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TMI Blog2022 (5) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... a service was effected and whether the affidavit of service was filed by the Petitioner. The allegations of dispute vide his reply dated 15.01.2020 to the Section 8 Demand Notice raised by the Corporate Debtor can be looked into after getting a proper reply to Section 9 application from the Corporate Debtor. Therefore, the compliance of order dated 06.09.2021 to make the corporate debtor aware that case had been proceeded ex-parte against him and an opportunity to make representation to file a reply assumes significance and criticality in adjudicating Section 9 application. The Adjudicating Authority gave an opportunity to the Corporate Debtor against whom the matter was proceeded ex-parte to appear before the Adjudicating Authority and present his case vide order dated 06.09.2021, but there is no record submitted by the parties to show that in compliance of the order dated 06.09.2021 the order was served on the Corporate Debtor. In the light of such deficiency, and also the issues raised by the Ld. Counsel for the Appellant that there was pre-existing dispute mentioned in his reply to the demand notice dated 15.01.2020, and also that in case the Corporate Debtor had been pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivities which included providing DVR facility for recording the examination proceedings at each centre along with CCTV cameras, with Nysa designated manpower responsible for taking backup of recordings from these locations in server or any other medium provided by Nysa. The Facility Agreement also provided that in case CJPL /Testpan does not provide any of the facilities mentioned in the documents at the centre(s), penalty will be imposed on the basis of feedback received from the concerned government body/university representatives deployed at centre. The Facilities Agreement further provided that the storage device of CCTV surveillance recording was to be arranged by NCPL. After the examination had taken place, some complaints were received by ICAR from All India Agricultural Students Association (AIASA)) regarding irregularities, cheating and mismanagement in the All-India Entrance Examination 2018 conducted in online mode on 22.06.2018, whereupon the Assistant DG of ICAR requested NCPL vide email dated 29.06.2018 to provide the CCTV footage of 27 examination centres whose details were given in an email (attached at pp. 70-71 of Appeal paper book Vol. II). Thereafter, the CCTV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in re-notified on 14.04.2021, 26.04.2021 and 26.07.2021. The matter was again listed on 06.09.2021 and on this date the Adjudicating Authority ordered that the Respondent be proceeded ex-parte since no one appeared on behalf of the Respondent on this date. On this date the Adjudicating Authority also ordered that a copy of the order be served on the Corporate Debtor which was not complied with, according to the Ld. Counsel of Appellant. He has submitted that in such an event the case was finally decided ex-parte vide impugned order dated 13.10.2021. 5. The Ld. Counsel for Appellant has further argued that based on an incorrect statement of the Operational Creditor before the Adjudicating Authority on 06.09.2021 (order attached at Pg. 113 of appeal paper book) that the Corporate Debtor had appeared before the Adjudicating Authority on 11.03.2020 and thereafter had appeared intermittently but not filed reply, the case was proceeded ex-parte against him and thus he was not provided any opportunity to reply to the Section 9 application, which was decided in the absence of his reply and proper defence. 6. In addition, the Ld. Counsel for the Appellant has stated that the payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contract with the Corporate Debtor vide letter dated 30.07.2018 (attached at pp. 78-80 of appeal paper book). He has also claimed that the responsibility regarding maintaining CCTV footage and other arrangements at the examination centres was entirely upon the Operational Creditor in accordance with clauses 3(iii)(c) and 3(vi) of the Facilities Agreement, which it had failed to do and, therefore, while there was a dispute regarding services provided by the operational creditor the corporate debtor did make some mutually agreed payments after deductions for deficient services. 8. The Ld. Counsel for the Respondent No. 1/Operational Creditor has further argued that the notice of Section 9 application was issued by the order of the Adjudicating Authority on 25.02.2020 and the matter was posted for hearing on 11.03.2020. He has stated that the Appellant appeared before the Adjudicating Authority on 11.03.2020 whereafter the case was re-notified for 24.03.2020 but could not be heard since the lockdown was imposed on 24.03.2020 in view of Covid-19 pandemic. He has further submitted that the case application under Section 9 was taken up on 01.12.2020, 11.01.2021, 18.01.2021, 23.02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order to avoid due and just payment to the Respondent No. 1. 