2024 (1) TMI 41 - AT - Insolvency and Bankruptcy

Admission of application filed under Section 7 of IBC - proceeding ex-parte ignoring the reply of the Corporate Debtor - HELD THAT - The reply having been filed which was noticed by this Appellate Tribunal in order dated 27.05.2022, the Adjudicating Authority ought to have looked into the reply and even it was not on the e-portal opportunity ought to have been given to bring it on e-portal or physical copy of the reply ought to have been taken from the Corporate debtor. The Adjudicating Authority committed error in proceeding ex-parte ignoring the reply and admitting section 7 application. In result, the impugned order set aside, Section 7 application revived again before the Adjudicating Authority. The Adjudicating Authority shall fix a date after two weeks and after hearing the parties pass afresh order in accordance with law.

Summary

Issues involved:
The issues involved in this case include the compliance of orders by the Adjudicating Authority, setting aside of previous orders, ex-parte proceedings, admission of Section 7 application, and the requirement of filing replies on the e-portal.

Compliance of Orders by Adjudicating Authority:
The Adjudicating Authority had admitted the application filed under Section 7 by the respondent, leading to ex-parte proceedings against the Corporate Debtor. However, the Appellate Tribunal set aside the earlier admission order and subsequent orders, emphasizing the need for proper compliance with factual positions and procedures.

Ex-Parte Proceedings and Admission of Section 7 Application:
The Adjudicating Authority proceeded ex-parte against the Corporate Debtor despite the reply being filed. The Appellate Tribunal found that the Adjudicating Authority erred in ignoring the filed reply and admitted the Section 7 application. Consequently, the impugned order was set aside, and the Section 7 application was revived before the Adjudicating Authority.

Filing Replies on the E-Portal:
The Adjudicating Authority's decision to proceed ex-parte was based on the reply not being on the e-portal. The Appellate Tribunal noted that even though the reply was filed, an opportunity should have been given to ensure its presence on the e-portal. The Adjudicating Authority was directed to allow the reply to be brought on the e-portal or provide a physical copy from the Corporate debtor.

Appointment and Discharge of IRP:
The impugned order appointed an IRP, but following the Tribunal's decision, the IRP was discharged. The Adjudicating Authority was instructed to fix a date after two weeks for further proceedings and pass a fresh order in accordance with the law.