NCLAT upholds liquidator replacement after document handover failure, finds no natural justice violation

NCLAT dismissed the appeal challenging observations made against the erstwhile liquidator for failing to hand over documents to the new liquidator. The tribunal held that principles of natural justice were not violated as the appellant was present and heard on multiple dates regarding the handover issue. The court found no illegality in the adjudicating authority's decision to appoint an advocate commissioner to facilitate document transition and direct IBBI notification, noting the appellant failed to protest or provide bonafide submissions about completing the handover within the given timeframe.

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Issues involved:
The challenge in this appeal is to the Impugned Order dated 28.04.2023 passed by the 'Adjudicating Authority', National Company Law Tribunal, Chennai Bench-II, in IA/755/2022 in CP/1307/IB/2018, involving observations against the erstwhile Liquidator and the direction to forward compliance affidavit and report to IBBI.

Observations against the Erstwhile Liquidator:
The Appellant, the erstwhile Liquidator, contended that the Order was passed without giving him an opportunity to be heard, emphasizing delays in uploading the Order and handover process. The Advocate Commissioner's report was allegedly overlooked by the Adjudicating Authority, leading to adverse observations. The Appellant raised concerns about the new Liquidator's conduct and the fee increase for the Advocate Commissioner.

Compliance and Handover Process:
The new Liquidator sought compliance with the Order for handover of documents, highlighting the Appellant's non-compliance and selective document submission. The appointment of the Advocate Commissioner aimed to facilitate the handover process, with reports indicating cooperation from the new Liquidator's staff. The Adjudicating Authority dismissed the Appellant's claims of lack of cooperation and questioned the necessity of the fee increase for the Advocate Commissioner.

Principles of Natural Justice and Adherence to Orders:
The Appellant argued a violation of Principles of Natural Justice due to the passing of the Impugned Order in his absence. However, a review of the hearing dates and events showed the Appellant's presence and involvement in the proceedings related to the handover issue. The Adjudicating Authority's decision was based on the Appellant's actions and responses during the process, leading to the dismissal of the appeal.

Conclusion:
The National Company Law Appellate Tribunal upheld the Impugned Order, finding no illegality or infirmity in the decision. The Appellant was advised to address any further concerns before the IBBI, with no costs imposed on the parties.

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