Ex-parte insolvency admission orders may be recalled for non-service of notice; Committee of Creditors constitution does not bar recall.

An ex-parte insolvency admission order may be recalled under Rule 49(2) of the National Company Law Tribunal Rules, 2016 where the respondent shows that notice was not duly served or that sufficient cause prevented appearance. The rule confers recall power in such cases and does not amount to a barred review. The constitution of the Committee of Creditors does not prevent recall on this ground where the recall application was moved before that stage and the challenge concerns non-service of notice, not withdrawal under Section 12A of the Insolvency and Bankruptcy Code, 2016. The refusal to recall was therefore set aside and the matter restored for fresh hearing.

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Issues: (i) Whether an ex-parte order admitting an insolvency petition could be recalled under Rule 49(2) of the National Company Law Tribunal Rules, 2016 on the ground that notice was not duly served. (ii) Whether constitution of the Committee of Creditors barred recall of the ex-parte admission order in the facts of the case.

Issue (i): Whether an ex-parte order admitting an insolvency petition could be recalled under Rule 49(2) of the National Company Law Tribunal Rules, 2016 on the ground that notice was not duly served.

Analysis: Rule 49(2) expressly empowers the Tribunal to set aside an ex-parte hearing where the respondent satisfies it that notice was not duly served or that sufficient cause prevented appearance. The record showed that the notices sent by post had returned unserved, and the challenge was directed to recall of ex-parte orders, not to a prohibited review. The rejection order proceeded on an incorrect understanding that the Tribunal lacked jurisdiction, whereas the governing rule itself conferred the power to recall an ex-parte order when service had failed.

Conclusion: The ex-parte admission order was liable to be recalled for want of due service, and the Tribunal had jurisdiction to do so.

Issue (ii): Whether constitution of the Committee of Creditors barred recall of the ex-parte admission order in the facts of the case.

Analysis: The bar relied upon in the cited precedent was confined to the specific context of withdrawal under Section 12A of the Insolvency and Bankruptcy Code, 2016 after constitution of the Committee of Creditors. That principle did not govern a case where recall was sought for non-service of notice, particularly where the application for recall had been moved before constitution of the Committee of Creditors. The factual basis for denying recall on this ground therefore did not apply.

Conclusion: Constitution of the Committee of Creditors did not bar recall in the present case.

Final Conclusion: The appellate challenge succeeded, the refusal to recall was set aside, and the matter was restored for fresh adjudication on merits after hearing the parties.

Ratio Decidendi: Where an insolvency admission order is passed ex-parte without due service of notice, the Tribunal may recall that order under Rule 49(2), and the later constitution of the Committee of Creditors does not defeat such recall when the application was filed prior to that stage.

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