2024 (1) TMI 253 - AT - Insolvency and Bankruptcy

Recall of an order - seeking removal of the Appellant as RP - Application filed on the ground that RP in spite of request has not convened the meeting, hence he may be removed - HELD THAT - On looking into Rule 49, sub-rule (2), it is clear that ex-parte order can be recalled on two grounds, firstly, when notice was not served or that the Respondent/ Applicant was prevented by any sufficient cause from appearing when the Application was called for hearing. The Adjudicating Authority in the impugned order, rejected the Recall Application holding that no sufficient case was shown for exercising the power under Rule 49 of the NCLT Rules, 2016. The Appellant was well aware that case was listed for hearing on 12.05.2023 and he entered appearance through Counsel, who inspite of entering his attendance in chat box, is not shown to be present. The relevant fact to be noticed is that the Appellant was well aware of the date 12.05.2023. On 12.05.2023, according to the Appellant himself, the case could not be taken up due to paucity of time and next date was fixed. The Appellant s case is that his Counsel wrongly noted the date as 08.06.2023 instead of 07.06.2023, hence, on 07.06.2023, he could not appear and the order was passed ex-parte against him - When a party appears on a date which is fixed before the Court, it is presumed that the party is well aware of the proceedings, which was taken up by the Court on the said date. On 12.05.2023, the next date fixed was 07.06.2023. In the present case, the Appellant is not denying that he was not served with the copy of the IA No.2121 of 2023, nor he denies the service of copy of Application. The fact remains that he did not file reply within the time allowed and also did not appear on 07.06.2023, when the case was taken up - the Adjudicating Authority did not commit any error in rejecting IA No.3216 of 2023. The Adjudicating Authority being satisfied that no sufficient cause has been shown for nonappearance passed the impugned order dated 12.12.2023. There are no good ground or reasons to interfere with the impugned order in this Appeal - appeal dismissed.

Summary

Issues Involved:
1. Recall of ex-parte order dated 07.06.2023.
2. Validity of the removal of the Appellant as Resolution Professional.
3. Maintainability of the appeal against the order dated 12.12.2023.

Summary:

Issue 1: Recall of ex-parte order dated 07.06.2023

The Appellant filed IA No.3216 of 2023 to recall the ex-parte order dated 07.06.2023, arguing that Rule 49 of the NCLT Rules allows for such recall if the order was passed ex-parte. The Appellant claimed that his counsel noted the wrong date (08.06.2023 instead of 07.06.2023), leading to his absence on the hearing date. The Tribunal rejected this application, stating that the Appellant's reason for non-appearance was insufficient and that the Appellant was aware of the proceedings and the requirement to file a reply but failed to do so.

Issue 2: Validity of the removal of the Appellant as Resolution Professional

The Financial Creditor (Respondent No.1) filed IA No.2121 of 2023 for the removal of the Appellant as RP, alleging non-compliance with requests to convene CoC meetings. The Tribunal issued a notice on 25.04.2023, directing the Appellant to file a reply within 10 days. The Appellant did not file the reply in time and failed to appear on 07.06.2023, leading to the ex-parte order for his removal. The Tribunal held that the Appellant's failure to convene the CoC meetings and non-compliance with procedural requirements justified his removal.

Issue 3: Maintainability of the appeal against the order dated 12.12.2023

The Respondent argued that the appeal against the order dated 12.12.2023 was not maintainable under Section 61 of the Insolvency and Bankruptcy Code, as it was not an order passed under Part II of the Code. The Tribunal, however, did not delve into this issue, focusing instead on the sufficiency of the cause for non-appearance. The Tribunal concluded that the Appellant's appeal lacked merit, as the Adjudicating Authority's decision to reject the recall application was based on relevant facts and did not warrant interference.

Conclusion:

The Tribunal dismissed the appeal, upholding the Adjudicating Authority's decision to reject the recall application and affirming the removal of the Appellant as RP. The Tribunal found no sufficient cause for the Appellant's non-appearance and non-compliance with procedural requirements.