Tribunal denies setting aside Ex-parte order under Insolvency & Bankruptcy Code 2016

The Tribunal dismissed the application seeking to set aside an Ex-parte order under Section 60(5) of the Insolvency & Bankruptcy Code, 2016. Despite the Corporate Debtor's lack of participation and delayed filing of the application, the Tribunal found insufficient evidence to justify setting aside the order. Emphasizing the importance of timely participation in legal proceedings, the Tribunal concluded that granting relief would not serve any purpose as there was no strong case on merits. The application was dismissed without costs, highlighting concerns over frivolous litigations delaying matters under the Code.

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Issues: Setting aside an Ex-parte order under Section 60(5) of the Insolvency & Bankruptcy Code, 2016

Detailed Analysis:

1. Background and Filing of Application: The application was filed under Section 60(5) of the Insolvency & Bankruptcy Code, 2016, seeking to set aside an Ex-parte order dated 09.09.2020 passed by the Adjudicating Authority in a specific case. The Corporate Debtor had not appeared before the Authority since the beginning of the proceedings, leading to the Ex-parte order.

2. Chronology of Hearings: The record detailed multiple hearings where the Corporate Debtor failed to appear before the Authority despite notices and opportunities. The series of hearings culminated in the Ex-parte order due to the continued absence of the Corporate Debtor, indicating a lack of diligence on their part.

3. Admission into CIRP and Appeal: The order admitting the Corporate Debtor into Corporate Insolvency Resolution Process (CIRP) was passed on merits, with notices served to the Corporate Debtor. An appeal was made against the Ex-parte order, which was withdrawn with permission to raise the issue of non-service of notice before the Adjudicating Authority.

4. Evaluation of Applicant's Claims: The Applicant failed to provide substantial evidence to justify setting aside the Ex-parte order. The lack of participation and delayed filing of the application post the NCLAT order raised questions about the Applicant's diligence and seriousness in the proceedings.

5. Decision and Reasoning: The Tribunal emphasized the importance of timely and responsible participation in legal proceedings. Despite arguments for further opportunities, the Tribunal noted that setting aside the Ex-parte order would not serve any purpose, especially when there was no strong case on merits. The Tribunal expressed concern over frivolous litigations hindering the timely disposal of matters under the Insolvency & Bankruptcy Code, 2016.

6. Final Ruling: The Tribunal concluded that the Applicant failed to establish grounds for setting aside the CIRP order. Consequently, the application was dismissed with no costs imposed. Another related application was also dismissed accordingly, and the issuance of an urgent certified copy of the order was directed upon request by concerned parties.

This detailed analysis encapsulates the key aspects and reasoning behind the Tribunal's judgment on setting aside an Ex-parte order under the Insolvency & Bankruptcy Code, 2016, providing a comprehensive overview of the case proceedings and the final decision reached by the Tribunal.

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