Recall of ex parte order for non-service of notice should first be sought before the same adjudicating authority under tribunal rules.

Where an ex parte direction is challenged on the ground of non-service of notice, the proper course is to seek recall before the same adjudicating authority under the tribunal rules. The procedural scheme under Rules 37, 38, 49 and 105 of the National Company Law Tribunal Rules, 2016 allows the tribunal that passed the order to examine whether notice was duly served or whether sufficient cause prevented appearance, and then decide the recall application by a speaking order after hearing the opposite party. The appellate forum therefore directed the appellant to first invoke the recall mechanism before the adjudicating authority rather than have the merits examined in appeal.

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Issues: Whether the appellant, complaining of want of proper service and challenge to an ex parte direction, should be relegated to the remedy of moving the same adjudicating authority for recall under the relevant tribunal rules.

Analysis: The dispute centred on alleged non-service of notice in proceedings under section 19 of the Insolvency and Bankruptcy Code, 2016. The procedural framework under Rules 37, 38, 49 and 105 of the National Company Law Tribunal Rules, 2016 was considered. The order noted that an ex parte order can be sought to be set aside before the tribunal that passed it if the respondent satisfies that notice was not duly served or sufficient cause prevented appearance. In that setting, the appellate forum found it appropriate that the appellant first invoke the recall mechanism before the adjudicating authority, which could then examine the service issue and decide the application by a speaking order after notice to the opposite party.

Conclusion: The appeal was not decided on merits and the appellant was relegated to the remedy of filing a recall application under Rule 49 before the adjudicating authority.

Ratio Decidendi: Where an ex parte order is challenged on the ground of non-service of notice, the proper course is to seek recall before the same adjudicating authority under the tribunal rules rather than have the appellate forum determine the merits in the first instance.

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