2022 (5) TMI 1364 - AT - Insolvency and Bankruptcy

Service of limited notice - copy of the Application under Section 95(1) was duly served or not - HELD THAT - In the present case, the Appellant has been served copy of the Application under Section 95(1) as per the requirements of the statute and since the Appellant was well aware of the date and appeared on the date before the Adjudicating Authority, we see no reason to direct for issue of any limited notice to the Appellant, he being aware of the proceedings. The stage of admission or rejection of the Application has not yet arrived and at the stage of admission or rejection of the Application, the Appellant can raise all the objections before the Adjudicating Authority opposing the admission of the Application. It is for the Adjudicating Authority to consider the pleas of both the parties and pass appropriate order as contemplated under Section 100 of the Code. Learned Counsel for the Appellant seeks liberty to submit representation before the Resolution Professional with regard to the facts of the Appellant s case. It is open for the Appellant to give Application/ Representation to the Resolution Professional within one week from today. Appeal disposed off.

Summary

Issues:
- Appeal against order appointing Resolution Professional
- Limited notice to the Appellant
- Compliance with statutory requirements
- Right to raise objections before the Adjudicating Authority
- Representation submission before the Resolution Professional

Analysis:
1. Appeal against order appointing Resolution Professional:
The appeal was filed against the order appointing the Resolution Professional by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016. The Appellant argued that limited notice was not issued to them, even though they were aware of the proceedings and had appeared before the Adjudicating Authority. The Respondent contended that all necessary documents were duly served, and the Resolution Professional was appointed based on the application filed. The Tribunal reviewed the submissions and held that the stage of admission or rejection of the application had not yet arrived, allowing the Appellant to raise objections at the appropriate time. The Tribunal emphasized that it was not expressing any opinion on the case's merits, leaving it to the Adjudicating Authority to decide after considering the Resolution Professional's report.

2. Limited notice to the Appellant:
The Appellant argued that they were not issued a limited notice by the Adjudicating Authority despite being served with the application under Section 95(1). The Tribunal referred to a previous judgment highlighting the requirement for limited notice to the Corporate Debtor before the admission or rejection stage. However, in the present case, since the Appellant was aware of the proceedings and had appeared before the Adjudicating Authority, the Tribunal found no reason to direct the issuance of any additional notice. The Tribunal stressed that the Appellant could raise objections during the admission or rejection stage as per Section 100 of the Code.

3. Compliance with statutory requirements:
The Tribunal examined the statutory provisions, including Section 95(5) and relevant rules, to determine the requirements for serving the application to the Debtor. It was noted that serving an advance copy was not contemplated, and the procedure mandated serving a copy of the submitted application to provide notice to the Personal Guarantor. The Tribunal emphasized the importance of following the principles of natural justice and the procedural steps outlined in the Code for insolvency proceedings.

4. Right to raise objections before the Adjudicating Authority:
The Tribunal reiterated the Appellant's right to raise objections before the Adjudicating Authority during the admission or rejection stage of the application. It clarified that the Adjudicating Authority would consider the arguments presented by both parties and make an appropriate decision based on the report submitted by the Resolution Professional under Section 100 of the Code.

5. Representation submission before the Resolution Professional:
The Appellant sought permission to submit a representation to the Resolution Professional regarding the facts of their case. The Tribunal granted the Appellant the liberty to provide an application or representation to the Resolution Professional within a specified timeframe. It was emphasized that the Resolution Professional would determine the necessity of any additional reports based on the Appellant's submission.

In conclusion, the Tribunal disposed of the appeal with the outlined observations, maintaining the procedural integrity of the insolvency proceedings and upholding the rights of the parties involved.