2019 (12) TMI 783 - Tri - Insolvency and Bankruptcy

Tribunal dismisses application, lifts CIRP stay, directs directors to assist IRP.

Oriental Bank Of Commerce Versus M/s. George Distributors Private Limited And Atin Arora Versus Mr. Hiralal Prasad

Oriental Bank Of Commerce Versus M/s. George Distributors Private Limited And Atin Arora Versus Mr. Hiralal Prasad - TMI Issues Involved:1. Jurisdiction of the Tribunal.2. Service of notice to the Corporate Debtor.3. Alleged suppression of facts by the Financial Creditor.4. Waiver and acquiescence by the Corporate Debtor.Issue-wise Detailed Analysis:1. Jurisdiction of the Tribunal:The primary argument by the Applicant was that the Tribunal did not have the jurisdiction to entertain the application or pass the impugned order dated 5th September, 2019, as the registered office of the Corporate Debtor had shifted from Kolkata to Odisha on 16th January, 2018. The Tribunal, however, noted that at the time of filing the petition, it had the necessary territorial jurisdiction since the Cuttack Bench had not started functioning until 18th March, 2019. Therefore, the Tribunal had the jurisdiction to entertain the subject matter under Section 7 of the Insolvency and Bankruptcy Code, 2016, on the date of filing.2. Service of Notice to the Corporate Debtor:The Applicant contended that the Corporate Debtor was not served with any notice at its registered office in Odisha and did not receive a copy of the application with annexures. The Tribunal found that notices were sent by registered speed post and by email, and a notice was published in newspapers. The Corporate Debtor acknowledged receipt of the email notice but did not appear or contest the proceedings. The Tribunal concluded that the Corporate Debtor had ample opportunity to contest but chose not to, implying acquiescence.3. Alleged Suppression of Facts by the Financial Creditor:The Applicant argued that the Financial Creditor suppressed the fact that the registered office had changed to Odisha, which was within their knowledge. The Tribunal found no merit in this argument, noting that the Financial Creditor had sent notices to the last known address and by email. The Tribunal emphasized that the Corporate Debtor had not informed the Tribunal about the change of address during the proceedings, which could have altered the course of the case.4. Waiver and Acquiescence by the Corporate Debtor:The Financial Creditor argued that the Corporate Debtor had waived its right to contest jurisdiction by not appearing in the proceedings despite being aware of them. The Tribunal referenced several Supreme Court judgments, noting that objections to territorial jurisdiction could be waived if not raised timely. The Tribunal held that the Corporate Debtor's failure to contest the proceedings at the appropriate time amounted to a waiver of the jurisdictional objection.Conclusion:The Tribunal dismissed the application, finding no substance in the arguments advanced by the Applicant. The Tribunal emphasized that it had the necessary jurisdiction at the time of filing and that the Corporate Debtor had received sufficient notice but chose not to participate in the proceedings. The Tribunal vacated the stay on the Corporate Insolvency Resolution Process (CIRP) and directed the directors of the Corporate Debtor to cooperate with the Interim Resolution Professional (IRP).Orders:- The application C.A.(IB) No. 1285/KB/2019 in CP(IB) No. 107/KB/2019 was dismissed.- The stay on the CIRP was vacated.- The period taken for disposal of the application was excluded from the 180-day CIRP timeline.- The directors/promoters of the Corporate Debtor were directed to assist the IRP/RP.- The case was listed for further progress report on 18/12/2019.- The registry was directed to communicate the order to the parties by speed post and email.