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TMI Blog2022 (3) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... d into Facility Management Agreement dated 23rd May, 2018 with the Respondent (Operational Creditor), under which the Respondent has provided facility and workspace to run office operation by the Corporate Debtor. (ii) The Corporate Debtor opted out of the Facility Management Agreement in September, 2018 and shifted his registered office from C 6B/59, IInd Floor, Janakpuri, New Delhi to A-12, Naraina Industrial Area, Phase-1, New Delhi with effect from 20th September, 2018. The Corporate Debtor vide email dated 19th September, 2018 informed the Operational Creditor about the issues which arose regarding operation at the space provided by the Operational Creditor. (iii) The Operational Creditor claimed to have issued notice under Section 8 to the Corporate Debtor on the registered email IDs as available on the portal of Ministry of Corporate Affairs and Demand Notice dated 3rd October, 2018 by Speed Post on the registered address of the Corporate Debtor as well as on its registered email IDs. The email did not bounce back or returned, but no reply was filed to the notice dated 3rd October, 2018. (iv) An Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent. 4. The learned Counsel for the Appellant submits that the Adjudicating Authority has committed error in observing that it has no jurisdiction to recall/ review order dated 8th February, 2019 and 10th April, 2019. It is submitted that Rule 49 of NCLT Rules, 2016 (hereinafter referred to as the "NCLT Rules") specifically empowers the Adjudicating Authority to recall an ex-parte order under Rule 49, sub-rule (2). The Adjudicating Authority was well within its jurisdiction to recall the order on the ground that both orders were passed ex-parte. It is submitted that in the order dated 8th February, 2019 itself it was recorded that notices sent to Corporate Debtor vide Speed Post were received back unserved, with the report that addressees have left the premises. Learned Counsel for the Appellant further submits that the Corporate Debtor has already informed the Operational Creditor vide email dated 19th September, 2018 that he has to shift his premises and in pursuance of Board Resolution passed by Board of Directors of the Corporate Debtor on 20th September, 2019, the Corporate Debtor has shifted his office to Naraina Industrial Area, which fact is fully proved by the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were received by the Corporate Debtor, but no reply was filed by the Corporate Debtor. The Adjudicating Authority did not commit any error in rejecting the Application. The Adjudicating Authority is not vested with power to review/ recall/ set-aside its own ex-parte order after the constitution of Committee of Creditors ("CoC"). The learned Counsel for the Respondent also relied on the judgment of this Appellate Tribunal in Suspended Management of Jay Polypack Pvt. Ltd. vs. SGV Foils Pvt. Ltd. & Anr. - [Company Appeal (AT) (Ins.) No.362 of 2021. The learned Counsel further submits that notices sent by emails are in accordance with the rules of service and Corporate Debtor cannot complain that notices were not served on him. The learned Counsel for the Respondent further submits that even after initiation of CIRP by an order dated 10th April, 2019, the Directors of the Corporate Debtor have withdrawn an amount of Rs. 56 lakhs from the account of the Corporate Debtor on 4th February, 2021, which was against the provisions of the Code. 7. We have considered the submission of learned Counsel for the parties and have perused the record. 8. In IA No.405 of 2019, the prayer of the Corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment under the mandate of the Insolvency and Bankruptcy Code, 2016. Copy of the email dated 03.05.2019 is annexed herewith and marked as Annexure - 3. 16. It is stated that neither the demand notice, nor any copy of the subsequent petition was ever served upon the Corporate Debtor, which is highly suspicious, since even if there was no address matching in the Speed Post, due notice was served to the Operational Creditor that the Corporate Debtor would be shifting its office, and all the representatives within the management of Operational Creditor had several email addresses of all the relevant officers of the Corporate Debtor. Hence, by not sending the copy of the Section 8 Demand Notice by email and choosing to issue the email to one email address, which found mention in the MCA records, clearly points out to the duplicitous conduct of the Operational Creditor. 17. It is stated that the present CIR process was deliberately rendered ex-parte by the Operational Creditor, since it wanted to hide its malafide conduct and did not want the Corporate Debtor to become aware of the fact that such a proceedings was contemplated to be underway." 