Adjudicating Authority Upheld in Section 9 Application Appeal

The Adjudicating Authority did not violate the Principles of Natural Justice as sufficient opportunities were provided to the Corporate Debtor. The ex-parte proceedings were deemed justified due to the Corporate Debtor's consistent non-appearance. The recall application was considered invalid due to lack of genuine reasons and procedural defects. Consequently, the appeal was dismissed, upholding the Adjudicating Authority's decision to admit the Section 9 application.

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Issues Involved:
1. Whether the Adjudicating Authority violated the Principles of Natural Justice by not allowing the Corporate Debtor to make submissions.
2. Whether the Adjudicating Authority erred in proceeding ex-parte against the Corporate Debtor.
3. Whether the recall application filed by the Corporate Debtor was valid and should have been considered before admitting the Section 9 application.

Summary:

Issue 1: Violation of Principles of Natural Justice
The Appellant argued that the Adjudicating Authority violated the Principles of Natural Justice by not giving the Corporate Debtor an opportunity to make submissions. The Corporate Debtor's counsel was present on 23.11.2022 but was not heard because neither the IA nor vakalatnama was on record. The Appellant claimed that the summons were misplaced, causing a delay in appointing counsel.

Issue 2: Ex-Parte Proceedings
The Adjudicating Authority proceeded ex-parte against the Corporate Debtor after multiple notices and substituted service through newspaper publications. Despite these efforts, the Corporate Debtor failed to appear on several occasions, leading to the ex-parte order on 22.02.2022. The Corporate Debtor filed an IA to recall this order on 09.07.2022, which was kept in defect and not listed.

Issue 3: Recall Application
The recall application cited the misplacement of summons as the reason for non-appearance. The Adjudicating Authority noted that the Corporate Debtor had received the summons before 15.11.2021, when substituted service was ordered. The application for recall was filed only on 09.07.2022 and was never listed due to defects. The Adjudicating Authority observed that the Corporate Debtor had multiple opportunities to appear but failed to do so.

Conclusion:
The Adjudicating Authority did not violate the Principles of Natural Justice as reasonable opportunities were given to the Corporate Debtor. The ex-parte proceedings were justified due to the Corporate Debtor's repeated non-appearance. The recall application lacked bonafide reasons and was not listed due to defects. The appeal was dismissed, affirming the Adjudicating Authority's order to admit the Section 9 application.

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