2019 (9) TMI 966 - Tri - Insolvency and Bankruptcy

Tribunal permits Corporate Debtor to respond after advocate's absence, imposes cost.

The Tribunal allowed the Corporate Debtor's application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 to re-open the right to file a ... Re-opening the right of the applicant/Original Respondent - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of the NCLT Rules, 2016 - HELD THAT:- It was found that the case was proceeded ex-parte for the fault on the part of then advocate of the Corporate Debtor. It is an established law that due to the fault of the advocate, the litigant/party should not suffer. Otherwise also, when the matter has already been opened for clarifications from the side of the Financial Creditor, we find no reason to stop the Corporate Debtor to file his reply and advance arguments. Application allowed. Issues:Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 for re-opening the right to file a reply.Analysis:The application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 seeking to re-open the right of the applicant/Original Respondent to file their reply, which was closed by an earlier order. The Corporate Debtor engaged a lawyer upon learning about the pending Company Petition and signed a vakalatnama to protect their interests. However, the lawyer did not appear before the Adjudicating Authority on subsequent dates after an initial appearance, leading to the matter proceeding ex parte. The Corporate Debtor claimed that they were unaware of the lawyer's absence during the hearing on 13.03.2019, which resulted in the order being reserved. Subsequently, when the matter was listed again, the Corporate Debtor discovered the ex-parte proceedings and filed the instant application to seek permission to file a reply by recalling the earlier order.The Financial Creditor opposed the Corporate Debtor's prayer, alleging that the Corporate Debtor intentionally delayed the proceedings by not appearing before the Adjudicating Authority. Both parties presented their arguments, and upon reviewing the records, it was noted that the case was indeed heard in the absence of the Corporate Debtor on 13.03.2019, and further clarifications were sought on subsequent dates. The Financial Creditor's lawyer requested time for instructions regarding the Power of Attorney, while the Corporate Debtor's new lawyer filed an application to rehear the matter due to the ex-parte nature of the initial hearing caused by the absence of the previous lawyer.The Tribunal found that the case proceeded ex parte due to the fault of the Corporate Debtor's former advocate. It was established that a litigant should not suffer due to the fault of their advocate. Considering that the matter was already open for clarifications from the Financial Creditor's side, the Tribunal allowed the Corporate Debtor to file their reply and advance arguments. The Tribunal granted the Corporate Debtor two weeks to file their reply, along with an advance copy to the Financial Creditor, and imposed a cost of Rs. 20,000 to be paid to the Defence Welfare Fund. Consequently, the Tribunal allowed and disposed of the present application.