2022 (6) TMI 12 - AT - Insolvency and Bankruptcy

CIRP - Validity of order of NCLT admitting the application, bearing the signature of one member only -Pronouncement of the order in accordance with Rule 151 and 152 of the NCLT Rules or not - HELD THAT - The order clearly mentions that the order was pronounced under Rule 151 of the NCLT Rules, 2016 with consent of the other Member. There are no error in the pronouncement of order by one Member with consent of the other Member of the Bench under Rule 151 of the NCLT Rules. Rule 152(4) on which reliance is placed is with regard to the matter where the order cannot be signed by reason of death, retirement or resignation or for any other reason by any one of the Members of the Bench who heard the case. Present is not the case where order cannot be signed by reason of death, retirement or resignation or for any other reason. Present is the case where the Technical Member was to be available after a couple of weeks to sign the order and with his consent the order was pronounced. There is no occasion for application of Rule 152(4). The Appeal is dismissed.

Summary

Issues:
1. Admissibility of application under Section 7 challenged based on NCLT Rules.
2. Interpretation of Rule 151 and Rule 152 of the NCLT Rules, 2016.
3. Validity of order pronounced by one member of the Bench with consent of the other member.
4. Application of Rule 152(4) regarding signing of orders.

Analysis:
1. The appeal was filed against the admission of an application under Section 7, with the appellant challenging the order's pronouncement under Rule 151 and Rule 152 of the NCLT Rules. The contention was that the order was signed by only one member, raising concerns about compliance with the rules.

2. Rule 151 allows any member of the Bench to pronounce the order on behalf of the Bench. The order in question was signed by one member, indicating that the Technical Member was unavailable. The order explicitly mentioned that it was pronounced with the consent of the other member, demonstrating compliance with Rule 151 of the NCLT Rules.

3. Rule 152 deals with authorizing a member to pronounce an order when the original members are unavailable. In this case, Rule 152(4) was cited, but it was clarified that the Technical Member was temporarily unavailable, not permanently absent. The order was pronounced with his consent, and there was no need to apply Rule 152(4) as the situation did not involve reasons like death, retirement, or resignation.

4. The Tribunal found no error in the pronouncement of the order by one member with the consent of the other member under Rule 151. The appeal was dismissed as there was a clear debt and default, which was undisputed in the Section 7 application. The Tribunal concluded that Rule 152(4) was not applicable in this scenario, and the order was validly pronounced under Rule 151.

In summary, the judgment upheld the validity of the order pronounced by one member of the Bench with the consent of the other member, in compliance with Rule 151 of the NCLT Rules. The appeal challenging the order's admissibility under Section 7 was dismissed due to the absence of any merit, as the debt and default were established, and the application of Rule 152(4) was deemed unnecessary in the circumstances of the case.