9911796707
TMI Blog2024 (3) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Insolvency Resolution Process ('CIRP' in short). Aggrieved by this impugned order, the present appeal has been preferred by the suspended director. 2. The Learned Counsel for the Appellant putting forth his submissions stated that the Corporate Debtor had availed credit facilities of Rs. 65 crore from the Financial Creditor- Respondent No. 2 in 2010. Admittedly, the Corporate Debtor committed a default on 31.05.2014 having failed to service the interest following which their account was classified as Non-Performing Asset (NPA) on 28.08.2014. Subsequent thereto, a Master Restructuring Agreement ('MRA' in short) was executed between the Corporate Debtor and a consortium of lenders including the Respondent No. 2-UCO Bank on 25.09.2014. Due to financial difficulties, the last payment was made to the Financial Creditor on 05.10.2015. However, the Financial Creditor- Respondent No. 2 initiated proceeding under the SARFAESI Act on 07.04.2018 and later filed an application under Section 7 of the IBC on 08.08.2022 for outstanding dues amounting to a sum of Rs. 178 crores. 3. While admitting that the first date of default was 31.05.2014 following which MRA was entered into on 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate Debtor was justified and hence correctly admitted by the Adjudicating Authority. 5. Contesting the averments made by the Appellant that the debt was time-barred, it was submitted by the Learned Counsel for the Respondent No.2 that the question as to whether the Section 7 application is time-barred or not is to be decided based on the facts and circumstances of the case. In the present case, the Corporate Debtor having acknowledged their debt payable to the Financial Creditor in their balance sheet as on 31.03.2022, the Section 7 application was rightly admitted by the Adjudicating Authority. The Financial Statements of the Financial Creditor clearly disclosed the debt payable to Respondent No.2/UCO Bank both under the heads of long-term borrowings as well as short-term borrowings in the Notes to Accounts of the financial statements for the year ending 31-03-2022. It was further pointed out that the Adjudicating Authority had correctly applied the well settled proposition of law that the benefit of Section 18 of the Limitation Act is available to proceedings filed under Section 7 of the IBC. Since Section 18 of the Limitation Act, provides that a fresh period of limitation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to direct the CA who is supposed to have signed the financials to be personally present before them and issued an order on 22.11.2023 which is as reproduced below: "Corporate Debtor is directed to issue notice to the Statutory Auditor Mr. Gouranga Paul, of J.B.S. & Company, Chartered Accountants to present personally before this Bench for answering certain queries in connection with the matter on Friday i.e., on 24.11.2023." 10. It is the contention of the Appellant that the CA was heard on 11.12.2023 and an order was passed by the Adjudicating Authority permitting the CA to send original signed copy of the books and accounts by 12.12.2023. By the same order, the Section 7 application was also was reserved for orders thus not giving any chance to the Appellant to put forth their views on the financial statements filed by the said CA. 11. This brings us to the impugned order which was pronounced on 20.12.2023, which in all fairness, records the entire sequence of events, which we would like to reproduce for better appreciation of the case at hand. The relevant excerpts are as follows: "32...... However we find that the Corporate Debtor has acknowledged the debt payable to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and/or place reliance on the said balance sheets. The Appellant clearly did not get the chance to explain the notes of the said balance sheets which allegedly expressed caveats regarding the debt. 13. It is well settled that adherence to principles of natural justice is the essence of fair adjudication and cannot be given a go-by by the Adjudicating Authority or this Tribunal in the discharge of their adjudicatory and appellate responsibilities. Opportunity to hear is a critical limb of this principle of natural justice. The Tribunal must appraise the party of the case he has to meet so as to enable him to make his representation. This opportunity must be real and effective. The right to make representation requires that the person/entity proceeded against must have opportunity to peruse all material relied upon against him. Thus, it is imperative that all contesting parties should be put on notice in respect of such documents before any order is passed basis these documents. So also in the present matter, to meet the ends of justice, it was the duty of the Adjudicating Authority to have ensured that the balance sheets produced by the CA was shared with the Appellant party since ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
