Appellate Tribunal revives matter following successful recall application under Rule 49

The Appellate Tribunal allowed the appeal, setting aside the order dated 21st June, 2023, and reviving the matter before the Adjudicating Authority for further proceedings. The Appellant successfully filed a recall application under Rule 49 of NCLT Rules, 2016, demonstrating sufficient cause for the recall of the order. The issues involved encompassed the dismissal of the application, service of notice, procedural irregularities, challenges to the order, maintainability of the appeal, and the statutory remedy provided under Rule 49 of NCLT Rules, 2016.

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Issues Involved:
The issues involved in the judgment are the dismissal of an application to recall an order, the service of notice on the Corporate Debtor, the procedural irregularity in passing the order, the challenge to the order, the maintainability of the appeal, and the statutory remedy provided under Rule 49 of NCLT Rules, 2016.

Dismissal of Application to Recall Order:
The appeal was filed against the dismissal of an application to recall an order dated 21st June, 2023, which was filed by the Appellant after the Adjudicating Authority admitted a Section 7 Application against the Corporate Debtor-Krystal Stone Exports Ltd. The Appellant contended that the notice was not effectively served on them, as the registered office in Mumbai was in the possession of the official assignee since 2013, and the Financial Creditor failed to serve the Appellant at their Jaipur office address, which was known to them.

Service of Notice on Corporate Debtor:
The Adjudicating Authority passed an order on 2nd July, 2019, directing the service of notice by Email and Publication in newspapers, as the notice sent to the Corporate Debtor was returned with the remark "left." The Financial Creditor was aware of both the Mumbai and Jaipur addresses of the Corporate Debtor, but no service was effected by email. The Adjudicating Authority proceeded with the matter based on the publication in newspapers, even though the Appellant was not served.

Procedural Irregularity in Passing Order:
The Adjudicating Authority observed that the Corporate Debtor did not appear or file an objection against the admission of the application, and the remedy for the Corporate Debtor was to file an appeal against the admission order. However, the Appellant argued that the Adjudicating Authority committed an error in rejecting the application and that the remedy of the Corporate Debtor was not limited to filing an appeal.

Challenge to Order and Maintainability of Appeal:
The Respondent opposed the appeal on the grounds that the Appellant did not challenge the original order dated 24.09.2019, making the appeal not maintainable. The Respondent relied on a judgment regarding the maintainability of Special Leave Petitions against an order of dismissal of review when the original order is not challenged.

Statutory Remedy Provided under Rule 49 of NCLT Rules, 2016:
The Appellant filed a recall application under Rule 49 of NCLT Rules, 2016, seeking to recall the order dated 24.09.2019. The Appellate Tribunal found that the Appellant had made out a sufficient cause for the recall of the order and allowed the appeal, setting aside the order dated 21st June, 2023, and reviving the matter before the Adjudicating Authority for further proceedings.

This summary provides a detailed overview of the issues involved in the judgment, including the dismissal of the application, the service of notice, procedural irregularities, challenges to the order, the maintainability of the appeal, and the statutory remedy under Rule 49 of NCLT Rules, 2016.

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