Having heard learned counsel for the parties and having perused
the material placed on record, we are clearly of the view that the
impugned order dated 09.07.2018 passed by the National Company Law
Appellate Tribunal, New Delhi (‘the Appellate Tribunal’) in Company
Appeal (AT) (Insolvency) No. 158 of 2017 cannot be sustained, for the
appellant having been deprived of a reasonable opportunity of hearing
and the order having been passed in its absence after remand by this
Court.
The matter relates to an application under Section 9 of the
Insolvency and Bankruptcy Code, 2016 filed by the respondent, said to
be an operational creditor, alleging default in payment of a sum of Rs.
Signature Digitally4.72signedNot Verifiedby Dr.crores against the goods supplied in the year 2012. The application Mukesh Nasa
(‘the Tribunal’) by its order dated 31.07.2017. However, the said order
was set aside by the Appellate Tribunal on 13.10.2017, essentially on the
ground that the demand notice was served by an advocate holding no
position with or in relation to the operational creditor.
The respondent-operational creditor questioned the said order by
way of a petition for special leave to appeal in this Court, being SLP(C)
No. 8145 of 2018. In the petition so filed by the operational creditor, a
Division Bench of this Court, in its order dated 02.04.2018, considered it
proper to remand the matter to the Appellate Tribunal in view of the
decision in the case of Macquarie Bank Limited v. Shilpi Cable
Technologies Limited: (2018) 2 SCC 674, wherein it was held that a
notice on behalf of the operational creditor by a lawyer would be in
order. However, fact of the matter remains that the said order dated
02.04.2018 was passed without notice to the other side; and it was also
provided therein that the respondent would be at liberty to move the
Court, if aggrieved. It was further enjoined upon the petitioner before
this Court i.e., the operational creditor, to put the respondent to notice
of the order and to file proof thereof before the Appellate Tribunal.
As per observations of the Appellate Tribunal in opening
paragraph of the impugned order, the registry was directed to serve
notice on the parties and in response thereof, respondent of the appeal
appeared but nobody appeared on behalf of the appellant. Fresh notice
was issued on which, the Appellate Tribunal received postal
endorsement to the effect that the appellant had ‘left’ the given address.
Thus, notice could not be delivered to the appellant.
However, the Appellate Tribunal chose to examine the matter with
reference to the said decision in Macquarie Bank Limited and held that
the petition filed by the operational creditor was within limitation.
Several grounds are urged in challenge to the order aforesaid but
the fundamental factor remains that the appellant was not present
before the Appellate Tribunal; and it is difficult to impute knowledge in
the appellant about the order passed by this Court on 02.04.2018
without notice and then, about revival of the proceedings before the
Appellate Tribunal.
The appellant has attempted to put forward several contentions
on merits, including the one that it was a case of pre-existing dispute.
We are not commenting on the merits of the case either way but, so far
as initiation of corporate insolvency resolution process at the instance
of respondent-operational creditor is concerned, the relevant facts and
factors, including the question of pre-existing dispute, deserve due and
adequate consideration by the Appellate Tribunal.
In view of the above, it appears just and proper that while setting
aside the impugned order dated 09.07.2018, the matter be again restored
to the file of the Appellate Tribunal for decision afresh and on merits.
Before closing this matter, we also deem it appropriate to
observe that in this appeal, this Court, by the order dated 06.08.2018,
had stayed the proceedings before the Tribunal but then, by another
order dated 16.04.2019, it was made clear that the said stay order would
not stand in the way of other creditors in proceeding in accordance with
law, subject to the objections.
In continuity with the orders aforesaid, it is provided that further
proceedings before the Tribunal shall remain stayed until final decision
of appeal by the Appellate Tribunal but, neither pendency of the said
appeal nor any observations made in these proceedings shall be of any
effect on other proceedings, if taken up by other creditors, financial or
operational, which may be dealt with on their own merits.
Accordingly, this appeal is allowed to the extent and in the
manner indicated above; the impugned order dated 09.07.2018 passed
by the Appellate Tribunal in Company Appeal (AT) (Insolvency) No. 158
of 2017 is set aside; and the said appeal is restored for reconsideration
of the Appellate Tribunal. The parties present before us shall be stand at
notice to appear before the Appellate Tribunal at the first instance on
18.04.2022.
We would request the Appellate Tribunal to assign a reasonable
priority to this matter and to proceed expeditiously.
New Delhi; March 28, 2022.