Tribunal upholds ex-parte order due to valid notice service via email under IBC Section 7

The Tribunal rejected the application challenging the ex-parte order under Section 7 of the IBC. Despite the CD's claims of improper notice service and Covid-19 restrictions, the Tribunal found that the notice was validly served via email, and the CD failed to respond, leading to the ex-parte order. Emphasizing the validity of electronic notice service, the Tribunal held it lacked authority to set aside its own order, dismissing the application without costs due to the CD's failure to demonstrate legal grounds for setting aside the order.

---

---

Issues:
Challenge to ex-parte order under Section 7 of IBC due to non-service of notice and Covid-19 restrictions.

Analysis:
The IA was filed by the applicant, challenging the ex-parte order dated 18.03.2020 admitting the application under Section 7 of the IBC by the FC - Bank of India. The applicant alleged that the notice of the proceeding was posted at the wrong address of the Company, and the CD only became aware of the proceedings through its counsel in New Delhi on 17.03.2020. The CD claimed that due to the Covid-19 pandemic, institutions and offices were closed, and they obtained notice from the website, presuming only urgent matters would be heard. The CD argued that the ex-parte order was passed without considering the report of the postal department, which indicated that notice was not served upon the CD. The CD contended that setting aside the ex-parte order was necessary to allow them to defend their case.

The CD further argued that the ex-parte order failed to consider the notice issued by the Bench on 15.03.2020, advising that only urgent matters would be heard due to Covid-19 restrictions. The CD emphasized the importance of the Principle of Natural Justice, specifically the right to be heard, and claimed that not setting aside the ex-parte order would violate this principle. The CD highlighted that failure to set aside the order would result in irreparable loss and prejudice to their defense.

After hearing both parties, the Tribunal noted that the FC had sent the petition copy to the CD via email and served the notice at the correct address as per the Master Data of the applicant Company. Despite this, the CD did not respond, leading to the ex-parte order admission on 18.03.2020. The Tribunal found that the CD had not approached the Tribunal with clean hands, as they conveniently omitted to acknowledge the notice sent via email. The Tribunal emphasized that service of notice via email or WhatsApp is considered valid as per legal precedents. As a Quasi-Judicial Authority, the Tribunal stated it had no power to review or set aside its own Company Petition Admission Order, leading to the rejection of the IA challenging the ex-parte order.

In conclusion, the Tribunal disposed of IA No.45 of 2020 without costs, as the challenge to set aside the ex-parte order was deemed legally unsustainable based on the service of notice and the CD's failure to respond appropriately to the proceedings.

---