2023 (1) TMI 394 - AT - Insolvency and Bankruptcy

Tribunal Upholds Insolvency Order, Emphasizes Timely Pleadings and Expedited Resolution

Nagarjuna Fertilizers & Chemicals Ltd. Versus IDBI Bank Limited, Registrar, National Company Law Tribunal

The Tribunal dismissed the Appeal challenging the Impugned Order dated 05.12.2022 under the Insolvency and Bankruptcy Code, 2016. It held that despite ... Completion of pleadings and filing of Counter - whether the pleadings were complete and whether this matter could be treated as a part heard matter and clubbed with the other connecting matters listed on 05.12.2022? - HELD THAT:- A perusal of all the Daily Orders relevant to this case and filed before us clearly shows that despite several opportunities given to the Appellant, from October, 2020 onwards till August, 2022 and despite imposition of Rs. 50,000/-, the Corporate Debtor failed to file the Reply for two long years and subsequently chose to file a Preliminary Counter. The Code is a Time Bound Proceeding which does not provide for filing a Preliminary Counter and subsequent Final Counter, which is nothing but delaying tactic adopted by the Appellant herein, in support of their submissions that the pleadings are not complete. The Orders dated 19.09.2022 & 25.11.2022 clearly show that all the pleadings have been completed and the Appellant/ Corporate Debtor has delayed the matter seeking several adjournments. The Hon’ble Supreme Court in a catena of Judgments, has time and again laid down that the IBC is a time bound process, and any such delays, is deprecated. No wonder, Speed is the essence of the Code. There is absolutely no error whatsoever in the impugned order, dated 05.12.2022, passed by the Adjudicating Authority. Accordingly, this Appeal is devoid of merits and the same is dismissed, to secure ends of Justice. Issues:1. Whether the pleadings were complete and if the matter could be treated as a part heard matter and clubbed with other connected matters listed on 05.12.2022.Analysis:1. The Appellant challenged the Impugned Order dated 05.12.2022 passed by the Adjudicating Authority under Section 61 of the Insolvency and Bankruptcy Code, 2016. The Appellant argued that the matter was treated as part heard unjustly as the pleadings were incomplete, and no counter was filed on merits. The Adjudicating Authority had deferred proceedings due to a stay, but when the matter was heard again, the Appellant had not filed their counter, leading to the issue at hand.2. The Financial Creditor opposed the Appeal, stating that the Corporate Debtor had multiple opportunities to file a reply but failed to do so. Despite adjournments and warnings of forfeiture of rights, the Corporate Debtor only filed a preliminary counter in August 2022. The Financial Creditor argued that the pleadings were complete, and the matter was partly heard, necessitating its continuation.3. The Deputy Registrar of NCLT filed a reply affirming that the pleadings were completed by a certain date, and the matters were being heard together. The Adjudicating Authority noted the completion of pleadings and scheduled further hearings, emphasizing the importance of expeditious resolution in line with the time-bound nature of the Insolvency and Bankruptcy Code.4. The Tribunal analyzed the sequence of events and orders, concluding that the pleadings were indeed complete. Despite numerous opportunities given to the Corporate Debtor, delays in filing the counter were noted. The Tribunal emphasized the time-bound nature of the Code and condemned any delay tactics. The Appeal was dismissed, affirming the completeness of pleadings and upholding the Impugned Order dated 05.12.2022.5. The Tribunal directed the Adjudicating Authority to proceed promptly with the case within five weeks, emphasizing adherence to the law and expeditious resolution. The judgment highlighted the importance of timely proceedings in insolvency cases and dismissed the Appeal without costs, aiming to serve the ends of justice effectively.