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TMI Blog2019 (1) TMI 1744X X X X Extracts X X X X X X X X Extracts X X X X ..... avit, similar plea has been taken as 1st Respondent has taken but as Resolution Professional has no role for admission of Section 9, it is not open to him to support or oppose one of the party on the question of fact except to dispute or admit one or other fact. The application preferred by the 1st Respondent under Section 9 of the I B Code is dismissed. - Company Appeal (AT) (Insolvency) No. 738 of 2018 - - - Dated:- 24-1-2019 - Justice S.J. Mukhopadhaya Chairperson And Justice Bansi Lal Bhat Member (Judicial) For the Appellant : Mr. Ramji Srinivasan, Senior Advocate assisted by Mr. Neil Hildreth, Mr. Rahul Jain and Ms. Sylona Mohapatra, Advocates For the Respondents : Mr. Gaurav Mitra, Mr. Saurabh Seth and Ms. Sumeera Raheja, Advocates for R-1., Mr. Narender Hooda, Senior Advocate assisted by Mr. Pradeep Dahiya, Advocate for R-2 and R-3 Mr. Vijender Sharma, RP JUDGMENT SUDHANSU JYOTI MUKHOPADHAYA, J. M/s. Suntech Infra Solutions Pvt. Ltd. ( Operational Creditor ) filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for short, the I B Code ) for initiation of corporate insolvency resolution process against M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty before passing order under Section 7 or 9 of the I B Code. 5. The aforesaid issue was also noticed by this Appellate Tribunal in M/s. Starlog Enterprises Limited vs. ICICI Bank Limited 2017 SCC Online NCLAT 13 , wherein this Appellate Tribunal held as follows : 5. The aforesaid issue now stands decided by decision of the Appellate Tribunal in M/s. Innoventive Industries Limited vs ICICI Bank Anr. in CA (AT) (Insolvency) No. 1 2 of 2017 wherein the Appellate Tribunal observed and held :- 43. There is no specific provision under the I B Code, 2016 to provide hearing to Corporate debtor in a petition under Section 7 or 9 of the I B Code, 2016. 53. In view of the discussion above, we are of the view and hold that the Adjudicating Authority is bound to issue a limited notice to the corporate debtor before admitting a case for ascertainment of existence of default based on material submitted by the corporate debtor and to find out whether the application is complete and or there is any other defect required to be removed. Adherence to Principles of natural justice would not mean that in every situation the adjudicating authority is required to afford ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebtor prior to admitting the petition filed under Section 7 of the Code of 2016. Section 7(4) of the Code of 2016 requires the NCLT to ascertain the default of the corporate debtor. Such ascertainment of default must necessarily involve the consideration of the documentary claim of the financial creditor. This statutory requirement of ascertainment of default brings within its wake the extension of a reasonable opportunity to the corporate debtor to substantiate by document or otherwise, that there does not exist a default as claimed against it. The proceedings before the NCLT are adversarial in nature. Both the sides are, therefore, entitled to a reasonable opportunity of hearing. The requirement of NCLT and NCLAT to adhere to the principles of natural justice and the fact that, the principles of natural justice are not ousted by the Code of 2016 can be found from Section 7(4) of the Code of 2016 and Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Rule 4 deals with an application made by a financial creditor under Section 7 of the Code of 2016. Sub-rule (3) of Rule 4 requires such financial creditor to despatch a copy of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as already held in M/s. Starlog Enterprises Limited (Supra) . 7. Learned counsel appearing on behalf of the 1st Respondent (Operational Creditor) relied on a decision of this Appellate Tribunal in J.B. Tiwari vs. Biostadt India Limited Anr. Company Appeal (AT)(Ins.) No. 268 of 2018 disposed of on 30th November, 2018. It was submitted that this Appellate Tribunal though noticed that no notice was issued on the Corporate Debtor but refrained from setting aside the order. 8. However, the aforesaid submission cannot be accepted as in the case of J.B. Tiwari vs. Biostadt India Limited Anr. (Supra) this Appellate Tribunal observed and held as follows : .. No doubt, it would have been appropriate if the Adjudicating Authority had also sent the Notice through its own mechanism. We have considered whether we should send back the matter for want of such procedure being followed by the Adjudicating Authority. However, we have also heard the Appellant in details to consider if the Appellant has any grounds or material because of which, if the same had been shown to the Adjudicating Authority, the result of the proceeding under Section 8 and 9 of the Code coul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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