Appellate Tribunal overturns order due to procedural errors, remits case for fair review.

The Appellate Tribunal allowed the appeal, setting aside the impugned order dated 30.04.2021 by the Adjudicating Authority due to serious material irregularity and patent illegality. The matter was remitted back to the Adjudicating Authority for further proceedings. The dispute over the Respondent's filing of Counter/Reply/Response was resolved in favor of the Respondent, as it was confirmed that the required response had been submitted. The Adjudicating Authority's failure to acknowledge the response led to a serious miscarriage of justice, prompting the Appellate Tribunal's intervention to rectify the error and ensure a fair determination based on natural justice and the law.

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Issues involved:
Challenge to the correctness, validity, propriety, and legality of the impugned order dated 30.04.2021 by the Appellant / Operational Creditor. Dispute regarding the Respondent's filing of Counter / Reply / Response to the main Petition IBA/1297/2019 before the Adjudicating Authority.

Analysis:

Issue 1: Challenge to the impugned order
The Appellant, an Operational Creditor, appealed against the impugned order dated 30.04.2021 passed by the Adjudicating Authority, National Company Law Tribunal, Division Bench - II, Chennai. The Appellant, dissatisfied with the order, approached the Appellate Tribunal, claiming that the order was incorrect in the eye of the law. The Appellant contended that the Adjudicating Authority dismissed the Application without costs, which the Appellant deemed as erroneous. The Appellate Tribunal, after thorough examination, found that the Adjudicating Authority had committed a serious material irregularity and patent illegality in passing the impugned order. Consequently, the Appellate Tribunal set aside the impugned order, allowing the appeal and remitting the matter back to the Adjudicating Authority for further proceedings.

Issue 2: Dispute over Respondent's filing of Counter / Reply / Response
The dispute arose over the Respondent's filing of Counter / Reply / Response to the main Petition IBA/1297/2019 before the Adjudicating Authority. The Appellant's Counsel argued that the Respondent had indeed filed the required response, contrary to the Adjudicating Authority's observation that no reply was submitted. The Appellate Tribunal, upon review, confirmed that the Respondent had filed a reply before the Adjudicating Authority, which the Respondent's Counsel did not dispute during the appeal proceedings. The Appellate Tribunal noted the Respondent's submission of a reply and the hearing of arguments during the order reservation process. The Adjudicating Authority's failure to acknowledge the Respondent's filing of the reply led to a serious miscarriage of justice, necessitating the Appellate Tribunal's intervention to rectify the error. Consequently, the Appellate Tribunal found the Adjudicating Authority's observation regarding the Respondent's failure to file a reply as erroneous and set aside the impugned order, directing the matter's restoration for further proceedings.

In conclusion, the Appellate Tribunal allowed the appeal, setting aside the impugned order dated 30.04.2021 and remitting the case back to the Adjudicating Authority for a fair and just determination based on the principles of natural justice and in accordance with the law. Both parties were granted the liberty to present their case before the Adjudicating Authority, emphasizing the importance of a reasoned order on merits uninfluenced by previous observations made by the Appellate Tribunal.

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