2023 (4) TMI 447 - AT - Insolvency and Bankruptcy

Tribunal overturns dismissal, orders restoration of company petition citing lack of reasons, emphasizes medical considerations.

The National Company Law Appellate Tribunal, Chennai, set aside the impugned order of dismissal in a case involving the restoration of a main company ... Correctness, validity and Legality of the Impugned Order of Dismissal - Proper and Correct address, as found in the Adjudicating Authority’s/ Tribunal’s Records and also in the Ministry of Corporate Affair’s Records - HELD THAT:- A Cursory Perusal of the Impugned Order passed by the Adjudicating Authority (National Company Law Tribunal, Hyderabad Bench, Court No – II) indicates that the Adjudicating Authority/ National Company Law Tribunal, Hyderabad Bench, Court - II had not spelt out anything about the Contents of the Memo preferred by the Petitioner/ Appellant and also not considered the aspect of Angina, the possibility of the Cardiologist, likely to rule out the possibility of any Thrombosis and advised to rest for Two Days. In this connection, this Tribunal, pertinently points out that the Adjudicating Authority/ Tribunal in the Impugned Order, had not said anything expressly or impliedly about the Prolonged Angina, of the Learned Counsel for the Appellant’s/ Petitioner’s Medical suffering. This Tribunal is of the considered view that the Impugned Order is bereft of Qualitative and Quantitative reasons, thereby leading to the miscarriage of Justice. Furthermore, it is the Prime Duty of an Adjudicating Authority/ Appellate Tribunal/ Competent Court of Law, whenever, it deals with an Application and at the time of passing of an Order, it has to evaluate the Pros and Cons of the respective Contentions advanced and also to assign reasons for arriving at a Proper and Just Conclusion, of course, by adverting to the Memo projected, dated 28/04/2022 and it is quite evident that the Memo speaks for itself, in respect of the Medical Emergency/ Inconvenience/ Suffering, of the Learned Counsel for the Petitioner/ Appellant. A reasoned Order will be the Heart and Soul of any Order to be passed in a Prudent and Rightful manner by an Adjudicating Authority/ Tribunal/ Competent Court of Law. This Tribunal is perforced to interfere with the Impugned Order, and sets aside the same, in the interest of Justice, subject to the condition that the Appellant, shall pay a Cost of Rs. 50,000/- (Fifty Thousand Rupees Only), to the Hon’ble Prime Minister’s National Relief Fund, of course, within a period of 8 Weeks, from Today and to produce the Copy of the receipt, before the Deputy Registrar, of the Adjudicating Authority/ National Company Law Tribunal, Hyderabad Bench, without Fail. Appeal disposed off. Issues involved:The issues involved in the judgment are the correctness, validity, and legality of the impugned order of dismissal, the restoration of the main company petition, and the failure of the adjudicating authority to consider medical reasons for non-appearance.Issue 1: Correctness of Impugned Order of DismissalThe appellant challenged the correctness of the impugned order of dismissal made by the adjudicating authority in IA(IBC)482/2022 in C.P. (IB) No. 598/7/HDB/2019. The appellant contended that the dismissal was unjust as it was based on a misunderstanding of the circumstances. The adjudicating authority had dismissed the petition for non-prosecution, citing previous instances of the petitioner's absence. However, the appellant argued that the dismissal was unwarranted as the learned counsel had genuine medical difficulties and had made a bona fide request for an adjournment. The tribunal found that the impugned order lacked qualitative and quantitative reasons, leading to a miscarriage of justice. Consequently, the tribunal set aside the impugned order in the interest of justice, with the appellant directed to pay a cost of Rs. 50,000 to the Prime Minister's National Relief Fund within 8 weeks.Issue 2: Restoration of Main Company PetitionThe appellant sought the restoration of the main company petition, which was dismissed by the adjudicating authority. The appellant had filed IA(IBC)482/2022 seeking to set aside the order of dismissal and restore the main petition. The adjudicating authority had dismissed the IA(IBC)482/2022 without proper reasons and without appreciating the facts presented by the appellant. The tribunal intervened, setting aside the impugned order and directing the restoration of the IA(IBC)482/2022 in C.P.(IB)598/7/HDB/2019. The appellant was instructed to pay a cost and produce the receipt within 8 weeks for the restoration to take effect.Issue 3: Failure to Consider Medical ReasonsThe tribunal noted the failure of the adjudicating authority to consider the medical reasons presented by the appellant's counsel for non-appearance. The appellant had submitted a memo detailing the counsel's medical condition, including a request for an adjournment due to prolonged angina. However, the adjudicating authority did not address these medical concerns in the impugned order. The tribunal emphasized that a reasoned order must evaluate all aspects presented, including medical emergencies, to ensure a just conclusion. Consequently, the tribunal set aside the impugned order and directed a fresh final order to be passed on merits, taking into account all factual and legal pleas raised by the parties.Conclusion:The National Company Law Appellate Tribunal, Chennai, intervened in the matter to rectify the legal infirmities in the impugned order of dismissal and ensure a fair and just resolution. The appellant's petition for restoration was granted, subject to the payment of a specified cost. The tribunal emphasized the importance of considering all relevant factors, including medical emergencies, in reaching a proper and just conclusion. The case was disposed of with directions for a fresh final order to be passed within 8 weeks, allowing the parties to present their factual and legal arguments impartially.