Fair hearing in insolvency proceedings requires effective opportunity of hearing before revival of the matter is ordered

Revival of insolvency proceedings was held unsustainable where the appellant was not given an effective opportunity of hearing. Although the record initially suggested presence when the matter was reserved, a later correction order showed that counsel was not actually present, so the order reviving the proceedings was passed without representation for the appellant. This was treated as a breach of audi alteram partem and the requirement of fair hearing in a matter affecting the corporate debtor's rights. The impugned order was set aside and the matter remanded to the Adjudicating Authority for fresh decision after hearing the appellant.

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Issues: Whether the order reviving the insolvency proceedings was liable to be set aside and the matter remanded because the appellant was not afforded an effective opportunity of hearing.

Analysis: The record showed that the appellant's presence had been reflected when the matter was reserved, but the later correction order recorded that the appellant's counsel was not actually present. On that basis, the order reviving the proceedings was passed without representation for the appellant. The denial of participation in a matter affecting the corporate debtor's rights amounted to a breach of the principle of audi alteram partem and the requirements of fair hearing.

Conclusion: The impugned order could not be sustained and was set aside. The matter was remanded to the Adjudicating Authority for fresh decision after giving the appellant an opportunity of hearing.

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