2018 (10) TMI 912 - AT - Insolvency and Bankruptcy

Initiation of Corporate Insolvency Resolution Process - Held that - While we accept that the appellant cannot raise any objection with regard to the evidence if filed by the respondent (Financial Creditor), but we are of the opinion that before giving hearing to the appellant (Corporate Debtor), Adjudicating Authority should have given an opportunity to file a reply in view of the decision of the Hon ble Supreme Court in Innoventive Industries Ltd. Vs. ICICI Bank and Ors. 2017 (9) TMI 58 - SUPREME COURT OF INDIA . In the said judgment, Hon ble Supreme Court in paragraph 28 etc., has allowed to the Corporate Debtor to raise the objection. The Adjudicating Authority having failed to notice the aforesaid provision, we set aside the impugned order. If any reply is filed by the appellant within ten days, the Adjudicating Authority will take into consideration the same before passing order of admission or rejection of the application under Section 7 of the I&B Code. As we have granted ten days time to the appellant to file reply, we may also grant one week s time to the respondent (Financial Creditor) to file rejoinder.

Summary

Issues: Violation of natural justice in prohibiting objections by Corporate Debtor, failure to provide opportunity to file a reply before passing order.

In the judgment delivered by the National Company Law Appellate Tribunal, the respondent, 'Srei Equipment Finance Limited,' filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against the appellant, 'Wianxx Impex Pvt. Ltd.' The Adjudicating Authority's order dated 30th July, 2018, was challenged by the appellant, contending that the Corporate Debtor was prohibited from filing objections, which was seen as a violation of natural justice. The respondent argued that an affidavit of compliance was requested to bring certain evidence on record, hence the order to not file objections. The Tribunal acknowledged that the Corporate Debtor cannot object to evidence filed by the Financial Creditor but emphasized the need for providing an opportunity to file a reply before a hearing, citing the decision of the Supreme Court in "Innoventive Industries Ltd. Vs. ICICI Bank and Ors., - (2018) 1 SCC 407." The Tribunal set aside the impugned order due to the Adjudicating Authority's failure to consider this provision, granting the appellant ten days to file a reply. Additionally, one week's time was granted to the respondent to file a rejoinder. The appeal was disposed of with these observations.