TMI Blog2020 (10) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... e Corporate Debtor cannot be construed / deemed to be service of notice in the eye of Law, this Tribunal holds that the Adjudicating Authority / Tribunal while reserving orders in C.P. No. IB-3228 (ND)/2019 had committed error of jurisdiction in reserving orders and passed the impugned judgement without issuing notice to the Corporate Debtor which is clearly unsustainable in the eye of Law. When a plea is taken before this Tribunal that there was no Debt extended by the Financial Creditor to the Corporate Debtor and added further there was no privity of contract between the Financial Creditor and Corporate Debtor , this Tribunal is of the earnest opinion that in the impugned order there was no finding rendered by the Adjudicating Authority as to how a third party payment became a Financial Debt or how a Financial Creditor had become a Financial Creditor , in the absence of any Financial Debt - It cannot be brushed aside that the third party Taj Consultancy was not a party to the proceeding before the Adjudicating Authority and further that Mr. Rajeev Aggarwal, according to the Appellant is neither a Director or a Shareholder of the Corporate Debto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Debtor has filed the instant Appeal, as an Aggrieved person , in respect of the order dated 31.01.2020 passed by the National Company Law Tribunal , New Delhi Bench-VI, New Delhi in C.P. No. IB-3228 (ND)/2019 in admitting the Section 7 application filed by the First Respondent / Petitioner. 4. The National Company Law Tribunal , New Delhi Bench-VI, New Delhi while passing the impugned order dated 31.01.2020 interalia at paragraph 5 to 8 had observed the following: - 5. The applicant further submitted that despite several reminders on the part of the petitioner, the respondent has failed to make the payment of ₹ 29,52,765/- which are due and in default. 6. The respondent did not reply to either the legal notice or the application. 7. Despite opportunity none appeared on behalf of the respondent. Proof of service is also annexed with the main petition. 8. Heard the applicant and peruse the record. and ultimately held that there was Overwhelming evidence to prove the default and on being satisfied that a default amounting to lakhs of rupees had occurred within the meaning of the section 4 of Code and admitted the application by appointing Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al services provider viz. Taj Consultancy . 10. An argument is projected on the side of the Appellant that Mr. Rajeev Aggarwal is neither a Director nor a shareholder of Corporate Debtor and further Company Appeal (AT) (Insolvency) No. 531 of 2020 6 there was no independent finding arrived at by the Tribunal as to how a Third Party payment become a Financial Debt or how Financial Creditor had become again Financial Creditor in the absence of any Financial Debt and the impugned order is silent in this regard. 11. The Learned Counsel for the Appellant submits that the Corporate Insolvency Resolution Process proceedings were initiated against the Corporate Debtor by the First Respondent / Financial Creditor with an intention to extort money from the Corporate Debtor by filing frivolous proceedings and not appearing before the Tribunal. Even after providing adequate opportunities, neither the First Respondent / Financial Creditor nor the 2nd Respondent (Interim Resolution Professional) had appeared before this Appellate Tribunal and, therefore, the Appellant prays for setting aside the impugned order passed by the Adjudicating Authority and to allow the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. Section 5(7) of the Code deals with financial creditor . Section 5(6) defines dispute including a suit or arbitration proceedings relating to (a) the existence of the amount of debt, (b) the quality of goods or service, or (c) the breach of a representation or warranty. Also, that, a dispute must be a reasonable / genuine one and not a speculative or an illusory one. 17. Be it noted that Section 3(8) of the I B Code defines Corporate Debtor meaning a corporate person who owes a debt to any person. Further, as per Section 3(9) of the I B Code, a corporate person does not include any financial service provider . It is to be remembered that a financial service provider can commence proceedings as a Financial Creditor against any Corporate Debt . 18. Section 3(16) of the Code list the Financial Services . Section 3(17) defines Financial Service Provider meaning a person who provides financial services in terms of authorisation issued or registration granted by the Financial Service Regulator . 19. In so far as Section 65 of the I B Code is concerned, the said section specifies penalties for fraudulent or malicious commencement of proceedings and a pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Xxxxxxxxxxxxx (5) A notice or process may also be served on an authorised representative of the applicant or the respondent, as the case may be, in any proceedings or on any person authorised to accept a notice or a process, and such service on the authorised representative shall be deemed to be a proper service. 22. As a matter of fact, Rule 44 of National Company Law Tribunal Rules , 2016 deals with hearing of petition or applications - (1) The Tribunal shall notify to the parties the date and place of hearing of the petition or application in such manner as the President or a Member may, by general or special order, direct. 23. Rule 49 of NCLT Rules, 2016 speaks of Ex parte hearing and disposal (1) Where on the date fixed for hearing the petition or application or on ay other date to which such hearing may be adjourned, the applicant appears and the respondent does not appear when the petition or the application is called for hearing, the Tribunal may adjourn the hearing or hear and decide the petition or the application ex parte. (2) Where a petition or an application has been heard ex parte against a respondent or respondents, such respondent or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken before this Tribunal that there was no Debt extended by the Financial Creditor to the Corporate Debtor and added further there was no privity of contract between the Financial Creditor and Corporate Debtor , this Tribunal is of the earnest opinion that in the impugned order there was no finding rendered by the Adjudicating Authority as to how a third party payment became a Financial Debt or how a Financial Creditor had become a Financial Creditor , in the absence of any Financial Debt . 28. It cannot be brushed aside that the third party Taj Consultancy was not a party to the proceeding before the Adjudicating Authority and further that Mr. Rajeev Aggarwal, according to the Appellant is neither a Director or a Shareholder of the Corporate Debtor and the impugned order is conspicuously silent about this vital aspect. On this score also the impugned order of the Adjudicating Authority suffers from legal infirmity. 29. Be that as it may, in the light of foregoing detailed discussions, this Tribunal to prevent an aberration of justice allows the instant Appeal by setting aside the impugned order dated 31.01.2020 in C.P. No. IB-3228 (ND)/2019 passed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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