TaxTMI 
TaxTMI 
2017 (9) TMI 1565
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd passed order of moratorium with certain observations and directions in terms of 'I & B Code'. 2. Learned Counsel for the appellant submitted that the impugned order was passed by the Adjudicating Authority in violation of Rules of natural justice without giving any notice to the Appellant - 'Corporate Debtor'. 3. It was also submitted that no post filing notice under Rule 4(3) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as 'Adjudicating Authority Rules') was given by the respondent - "Financial Creditor". A notice was served on appellant, purported to be a notice under Rule 4(3), was pre filing notice with wrong date of admission of the application mentioned therein. 4. It was further submitted that a record of default recorded with the information utility or a record of default available with any Credit Information Company (CIBIL) or copies of entries in Banker's book in accordance with the Bankers Book Evidence Act, 1891 as required in terms of Form - I read with Rule 4 of the Adjudicating Authority Rules was not filed. Reliance was also placed on sub-section (3) of Section 7....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the record. 10. In "MIs Innoventive Industries Limited Vs. ICICI Bank & Ann" - Company Appeal (AT) (Insol.) No. 1 & 2 of 2017, this Appellate Tribunal by judgement dated 15th May 2017, noticed the exception of the principle of rules of natural justice, as follows: - "42. From the aforesaid decisions of Hon'ble Supreme Court, the exception on the Principle of Rules of natural justice can be summarised as follows: - (i) Exclusion in case of emergency, (ii) Express statutory exclusion (iii) Where discloser would be prejudicial to public interests (iv) Where prompt action is needed, (v) Where it is impracticable to hold hearing or appeal, (vi) Exclusion in case of purely administrative matters. (vii) Where no right of person is infringed, 5 (viii) The procedural defect would have made no difference to the outcome. (ix) Exclusion on the ground of 'no fault' decision maker etc." 11. In the said case this Appellate Tribunal, taking into consideration the facts that though notice was not issued to "M/s Innoventive Industries Limited" (Appellant), but the said appellant having appeare....
X X X X Extracts X X X X
X X X X Extracts X X X X
....13. For the same reason, we also reject the plea taken by the appellant that the notice under Rule 4(3) of the Adjudicating Authority Rules was a pre filing notice, wrong date of hearing having shown therein. 14. Whether enclosures of record of default or copies of entries in Banker's Book as required in terms of Form - 1, read with Rule 4 of the Adjudicating Authority Rules and sub-section (3) of Section 7 of the 'I & B Code', is mandatory or not fell for consideration before this Appellate Tribunal in "Neelkanth Township and Construction Pvt. Limited. Vs. Urban Infrastructure Trustees Limited" - Company Appeal (AT) (Insolvency) No. 44 of 2017 by its judgement dated 11th August 2017. In the said case, this Appellate Tribunal held: "18. It is well settled that rules of procedure are to be construed not to frustrate or obstruct the process of adjudication under the substantive provisions of law. A procedural provision cannot override or affect the substantive obligation of the adjudicating authority to deal with applications under Section 7 merely on the ground that Board has not stipulated or framed Regulations with regard to sub-section 3(a) of Section 7. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dence of default specified, "the documents", 'record' and 'evidence of default' prescribed at Part V of Form-1, of the Adjudicatory Rules 2016 will hold good to decide the default of debt for the purpose of Section 7 of the 'I &BCode'. 21. We further hold that the 'Regulations framed by the Board' being subject to the provisions of I & B Code' and rules framed by the Central Government under Section 239, 'Part V of Form - 1' of Adjudicating Authority Rules, 2016 framed by Central Government relating to 'documents', 'record' and 'evidence of default', will override the regulations, if framed by the Board and if inconsistent with the Rule. However, it is always open to Board to prescribe additional records in support of default of debt, such as records of default recorded with the information utility or such other record or evidence of default in addition to the records as mentioned in Part V of Form-I. 22. At this stage, it is pertinent to note that the Board has also framed Insolvency Resolution Process for Corporate Persons, Regulations, 2016 ('Corporate Persons Regulation' for short). It....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion it is necessary to refer to Section 17, which reads as follows: - "17. Management of affairs of corporate debtor by interim resolution professional. - (1) From the date of appointment of the interim resolution professional, - (a) the management of the affairs of the corporate debtor shall vest in the interim resolution professional; (b) the powers of the board of directors or the partners of the corporate debtor, as the case may be, shall stand suspended and be exercised by the interim resolution professional; (c) the officers and managers of the corporate debtor shall report to the interim resolution professional and provide access to such documents and records of the corporate debtor as may be required by the interim resolution professional; (d) the financial institutions maintaining accounts of the corporate debtor shall act on the instructions of the interim resolution professional in relation to such accounts and furnish all information relating to the corporate debtor available with them to the interim resolution professional. (2) The interim resolution professional vested with the management of the corporate ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....;Corporate Debtor' has a right to prefer an appeal under Section 61, apart from any other aggrieved person like Director(s) of the company or members, who do not cease to be Director(s) or member(s), as they are not suspended but their function as 'Board of Director(s)' is suspend. 19. The 'Corporate Debtor' if represented before the Adjudicating Authority through its Board of Directors or any person authorised by Board of Director or its officers, for the purpose of preferring an appeal, no objection can be raised that the 'Corporate Debtor' cannot appear through its Board of Directors or authorised person or officer through whom 'Corporate Debtor' represented before the Adjudicating Authority. Once a 'Corporate Debtor' appeared before the Adjudicating Authority through its Board of Director(s) or its officers or through authorised person and is heard before admission of an application under '1 & B Code', being aggrieved such 'Corporate Debtor' cannot prefer an appeal under Section 61 on the ground that the 'Corporate Debtor' appeared through another person 'Interim Resolution Professional', though h....