2020 (9) TMI 339 - Tri - Companies Law

Tribunal Grants Urgent Hearing in Company Petition Dispute

The Tribunal allowed the applicant's request for urgent hearing and disposal of the Company Petition due to significant financial implications. Despite ... Urgent hearing and disposal of petition - It is submitted by the applicant that delay in hearing and disposal of the main petition led to significant losses for the creditors and therefore, the petition may be taken up for urgent hearing through videoconference at the earliest - HELD THAT:- The Tribunal should not be swayed by the communication dated 24.04.2020 issued by the Ministry of Corporate Affairs in deciding the IA as this Tribunal is a statutory authority. We agree with the contention. However, the said communication dated 24.04.2020 cannot be seen in isolation. It has to be viewed in view of the fact that huge financial defaults will cause adverse impact on the economy of the country. Further, Government of India has announced unlocking of the lockdown effective from 08.06.2020. Almost all Governmental organizations are functioning, albeit with some restrictions. Even though the pandemic situation does prevail, near normalcy is restored with lot of safeguards and precautions. As such we are not in a position to agree with the contention of the learned counsel for the respondent/Corporate Debtor in this regard. After the restrictions of lockdown getting relaxed, this Tribunal is also hearing matters on regular basis, wherever urgency is felt. The main Company Petition is posted for regular hearing on 01.07.2020 - application disposed off. Issues Involved:1. Urgent hearing and disposal of the Company Petition (CP).2. Alleged suppression of material facts and documents by the applicant.3. Impact of COVID-19 pandemic on the proceedings.4. Validity and influence of the Ministry of Corporate Affairs' communication on the Tribunal's decision-making.Issue-wise Detailed Analysis:1. Urgent Hearing and Disposal of the Company Petition (CP):The applicant, a financial institution, sought urgent hearing and disposal of CP (IB) No. 43/7/HDB/2020 through videoconference. The Tribunal noted that the Company Petition was filed on 20.12.2019 and listed for the first time on 23.01.2020. Despite multiple listings, the Corporate Debtor had not filed a counter. The Tribunal recognized the urgency due to the significant financial impact and allowed the application, scheduling the main petition for regular hearing on 01.07.2020.2. Alleged Suppression of Material Facts and Documents by the Applicant:The respondent objected to the urgent hearing, alleging that the applicant suppressed crucial documents such as the Facility Agreement, Debenture Trust Deed, and Inter-Creditor Agreements. The applicant denied these allegations, stating that all relevant documents were filed and accessible to the respondent before the COVID-19 lockdown. The Tribunal found no merit in the respondent's claims of suppression and mala fide intentions.3. Impact of COVID-19 Pandemic on the Proceedings:The respondent argued that the pandemic hindered their ability to access documents and prepare counterarguments. The Tribunal dismissed this argument, noting that the application was filed before the pandemic and lockdown. The Tribunal emphasized that near normalcy had been restored with safeguards, and the proceedings should not be delayed further.4. Validity and Influence of the Ministry of Corporate Affairs' Communication:The respondent contended that the Tribunal should not be influenced by the Ministry of Corporate Affairs' communication dated 24.04.2020, advising urgent hearings for cases involving significant financial defaults. The Tribunal agreed that it is an independent judicial forum but acknowledged the communication's relevance due to the substantial economic impact of large financial defaults. The Tribunal concluded that the communication could not be ignored entirely and decided to proceed with the urgent hearing.Findings and Conclusion:The Tribunal allowed the application for urgent hearing, recognizing the significant financial implications and the need to address the matter promptly. The main Company Petition was scheduled for regular hearing on 01.07.2020, and the application was disposed of accordingly.