Tribunal Upholds Ex-Parte Order, Rejects Debtor's Application, Emphasizes IBC Remedies

The Tribunal dismissed the application filed by the Corporate Debtor to set aside the ex-parte order and admission order, citing that the orders were made after due consideration and the application lacked merit. The Tribunal highlighted the availability of alternative remedies under the IBC, 2016 and the restrictions on its power to review its own orders.

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Issues:
Application under rule 11 of NCLT Rules, 2016 for setting aside ex-parte order and admission order.

Analysis:
The Corporate Debtor filed an application seeking to set aside the ex-parte order and admission order passed by the Tribunal. The Corporate Debtor alleged deficiencies in services provided by the Operational Creditor, leading to a shift in business operations and registered office. The Corporate Debtor claimed that proceedings were initiated without proper notice and that the CIR Process was conducted without their knowledge. The Corporate Debtor argued that no payment was due to the Operational Creditor due to deficient goods supply. On the other hand, the Operational Creditor contended that the Tribunal's orders were passed after proper service and that the application was time-barred. The Operational Creditor highlighted that the Corporate Debtor had alternative remedies available and that the Tribunal lacked the power to review its own orders.

The Corporate Debtor cited judgments to support the maintainability of their application, emphasizing the interest of justice and equity. The Operational Creditor, in response, relied on NCLAT judgments stating that inherent power should only be used when no other remedy is available and that the power of review must be granted by statute. The Tribunal considered the arguments from both parties and reviewed the facts of the case. It noted that the orders were passed after due consideration of the facts and circumstances. The Tribunal agreed with the Operational Creditor that the powers under Rule 11 of NCLT Rules could not be used to seek a recall or review of orders when alternative remedies were available under the IBC, 2016. Citing legal precedents, the Tribunal held that the application lacked merit and dismissed it.

In conclusion, the Tribunal dismissed the application filed by the Corporate Debtor seeking to set aside the ex-parte order and admission order, affirming that the orders were passed after due consideration and that the application was devoid of merit. The Tribunal emphasized the availability of alternative remedies under the IBC, 2016 and the limitations on the Tribunal's power to review its own orders.

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