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TMI Blog2022 (9) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... order was never pronounced to the knowledge of the Appellant and by the bench competent to do so and as such it could not have been challenged by the Appellant earlier within the time prescribed by Section 61 of the Code. Appeal allowed. - Company Appeal (AT) (Ins.) No. 217 & 218 OF 2022 - - - Dated:- 2-9-2022 - [Justice Rakesh Kumar Jain] Member (Judicial) And [Dr. Alok Srivastava] Member (Technical) For the Appellant : Mr. Abhijeet Sinha, Mr. Abhirup Dasgupta, Mr. Kunal Godhwani, Mr. Ishaan Duggal and Ms. Bhawana Sharma, Mr. Aditya Shukla, Advocates For the Respondents : Mr. Neeraj Malhotra, Sr. Adv. with Ms. Shweta Bharti, Mr. Sukrti Kapoor, Mr. J.K. Chaudhary, Advocates for R1 Mr. Ravi Raghunath, Advocate for R2 JUDGMENT Per : Justice Rakesh Kumar Jain. This order shall dispose of the appeals bearing CA (AT) (Ins) No. 217 218 of 2022, purported to have been filed against the order dated 10.01.2018 and 25.02.2022 collectively, passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench in TCP No. 273/I BC/NCLT/MB/MAH/2017, whereby an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (in short C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommencement of the CIRP shall be effective from the date appointment of IRP by further order. 4. The aforesaid order was pronounced by two judicial members, namely, Shri. Bhaskara Pantula Mohan, Member (Judicial) and Shri M.K. Shrawat, Member (Judicial). According to the Appellant, from the date of demand notice issued under Section 8 of the Code in the matter in hand, the Appellant came to know about the initiation of another proceedings by Respondent No. 1 when it received another demand notice dated 27.02.2019 which was also issued under section 8 of the Code but the amount was increased with the passage of time due to interest factor. It is also submitted that the said notice was received on 12.03.2019 and the Respondent filed a short reply to the notice on 14.03.2019. It is further submitted that on 25.03.2019 another petition under section 9 of the Code was filed by Respondent No. 1 against the Corporate Debtor before the Adjudicating Authority which was assigned CP No. 1350/MB/2019. It is stated that the notice in the second application, filed under Section 9, was issued to the Appellant on 11.06.2019 and on 25.10.2019 the second petition was dismissed with the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 shall come into force w.e.f. 03.08.2017. The aforesaid order dated 02.08.2017 is reproduced for a ready reference: ORDER Shri Bhaskara Pantula Mohan Member (Judicial) has joined the NCLT and posted at NCLT Mumbai vide order no. 10/36/2016- NCLT dated 31.07.2017. Accordingly, the Benches at NCLT Mumbai are hereby reconstituted as under: Bench at NCLT Mumbai: NCLT Division Bench-I 1. Shri BSV Prakash Kumar, Member (Judicial) 2. Shri V. Nallasenapathy, Member (Judicial) NCLT Division Bench-II 1. Shri M.K. Shrawat, Member (Judicial) 2. Shri Bhaskara Pantula Mohan Member (Judicial) 8. Case set up by the Appellant is that the order dated 10.01.2018 was not pronounced by the Bench on that date as it was not a part of the cause list of 10.01.2018 which was put up for notice by the NCLT, Court-II. The cause list of 10.01.2018 is also attached as Annexure A-21. We could not find the entry regarding the present case in the said cause list much less for the purpose of pronouncement of the order. In the background of the aforesaid facts and circumstances, Counsel for the Appellant has argued that the order dated 10.01.2018, passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge who has not heard the case on facts and the law. In the case of Gullapalli Nageswara Rao Ors. Vs. Andhra Pradesh State Road Transport Corporation Anr., 1959 AIR 308, relied upon by the Appellant, the Hon ble Supreme Court has observed that: 31. The second objection is that while the Act and the' Rules framed thereunder impose a duty on the State Government to give a personal hearing, the procedure prescribed by the Rules impose a duty on the Secretary to hear and the Chief Minister to decide. This divided responsibility is destructive of the concept of judicial hearing. Such a procedure defeats the object of personal hearing. Personal hearing enables the authority concerned to watch the demeanour of the witnesses and clear-up his doubts during the course of the arguments, and the party- appearing to persuade the authority by reasoned argument to accept his point of view. If one person hears and another decides, then personal hearing becomes an empty formality. We therefore hold that the said procedure followed in this case also offends another basic principle of judicial procedure. 14. He has also relied upon a decision of this Appellate Tribunal in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Adjudicating Authority in main CP(IB)No.116/NCLT/ BB/2020 would have been pronounced on earlier date on 07.12.2020. Further, when the said final Impugned Order dated 07.12.2020 was not to be found nowhere in the NCLT Website, as averred by the Appellant , (being a predated one) and only later it came to know on 06.02.2021, then in law, it is held as that the Impugned Order dated 07.12.2020 was never pronounced by the Adjudicating Authority (there being a significant omission in regard to the pronouncement of an order by a Tribunal and the pronouncement being an essential judicial act ) and hence it is declared nullity in the eye of law, apart from the crystalline fact is that the same was not listed for pronouncement and accordingly, this Tribunal without delving deep into the matter and not expressing any opinion on the merits of the matter, any further, at this stage, simpliciter sets aside the said Impugned Order of the Adjudicating Authority dated 07.12.2020 in main CP(IB)No. 116/NCLT/BB/2020 to prevent an aberration of justice and to promote substantial cause of justice. Consequently, the Appeal succeeds. 