Tribunal Overturns Order, Restores Petition under I&B Code

The Tribunal set aside the Adjudicating Authority's order in CP (IB) No. 79/BB/2019, allowing the appeal by the Operational Creditor against the Educational Institute. The Tribunal found that the notices were duly served, justifying the ex parte proceeding due to the Respondent's absence. It deemed the Adjudicating Authority's direction to the Registrar of Companies inappropriate and not legally tenable. The Tribunal directed the Adjudicating Authority to restore the petition, admit it under section 9 of the I & B Code, 2016, and proceed lawfully.

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Issues involved:
- Compliance with statutory requirements under section 9 of the I & B Code, 2016
- Adequacy of notice served on the Respondent
- Consideration of debt and default without proper notice
- Adjudicating Authority's directions to Registrar of Companies

Compliance with statutory requirements under section 9 of the I & B Code, 2016:
The Appellant, an Operational Creditor, filed an appeal dissatisfied with the order of the Adjudicating Authority in CP (IB) No. 79/BB/2019. The Appellant provided housekeeping services to an Educational Institute, and invoices issued from March to December 2017 remained unpaid. The Appellant issued a demand notice in Form 3 on 12.06.2019, claiming a total due amount of &8377; 22,69,778/-. The Appellant contended that it had complied with the mandatory provisions of section 9(3) of the I & B Code, 2016, and the Respondent failed to honor the repayment commitment, leading to the Section 9 Application.

Adequacy of notice served on the Respondent:
The Adjudicating Authority observed that notices were served on the Respondent on multiple dates, but the Respondent did not appear or file a reply. The Appellant argued that the notices were duly served, and the absence of the Respondent justified proceeding ex parte as per NCLT Rules. The debt fell due on 01.02.2017, and the Application was filed within the limitation period, contrary to the Adjudicating Authority's view that it suffered from delay and laches.

Consideration of debt and default without proper notice:
The Adjudicating Authority's order raised concerns about considering debt and default without proper notice to the Respondent. The Appellant highlighted that notices were served, and the Respondent's failure to appear justified proceeding ex parte. The Adjudicating Authority's direction to the Registrar of Companies was deemed inappropriate, and the Tribunal set aside the impugned order, allowing the appeal.

Adjudicating Authority's directions to Registrar of Companies:
The Adjudicating Authority directed the Registrar of Companies to examine the Corporate Debtor's compliance with statutory requirements and take appropriate action, which the Tribunal found erroneous. The Tribunal held that such directions were not legally tenable, leading to the setting aside of the Adjudicating Authority's order. The Tribunal directed the Adjudicating Authority to restore the petition and pass an order of admission under section 9 of the I & B Code, 2016, proceeding in accordance with the law.

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