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TMI Blog2023 (9) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... 2022 in which the Adjudicating Authority was not sure about the service having been effected by the Financial Creditor on the Corporate Debtor, therefore, it asked the Financial Creditor to file an affidavit of service within a week of the Corporate Debtor. However, it is pertinent to mention that both in the order dated 11.10.2022 and 07.11.2022, in the column of appearance, absence of the Corporate Debtor has been mentioned which in fact is a wrong recording of fact of absence. As an abundant caution, the Adjudicating Authority should have passed the order of proceeding against the Respondent ex-parte and should have listed the case for ex-parte hearing but the case was heard on the same day and the order was reserved - the observations made by the Adjudicating Authority in the impugned order that the Appellant (Corporate Debtor) remained absent on many occasions is patently erroneous and is not borne out from the record. Nothing survives for the Respondent to recover in the application filed under Section 7 of the Code therein. The present appeal succeeds and the impugned order is hereby set aside - Appeal allowed. - [Justice Rakesh Kumar Jain] Member (Judicial) And [N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel appearing for the Financial Creditor is directed to place on record two sets of hard copies of the Petition before the adjourned date. List this matter on 07.11.2022. 3. On the adjourned date i.e. 07.11.2022, the following order was passed by the Adjudicating Authority:- NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURTII 23. C.P.(IB)-1083(MB)/2022 CORAM: SHRI SHYAM BABU GAUTAM JUSTICE P. N. DESHMUKH (Retd.) HON BLE MEMBER (T) HON BLE MEMBER (J) ORDER SHEET OF THE HEARING OF MUMBAI BENCH OF THE NATIONAL COMPANY LAW TRIBUNAL ON 07.11.2022 NAME OF THE PARTIES: Indian Overseas Bank V/s Utopian Sugars Limited APPEARANCE : FOR THE FINANCIAL CREDITOR : Adv. Rohit Gupta FOR THE CORPORATE DEBTOR : None present Section: 7 of Insolvency and Bankruptcy Code, 2016 ORDER The Court is convened through Virtual Hearing (VC). None present for the Corporate Debtor. Counsel appearing for the Financial Creditor seeks time to file affidavit of service. Time granted. The same be done within a period of one week from today. List this matter on 21.11.2022. 4. In compliance of the order dated 07.11.2022, the Financial Cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by limitation. The Financial Statements attached to this Petition clearly demonstrate the total amount of loan disbursed to the Corporate Debtor. It is also evident that the Corporate Debtor committed several defaults in repayments and did not reply to the Notices and reminders issued by the Financial Creditor. Meanwhile, the admission of the Corporate Debtor's liability to repay the said loan is well evidenced by the Confirmation of Balance and Security dated 9th October 2020. 7. This Appeal is filed by the suspended board of directors of the Corporate Debtor assailing the validity of the impugned order dated 16.12.2022 by which the application filed under Section 7 of the Code has been admitted. The appeal filed on 22.12.2022 was listed for preliminary hearing on 23.12.2022 in which the following order was passed by this Tribunal:- 23.12.2022: Learned Counsel for the Appellant submits that the order passed by the Adjudicating Authority is ex-parte order. The Adjudicating Authority in its order observed that the Corporate Debtor failed to appear on multiple occasions whereas after issuance of notice 07.11.2022 was the first date on which date the Financial Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.11.2022 and on the same day the order was reserved and later on pronounced. It is therefore submitted that the Adjudicating Authority has shown an unholy haste in proceeding against the Appellant and no proper opportunity to defend was granted. 9. In this regard, Counsel for the Respondent (Financial Creditor) has submitted that after the service was effected, the Corporate Debtor was required to appear before the Adjudicating Authority and therefore, in the case of his absence, the Adjudicating Authority has adopted the right procedure in proceeding against the Corporate Debtor ex-parte and passing an ex-parte order. 10. Besides the aforesaid facts and circumstances, during the pendency of this appeal, something more has happened, because after the order dated 16.12.2022 was stayed an application for intervention was filed by Union Bank of India claiming itself to be the creditor, alleged to have submitted its claim for an amount of Rs. 22,27,81,187.21/- with the IRP (Respondent No. 2) allegedly before the order of stay passed by this Tribunal. However, during the course of hearing, it is not disputed by Counsel appearing on behalf Intervenor that an application has separa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 11 of the NCLAT Rules, 2016. It is averred that out of the court settlement (OCS) was sanctioned by the Financial Creditor as per which the Appellant had to pay Rs. 24 Crore i.e. 6 Crore upfront amount and 6 Crore each in three tranches. It is submitted that the amount of Rs. 24 Crore has already been paid as against the total claim of the Financial Creditor of Rs. 23,16,19,975/- set up in the application filed under Section 7 of the Code. However, Counsel for the Financial Creditor has submitted that the OCS was not only in regard to the amount involved in the present appeal but also regarding the amount of KCC account where the borrower company is a corporate guarantor. In its reply to this application, it is submitted that the amount involved in the KCC loan account of Rs. 12.40 Crore which was to be paid by the Appellant in four tranches of Rs. 3.10 Crores. It is submitted that the Appellant has already paid two tranches of Rs. 3.10 Crores i.e. Rs. 6.20 Crores but rest of the amount has not been paid, therefore, this settlement cannot be pushed forward. 13. During the course of hearing, it also transpired that the Respondent (Financial Creditor) has also filed a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of service within a week of the Corporate Debtor. However, it is pertinent to mention that both in the order dated 11.10.2022 and 07.11.2022, in the column of appearance, absence of the Corporate Debtor has been mentioned which in fact is a wrong recording of fact of absence. 17. Be that as it may, in compliance of the order dated 07.11.2022, though the affidavit of service was not filed in time yet the same was filed on 18.11.2022 and when the case was taken up on 21.11.2022, the Corporate Debtor has been shown absent and the ex-parte arguments were heard and the order was reserved as well. 18. As an abundant caution, the Adjudicating Authority should have passed the order of proceeding against the Respondent ex-parte and should have listed the case for ex-parte hearing but the case was heard on the same day and the order was reserved. 19. Thus, the observations made by the Adjudicating Authority in the impugned order that the Appellant (Corporate Debtor) remained absent on many occasions is patently erroneous and is not borne out from the record. 20. At this stage, it is made clear that we can allow this appeal for this reason alone and remand the case back to the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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