15. Even otherwise, Counsel for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to Section 5 of the Code coupled with Section 9(6) to contend that the order of admission of the application filed either under Section 7, 9 or 10 would initiate CIRP with admission. He has also submitted that Section 61 talks of an order and the order of admission is an order which is amenable to challenge independently and cannot be read with the order of appointment of IRP for the purpose of extending the period of limitation. 18. In reply to this contention, Counsel for the Appellant has submitted that they had no knowledge about the order dated 10.01.2018 because there was no pronouncement which is required to be done in terms of Rule 150 of the NCLT Rules, 2016. 19. We may refer to Rule 150(1) for a quick reference which says that:- The Tribunal, after hearing the applicant and respondent, shall make and pronounce an order either at once or, as soon as thereafter as may be practicable but not later than thirty days from the final hearing. He has also submitted that the Adjudicating Authority did not communicate the order dated 10.01.2018 which is so mandated under Section 150(3) which says that A certified copy of every order passed by the Tribunal shall be g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harmonious interpretation of the applicable legal regime, given that the IBC is a Code in itself and has overriding effect. Sections 61(1) and (2) of the IBC consciously omit the requirement of limitation being computed from when the order is made available to the aggrieved party , in contradistinction to Section 421(3) of the Companies Act. Owing to the special nature of the IBC, the aggrieved party is expected to exercise due diligence and apply for a certified copy upon pronouncement of the order it seeks to assail, in consonance with the requirements of Rule 22(2) of the NCLAT Rules. Section 12(2) of the Limitation Act allows for an exclusion of the time requisite for obtaining a copy of the decree or order appealed against. It is not open to a person aggrieved by an order under the IBC to await the receipt of a free certified copy under Section 420(3) of the Companies Act 2013 read with Rule 50 of the NCLT and prevent limitation from running. Accepting such a construction will upset the timely framework of the IBC. The litigant has to file its appeal within thirty days, which can be extended up to a period of fifteen days, and no more, upon showing sufficient cause. A sleigh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the rest-the manner in which it is to be recorded, the way in which it is to be authenticated, the signing and the sealing, all the rules designed to secure certainty about its content and matter-can be cured; but not the bard core, namely, the formal intimation of the decision and its contents formally declared in a judicial way in open court. The exact way in which this is done does not matter. In some courts the judgment is delivered orally or read out, in some only the operative portion is pronounced, in some the judgment is merely signed after giving notice to the parties and laying the draft on the table for given number of days forinspection. State of UP Vs. Lakshmi Ice Factory Ors., 163 AIR 399, 15.The third thing which to our mind indicates that pronouncement in open court is essential is cl. 31 of the Statutory Order. That clause is in these terms : Except as provided in this Order and in the Industrial Disputes (Appellate Tribunal) Act, 1950, every order made or direction issued under the provisions of this Order shall be final and conclusive and shall not be questioned by any party thereto in any proceedings. The Industrial Disputes (Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdance with law as we have held in the earlier part of this order and was not pronounced to make it known to the parties concerned and merely the fact that there is an endorsement on the copy of the order dated 10.01.2018 that it has been given free of cost does not indicate that it was given to the Appellant. The Respondent has imputed knowledge of the order dated 10.01.2018 to the Appellant on the basis of an order dated 25.10.2019 passed in another Company Petition No. 1350 of 2019 but from the bare perusal of the said order it reveals that neither the company petition nor the date of order was thereof matched with the present case. Besides this, the order dated 10.01.2018 was only an order of admission in which the Adjudicating Authority had observed that it would pass a separate order for the appointment of the IRP for which the registry was directed to write to the IBBI for making the recommendation of the name from the penal of the IRP. No recommendation was made by the IBBI and the Respondent itself was in dark about the proceedings before the Adjudicating Authority regarding the appointment of the IRP to initiate the process of Section 13 and 14 of the Code. The IRP was ul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out that Appellant in his Application which has been filed for ex-parte stay in Para C (vii) has offered to deposit a demand draft to the tune of Rs.1,37,63,889/- with the Registrar of this Appellate Tribunal, which may be directed to be deposited. Shri Abhijeet Sinha, counsel for the Appellant submits that Appellant is still willing to settle the matter with the Operational Creditor. 4. In above view of the matter, we direct the Appellant to deposit a Fixed Deposit in the name of Registrar, NCLAT within 10 days. 5. In the meantime, further steps in pursuance to the impugned order dated 25.02.2022 shall not be taken. 6. Appellant may file certified copy of the order dated 25.02.2022 before the next date. Reply may be filed within two weeks. Rejoinder may be filed within two weeks thereafter. 7. List this Appeal on 12.04.2022. 8. Settlement, if any, shall be without prejudice to the contentions of the parties. 9. Let the record of TCP No. 273/I B/NCLT/MB/MAH/2017 be called for. 26. As per the aforesaid order, the Appellant had deposited of Rs. 1,37,63,889/- in fixed deposit in the name of the Registrar of this Tribunal. Since, the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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