Procedural fairness: order set aside and matter remitted for fresh hearing allowing impleadment and a right to reply.

Entitlement to profits accrued during the corporate insolvency resolution process required determination with the successful resolution applicant impleaded and heard; deciding the application without giving that party notice or opportunity to respond breached procedural fairness. For that reason the impugned order was set aside and the application revived for fresh consideration, with the appellant to be impleaded as a respondent and permitted to file a reply within two weeks; parties may seek fixation of a fresh hearing date and the Adjudicating Authority directed to decide expeditiously. No view was taken on merits.

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Issues: Whether the Adjudicating Authority erred in deciding I.A. No.2300 of 2023 concerning entitlement to profits accrued during CIRP without impleading and hearing the Successful Resolution Applicant, and whether the impugned order should be set aside and the I.A. revived for fresh consideration.

Analysis: The Resolution Plan in which the appellant was the Successful Resolution Applicant had been approved by the Committee of Creditors and by the Adjudicating Authority prior to the hearing and decision of I.A. No.2300 of 2023. The appeal record shows the application before the Adjudicating Authority was decided without the appellant being impleaded or given an opportunity to file a response, despite the decision having direct potential to affect the appellant's rights under the approved Resolution Plan. The appeal court noted that the issue raised in the application (entitlement to profits accrued during the CIRP) required consideration with the appellant heard, and that procedural fairness and necessity of being a party justified setting aside the impugned order and directing fresh consideration by the Adjudicating Authority.

Conclusion: The impugned order dated 11.03.2024 is set aside; I.A. No.2300 of 2023 is revived before the Adjudicating Authority; the Appellant is permitted to be impleaded as Respondent No.2 and to file a reply within two weeks; parties have liberty to apply for fixing a date for fresh consideration and the Adjudicating Authority is requested to decide the application expeditiously. No opinion is expressed on the merits of the contentions of the parties.

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