11. The Ld. Counsel for the Respondent No. 1/Operational Creditor has also submitted that the dispute raised by the Corporate Debtor in his reply to the demand notice sent under Section 8 of IBC is a sham and imaginary dispute. He has contested the claim of the corporate debtor that the amount of invoice No. 1149 (attached at Pg. 230 of the appeal paper book) was reduced to Rs. 1,13,30,756/- from Rs. 3,75,83,000/- but it is not supported by any documentary proof. He has pointed out that the correct invoice No. 1149 bearing seal and signature of the Appellant is attached at Pg. 212 of the appeal paper book, where no reduction in the amount of invoice is shown and, therefore, full payment has not been made by the corporate debtor. He has urged that, in the same way, the correct invoice bearing No. 1152 is attached at Pg. 232 of the appeal paper book which also does not have any noting of reduction in amount but only partial payment was made by the corporate debtor. 12. The Ld. Counsel for the Respondent No. 1 has submitted that the allegation made by the Appellant about manipulating the invoices are an after-thought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter was renotified for the next date. The matter was taken up on 06.09.2021 and the following is recorded in the concerned order of the Adjudicating Authority:- Ld. Counsel for the Appellant states that the Corporate Debtor had appeared on 11.03.2020 and thereafter, intermittently but has not filed the reply. None appeared for the respondent. Today also none appears for the respondent. The Respondent is proceeded ex-parte. Let the copy of this order be served to the Corporate Debtor. List the matter for hearing on 07th October 2021. 15. A perusal of the order of the Adjudicating Authority given on 06.09.2021 we find that in the order a statement is recorded which is ascribed to the Ld. Counsel for the Appellant that the Corporate Debtor had appeared on 11.03.2020 and thereafter has appeared intermittently but did not file reply. The orders of the Adjudicating Authority given on various dates of hearings show that the Corporate Debtor did not appear on any date after 11.03.2020 nor was given an opportunity to file a reply. In fact, on all dates of hearing after 11.03.2020 the matter was renotified, except on 01.12.2020, when the Petitioner was directed to file a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he corporate debtor vide order dated 06.09.2021. As stated in this Judgment earlier, there is no document submitted to show that in compliance of this order, the Corporate Debtor was communicated the order dated 06.09.2021. In such an event we find that the recording by the Adjudicating Authority in para 10 of the impugned order that opportunities were provided to the Corporate Debtor to make representations is not based on facts on record. We are of the view that the allegations of dispute vide his reply dated 15.01.2020 to the Section 8 Demand Notice raised by the Corporate Debtor can be looked into after getting a proper reply to Section 9 application from the Corporate Debtor. Therefore, the compliance of order dated 06.09.2021 to make the corporate debtor aware that case had been proceeded ex-parte against him and an opportunity to make representation to file a reply assumes significance and criticality in adjudicating Section 9 application. 18. The Ld. Counsel for the Appellant has referred to the Judgment of Hon ble Supreme Court in the matter of Mobilox Innovations Private Ltd (Supra) to contend that the issue of pre-existing dispute does not have to be decided on merits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but there is no record submitted by the parties to show that in compliance of the order dated 06.09.2021 the order was served on the Corporate Debtor. In the light of such deficiency, and also the issues raised by the Ld. Counsel for the Appellant that there was pre-existing dispute mentioned in his reply to the demand notice dated 15.01.2020, and also that in case the Corporate Debtor had been provided sufficient opportunity to reply to the Section 9 application he would have brought these facts before the Adjudicating Authority, we are of the opinion that the Adjudicating Authority has committed an error in proceeding ex-parte against the Corporate Debtor and not communicating order dated 06.09.2021 to him. 22. In view of the detailed discussion as above, we hold the view that it would serve the ends of the justice if the Corporate Debtor is provided an opportunity to submit his reply in Section 9 Application. We, therefore, allow the appeal and accordingly set aside the impugned order dated 13.10.2021. We further direct that the Corporate Debtor shall be free from rigours of Corporate Insolvency Resolution Process and other provisions of IBC. The case is remanded to the Adju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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