2023 (11) TMI 265 - AT - Insolvency and Bankruptcy

Principles of natural justice - CIRP - Corporate debtor in liquidation - Appellant is situated in the property of Corporate debtor - mis-appreciation of the facts by the Adjudicating Authority in concluding that the Appellant was actually served and did not choose to appear - HELD THAT - The entire case of the Appellant, set up in the appeal is that the notice of the application I.A. No. 836 of 2021 should have been served at the registered office address instead of branch address. The Appellant has not denied the fact that the reply to the notice dated 26.04.2021 served by the Liquidator at the branch address was given by the branch of the Appellant. Meaning thereby, the Appellant knew about the proceedings initiated by the Liquidator which was triggered with the issuance of demand notice. Otherwise also from the perusal of the evidence on record, it is clear that service of the notice at the branch office was effected, therefore, it does not lie in the mouth of the Appellant to raise an issue that service was not effected at the registered office and in this regard it cannot take advantage of the averments made in the lease deed about the service of notice at the address given in the lease deed when it had been reacting to the notices, issued to and received at branch office of the Bank. This is not a fit case for interference - appeal dismissed.

Summary

Issues involved:
The judgment involves challenges to an order passed by the Adjudicating Authority regarding an application for setting aside an ex-parte order, deposition of a sum of money, and the service of notices.

Challenge to Order Setting Aside Ex-Parte Proceeding:
The Appellant challenged the order setting aside the ex-parte proceeding, arguing mis-appreciation of facts by the Adjudicating Authority in concluding that the Appellant was properly served and chose not to appear. The Liquidator filed an application claiming rent arrears for an ATM on the Corporate Debtor's property. The Appellant contended that the notice was improperly served at the branch office instead of the registered office, citing a lease agreement clause. The Appellant also disputed the amount claimed by the Liquidator and the condition to deposit Rs. 10 lakhs.

Service of Notices and Deposit of Money:
The Liquidator argued that the Appellant was aware of the proceedings as evidenced by a reply sent to the Liquidator. The Liquidator contended that the ATM was being used by non-employees, who paid a commission to the Bank. The Liquidator maintained that the issue of rent payment was pending adjudication. The Liquidator defended the order to deposit Rs. 10 lakhs, stating it was to be held in a fixed deposit until the application's disposal.

Judgment and Reasoning:
The Tribunal noted that the Appellant responded to notices sent to the branch office, indicating awareness of the proceedings. The Tribunal found no merit in the Appellant's argument regarding improper service of notice. The Tribunal upheld the order to deposit Rs. 10 lakhs, emphasizing that the amount would be returned if the application favored the Appellant. The Tribunal declined to interfere, stating that the Adjudicating Authority's order was well-considered and without error. The issue of rent payment was deemed pending adjudication, and the Tribunal dismissed the appeal, finding no grounds for intervention.