Appellate Tribunal overturns order for lack of natural justice in winding-up transfer petition.

The Appellate Tribunal set aside the impugned order due to the violation of natural justice principles in a case related to a transfer petition of winding-up. The case was remitted back to the Adjudicating Authority for determining the professional fee of the Interim Resolution Professional and was closed due to a settlement between the parties. The Tribunal emphasized the importance of issuing a limited notice to the corporate debtor before admitting a case to ascertain default, without always requiring a hearing opportunity for the Corporate Debtor.

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Issues: Violation of natural justice in passing the impugned order without notice to the appellant, applicability of principles of natural justice in admitting a case for ascertainment of default, remittance of the case for deciding the professional fee of Interim Resolution Professional and closure of the case due to settlement.

In this case, the appellant appealed against a judgment passed by the Learned Adjudicating Authority in a matter related to a transfer petition of winding-up under specific sections of the Companies Act, 1956. The Adjudicating Authority treated the respondent's application as one under Section 9 of the Insolvency and Bankruptcy Code, 2016, without notice to the appellant. The appellant contended that the impugned order violated the rules of natural justice and highlighted a settlement with the respondent, including a partial payment made. The respondent acknowledged the lack of notice to the appellant, and it was noted that no appearance was made on behalf of the Corporate Debtor during the proceedings.

Referring to the case of "Innoventive Industries Ltd. Vs. ICICI Bank & Anr.," the Appellate Tribunal emphasized the importance of issuing a limited notice to the corporate debtor before admitting a case to ascertain the existence of default and ensure completeness of the application. The Tribunal clarified that adherence to natural justice principles did not always necessitate providing a hearing opportunity to the Corporate Debtor before passing an order. Consequently, the Tribunal set aside the impugned order due to the violation of natural justice principles.

The Tribunal remitted the case back to the Adjudicating Authority in New Delhi to determine the professional fee of the Interim Resolution Professional, if appointed, and instructed the appellant to pay any outstanding amount. The case was directed to be closed considering the settlement between the parties. The appeal was allowed with the specified observations, and no costs were awarded in the circumstances of the case.

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