, for recalling the impugned order.
Issues Involved:
The issues involved in the judgment are the validity of the order passed by the Adjudicating Authority under Section 19 of the Insolvency and Bankruptcy Code, 2016, regarding the handover of documents/records of the Corporate Debtor by the Suspended Management to the IRP, and the absence of proper notice served to the Appellant. Validity of the Order under Section 19 of the Insolvency and Bankruptcy Code, 2016: The Appellants, who are Members of the Suspended Board of Directors of the Corporate Debtor, challenged the order passed by the Adjudicating Authority directing them to hand over all necessary documents/records to the IRP within one week. The Appellants contended that the order was unsustainable as they were not served with proper notice of the application. The Counsel for the Appellant highlighted the procedural lapses in serving the notice as required by the NCLT Rules, specifically Rule 37, 38, and 105. The Appellant argued that the impugned order was invalid due to the lack of proper notice, as per the rules governing such proceedings. Procedural Lapses in Notice and Service: The Counsel for the Appellant emphasized the necessity of issuing proper notice in accordance with Rule 37 & 38 of the NCLT Rules, coupled with Rule 105, which mandates serving a copy of the application along with the notice. The Appellant's Counsel pointed out that the email notification provided to the Appellant did not meet the legal requirements for serving notice in interlocutory applications. Additionally, Rule 49 of the NCLT Rules was referred to, which allows for ex-parte hearings but also provides a mechanism for setting aside such orders if notice was not duly served or if there was a valid reason for non-appearance. The Appellant's failure to take immediate action to set aside the ex-parte order was noted, and it was suggested that the Appellant should have followed the procedure outlined in Rule 49 before filing the appeal. Court's Decision and Directions: After considering the arguments presented by the Appellant's Counsel, the Court decided that an application should be filed by the Appellant before the Adjudicating Authority to recall the impugned order based on the grounds of improper notice. The Court did not delve into the merits of the case but directed the Appellant to follow the procedure outlined in Rule 49 of the NCLT Rules. The appeal was disposed of with the liberty granted to the Appellant to file the appropriate application before the Adjudicating Authority. The Court set a date for the Appellant to appear before the Adjudicating Authority and instructed that if such an application is filed, it should be decided expeditiously within 15 days, following a speaking order and after giving notice to the opposite party. Separate Judgement: It is noteworthy that the judgment was delivered by Justice Rakesh Kumar Jain, Member (Judicial), and Naresh Salecha, Member (Technical) of the National Company Law Appellate Tribunal, Principal Bench, New Delhi.
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