TaxTMI 
TaxTMI 
TaxTMI 
2021 (9) TMI 929
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....bunal, Rules, 2016 was disposed of on the ground that at belated stage the Adjudicating Authority is unable to use power under Rule 49 of National Company Law Tribunal Rules, 2016. 2. Brief facts of this case are that SGV Foils Pvt. Ltd. (Operational Creditor) filed an Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the Corporate Debtor Jay Polypack Pvt. Ltd. The Adjudicating Authority vide ex-parte order dated 27.05.2020 admitted the Application and initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. On 06.11.2020 the Corporate Debtor has filed an Application I.A. No. 780 of 2020 under Section 424 (1) of the Act r/w rule 11 of NCLT, Rules stating that the Applicant (Corporate Debtor) could not remain present before the Adjudicating Authority due to non-receipt of notices. The Applicant came to know of the ex-parte order dated 27.05.2020 only during a conversation with a bank employee on 06.10.2020, thereafter the Applicant immediately contacted the IRP and sent an email on 09.11.2020 requesting him not to proceed further with the CIRP and also informed him about the intention to approach the Adjudicating Aut....
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....otice was not duly served on the Applicant (Corporate Debtor), therefore, the Adjudicating Authority in exercise of power under Rule 49 (2) of NCLT Rules can set aside the ex-parte order passed against the Applicant (Corporate Debtor). For this purpose cited the Judgment passed by this Appellate Tribunal in the case of M/s AKJ Fincap Ltd. Through Authorized Representative Vs. Bank of India in CA (AT)(Ins) NO. 178 of 2021. 7. Ld. Counsel for the Appellant submitted that the Respondent No. 1 (Operational Creditor) himself stated that there was failure to inform the Applicant (Corporate Debtor) about next date of hearing despite there being orders of the Adjudicating Authority to inform the date of hearing to the Applicant. Notice has to be served only through a procedure prescribed in Rule 6 (2) of the NCLT Rules. The Operational Creditor was aware of these facts and chose to serve Form-3 through email. The Appellant replied with the notice of dispute dated 15.06.2018. The Operational Creditor has conveniently omitted to place the notice of dispute on record which amounts to gross suppression of material facts. 8. Ld. Counsel for the Appellant further submitted that this Appellate ....
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....ice of the Application was sent to Registered Address of the Corporate Debtor the same is returned with remark left, the notice is deemed to have been served on the Corporate Debtor. For this proposition cited the Judgment of Hon'ble supreme Court in the Case of State Trading Corporation of India Ltd. Vs. Spacevision Impax Pvt. Ltd. 2019 SCC Online NCLT 9770. It is also submitted that once the CoC has been constituted then the Operational Creditor and Corporate Debtor are bound by the procedure prescribed under Section 12A of the IBC r/w Regulation 30 A of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate persons) Regulations, 2016 (Regulations) as held by the Hon'ble Supreme Court in the case of Swiss Ribbons Pvt. Ltd. Vs. Union of India 2019 (4) SCC 17 Para (82). Therefore, it is requested that there is no merits in this Appeal and the Appeal may be dismissed. 13. After hearing Ld. Counsel for the parties, we have gone through the record. 14. The issue arises before our consideration is whether the Ld. Adjudicating Authority in exercise of power under rule 49(2) of the NCLT Rules 2016 can set aside the ex-parte order for initiating a Corporat....
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....re the Adjudicating Authority, being a collective proceeding, is a proceeding in rem. Being a proceeding in rem, it is necessary that the body which is to oversee the resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. A question arises as to what is to happen before a committee of creditors is constituted (as per the timelines that are specified, a committee of creditors can be appointed at any time within 30 days from the date of appointment of the interim resolution professional). We make it clear that at any stage where the committee of creditors is not yet constituted, a party can approach the NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule 11 of the NCLT Rules, 2016, allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the concerned parties and considering all relevant factors on the facts of each case." 20. With the aforesaid preposition of law, it is settled that once the Application under Section 7 or 9 is admitted and CIRP initiated, such proceeding is in rem. Being a proceeding in rem, it is necessary that the body which is to overs....