2023 (12) TMI 1150 - AT - Insolvency and Bankruptcy

Violation of principles of natural justice - observations against the erstwhile Liquidator / the Appellant - Impugned Order was passed in the absence of appellant - whether the Adjudicating Authority was justified in making some observations against the erstwhile Liquidator / the Appellant herein, and directing the Registry to forward a copy of the Compliance Affidavit and report of the Court Commissioner to IBBI? - HELD THAT - The chronology of dates and events establishes that the Appellant was present and heard on several dates specifically regarding the issue on hand. It is pertinent to mention that when the Advocate Commissioner was appointed to facilitate the handover of the documents and implement the Order of the Adjudicating Authority regarding the transition of the control and custody of the statements, records and assets of the Corporate Debtor Company, there was no whisper of protest by the Appellant herein or any bonafide submission before the Adjudicating Authority that the transition would be done within the time frame given by the Adjudicating Authority. The fact that one weeks time was given and thereafter, the Adjudicating Authority had directed both the parties to meet, cooperate and implement the Order is not denied - the Appellant was very much present for all previous hearings, relevant to the matter on hand, the Advocate Commissioner was appointed only on account of the situation which has arisen based on the non-handing over of the said documents to the new Liquidator / First Respondent, and therefore, his contention that Principles of Natural Justice was not adhered to, is untenable. There are no illegality or infirmity in the Impugned Order - appeal dismissed.

Summary

Issues involved:
The challenge in this appeal is to the Impugned Order dated 28.04.2023 passed by the 'Adjudicating Authority', National Company Law Tribunal, Chennai Bench-II, in IA/755/2022 in CP/1307/IB/2018, involving observations against the erstwhile Liquidator and the direction to forward compliance affidavit and report to IBBI.

Observations against the Erstwhile Liquidator:
The Appellant, the erstwhile Liquidator, contended that the Order was passed without giving him an opportunity to be heard, emphasizing delays in uploading the Order and handover process. The Advocate Commissioner's report was allegedly overlooked by the Adjudicating Authority, leading to adverse observations. The Appellant raised concerns about the new Liquidator's conduct and the fee increase for the Advocate Commissioner.

Compliance and Handover Process:
The new Liquidator sought compliance with the Order for handover of documents, highlighting the Appellant's non-compliance and selective document submission. The appointment of the Advocate Commissioner aimed to facilitate the handover process, with reports indicating cooperation from the new Liquidator's staff. The Adjudicating Authority dismissed the Appellant's claims of lack of cooperation and questioned the necessity of the fee increase for the Advocate Commissioner.

Principles of Natural Justice and Adherence to Orders:
The Appellant argued a violation of Principles of Natural Justice due to the passing of the Impugned Order in his absence. However, a review of the hearing dates and events showed the Appellant's presence and involvement in the proceedings related to the handover issue. The Adjudicating Authority's decision was based on the Appellant's actions and responses during the process, leading to the dismissal of the appeal.

Conclusion:
The National Company Law Appellate Tribunal upheld the Impugned Order, finding no illegality or infirmity in the decision. The Appellant was advised to address any further concerns before the IBBI, with no costs imposed on the parties.