9. Rule 49, sub-rule (2) of the NCLT Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order (Order dated 25th January, 2019 by which notices were issued to the Corporate Debtor), which letter was not delivered. The registered letter sent by Speed Post service were also not delivered and returned with the endorsement "addressee left without instruction". Thus, the notices, which were sent by the Adjudicating Authority to the Corporate Debtor, both by Registered Post and Speed Post were not served, which fact is also noticed in the order dated 8th February, 2019. In the Application No.405 of 2019, the Appellant has come up with a case that registered email IDs of the Corporate Debtor and its Directors through the domain service was no more in operation after September 2019 as the domain service provided by the third-party had expired. It is also the case of the Corporate Debtor that immediately after passing of the order dated 10th April, 2019, an email was received on the personal email ID of the Director dated 3rd May, 2019, which was duly received. The Operational Creditor was well aware of the personal email IDs of the Directors and notices were not sent on the personal email IDs of the Directors. The Corporate Debtor has made sufficient ground to prove th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all/ review of the orders, for which alternate effective remedy is provided under the IBC, 2016. The Hon'ble Allahabad High Court in the matter of Khan Enterprises Vs. National Company Law Tribunal and Ors in C.M.W.P. No.32675 of 2018 has inter alia, held that "it is admitted that there is no provision in I.B.C. for review of the order admitting a petition filed under Section 9 of the I.B.C. It is also not disputed in law that the power to review cannot be exercised unless there is specific provision for the same." Similar views have been propounded in various other case laws by the Hon'ble NCLAT and relied upon by the Operational Creditor." 13. The Adjudicating Authority by noticing the observation of the Allahabad High Court has noted only one part of the observation, whereas omitting the next part of the order in the same paragraph. In Allahabad High Court in the matter of Khan Enterprises Vs. National Company Law Tribunal and Ors in C.M.W.P. No.32675 of 2018, the Hon'ble Court has made following observation: "It is admitted that there is no provision in IBC for review of the order admitting a petition filed under Section 9 of the IBC. It is also not disputed in law that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r setting aside the ex-parte order for initiating CIRP upon such terms as it thinks fit. However, after constitution of CoC the Adjudicating Authority cannot set aside even ex-parte admission order and in such a situation the Corporate Debtor has to file the Appeal under Section 61 of the IBC. 21. Now, we have considered the facts of this case, the Application under Section 9 was admitted on 27.05.2020 and the Appellant (Corporate Debtor) has filed the Application for setting aside the ex-parte admission order on 06.11.2020 whereas the CoC has been constituted thereafter on 20.11.2020. In such a situation before constitution of CoC the Ld. Adjudicating Authority can consider the Application for setting aside ex-parte admission order but after constitution of the CoC the Ld. Adjudicating Authority cannot in exercise of power under Rule 49(2) of the NCLT Rules, 2016 set aside the ex-parte admission order. Ld. Adjudicating Authority has passed the impugned order after constitution of CoC i.e. on 23.03.2021, therefore, we find no illegality in the impugned order." 16. The aforesaid observations were made by this Tribunal while considering the powers under Section 12A of the Code r/w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laiming to be payments made by them on behalf of the Corporate Debtor. On a pointed query on this submission, learned Counsel for the Appellant submits that Appellants are ready and willing to deposit the amount of Rs. 56 lakhs. The learned Counsel for the Appellant, however, submits that he should be permitted to deposit the amount before the Adjudicating Authority and not in the account of Corporate Debtor. The amount having withdrawn by the Directors to their accounts, from the account of the Corporate Debtor, we are of the view that Directors may deposit back the said amount into the account of the Corporate Debtor. Let the aforesaid deposit be made within 30 days from today by the Appellants. 19. In view of the foregoing discussions, we set-aside the order dated 30th November, 2021 passed by the Adjudicating Authority in C.A. No.405/2019 in IB-195(ND)/2019. The Appeal is allowed and the order dated 8th February, 2019 as well as 10th April, 2019 are also set-aside. Application IB-195(ND)/2019 is revived before the Adjudicating Authority, to be heard and decided after hearing the parties. The Appellants are also allowed 30 days' time to file reply to Section 9 Application befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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