2024 (3) TMI 930 - AT - Insolvency and Bankruptcy

Financial creditor's transfer application rejected as no bias shown in Section 7 proceedings

The NCLAT Principal Bench dismissed an appeal challenging rejection of a transfer application. The case involved Section 7 proceedings by a financial ... Rejection of transfer application - proceedings were initiated by the Financial Creditor under Section 7 which proceedings were initially admitted and the application to recall the said order was rejected - HELD THAT:- The facts indicate that the order of admission of the CIRP and the order rejecting the application of the Corporate Debtor for recall of the order was set aside by this Tribunal on 26.09.2023 and thereafter Section 7 proceedings revived before the Adjudicating Authority to be proceeded and decided in accordance with law. There can be no dispute to the preposition of law that mere apprehension of bias is sufficient for transfer of a proceeding. The question is as to whether the facts and sequence of the events in the present case reflect any apprehension of bias. Having adverted to the submission and facts and sequence are fully satisfied that neither there is bias reflected nor any apprehension of bias which can be imputed the Bench hearing the matter. In the impugned order, Hon’ble President has looked into the submission and has rejected the application for transfer in which there are no error. Appeal dismissed. Issues:The appeal against the rejection of a transfer application by the Principal Bench is challenged on grounds of bias and procedural irregularities.Summary:The appellant contested the rejection of a transfer application against the order dated 01.03.2024, initiating proceedings under Section 7, which were revived after a previous appeal. The appellant sought dismissal of the petition as time-barred, leading to a series of hearings and objections. Allegations of bias were raised due to the handling of the case by the Adjudicating Authority, prompting the transfer application.The respondent argued against bias claims, highlighting the history of the case and the fairness of proceedings before the Adjudicating Authority. The respondent emphasized that all parties were given opportunities to present their arguments, and no prejudice was caused by the handling of the case. The respondent refuted the bias allegations and defended the Adjudicating Authority's decisions.After considering the arguments from both sides and reviewing the case records, the Tribunal acknowledged the previous order setting aside the Corporate Insolvency Resolution Process (CIRP) admission and the subsequent revival of Section 7 proceedings. The Tribunal addressed the appellant's grievances regarding the dismissal of the time-barred application and the subsequent hearings on merits and limitations.The Tribunal found no evidence of bias or procedural irregularities in the case, dismissing the appeal against the rejection of the transfer application. The Tribunal cited legal precedents and concluded that no bias or apprehension of bias was evident in the proceedings, upholding the decision to decline the transfer application.