TaxTMI 
TaxTMI 
2023 (4) TMI 1027
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.... the case are: i. Dewan Housing Finance Corporation Limited (now Piramal Capital & Housing Finance Limited) by sanction letter dated 22.08.2018 has sanctioned a loan of Rs.20 Crores to the Corporate Debtor. ii. On 30.08.2018, the Corporate Debtor was disbursed an amount of Rs.10 Crore. Dewan Housing Finance Corporation Limited (DHFL) was taken over by an Administrator. At the instance of Reserve Bank of India, insolvency proceedings were initiated against the DHFL in CP(IB) No. 4258/MB/C-II/2019, in which petition an application was filed by the Corporate Debtor seeking a direction to disburse the balance loan amount of Rs.10 Crore. In the application, the Corporate Debtor has pleaded that the entire project being mortgaged with the DHFL, the Corporate Debtor is suffering due to non-disbursement of the balance amount of loan. The said application remained pending and ultimately resolution plan in the proceedings submitted by Piramal Capital & Housing Finance Limited was approved and the DHFL was taken over by the Piramal Capital. iii. Piramal Capital, on 28.09.2022, has filed an application for initiating the Corporate Insolvency Resolution Process against the Corporate Debto....
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....der. It is submitted that the Adjudicating Authority has proceeded exparte on 03.01.2023 and the order was delivered on 02.03.2023, there was sufficient time for the Appellant to file application under Rule 49 of the NCLT Rules, 2016, if it had any grievance against the Adjudicating Authority proceeding ex-parte. There is no sufficient cause shown by the Appellant to prove that he is entitled for giving any opportunity to file the reply. It was clearly mentioned in the order dated 02.12.2022 that the right to file the reply shall be forfeited if no reply is filed. It is submitted that the Adjudicating Authority has considered the facts stated in the Section 7 application and has not passed the order merely on the ground of non-filing of reply by the Corporate Debtor. The debt and default being proved under Section 7 application, no other issue need to be examined. It is submitted that the IBC Proceedings are proceedings which have to be decided in timelines, the statute provide 14 days' time to ascertain the existence of default, hence, the Adjudicating Authority did not commit any error in admitting Section 7 application. 4. Learned counsel for both the parties have relied of jud....
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.... the Corporate Debtor did not appear after issuance of notice, and the Ld. Adjudicating Authority did not even provide a single opportunity to the Corporate Debtor. A copy of cause list dated 03.01.2023 is annexed hereto and marked as Annexure A5." 8. The Adjudicating Authority in the impugned order has observed that the Respondent despite having undertaken to file reply has not responded, hence, he has been proceeded against as ex-parte. The Adjudicating Authority has returned its findings in Paras 10, 11 and 12, which are to the following effect: "10. As per Clause 3.1 of the Loan Agreement dated 27.08.2018, the loan was repayable by way of monthly instalments from the date of first disbursement, the Petitioner has referred to Exhibit-O which shows that the Corporate Debtor paid interest only up to 16.06.2019 and thereafter stop making payment. Therefore, the date of default in this case is 15.07.2019 as rightly claimed in Part-IV of the Petition. Thereafter, the Petitioner served a recall notice (Exhibit-P) dated 11.11.2019 but despite the receipt of the default notice, the Corporate Debtor failed to make the payment. The Respondent has not come forward to contest the presen....
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....filed by the Corporate Debtor on the first date of hearing, he shall have no right to claim any time for filing a reply. In event we accept the submission of the Respondent, sub-rule (3) of Rule 37 has to be read to mean that in the event on the date of hearing, no reply is filed by the Corporate Debtor and it has been served with the notice of filing reply, its right to file reply shall be forfeited. As noted above, sub-rule (3) of Rule 37 does not provide for any consequence in event of non-filing of reply before the next date of hearing. Rule 37 is procedural Rule and procedural Rules are there to assist the adjudication of the dispute by Adjudicating Authority. Rule 37, subrule (3) cannot be read to mean that on non-filing of reply by the Corporate Debtor before the date of hearing, he can neither ask for any time, nor can be granted any time by the Adjudicating Authority to file the reply. 11. In the above reference, we may notice sub-rule (2) of Rule 37, which provides that if the Respondent does not appear on the date specified in Company Appeal (AT) (Insolvency) No. 464 of 2022 8 the notice in Form No.NCLT-5, then the Tribunal after according reasonable opportunity to th....
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.... Authority has ample jurisdiction to consider any request for reasonable time by a Corporate Debtor for filing a reply. The Tribunal is fully entitle to grant time for filing a reply asked for by the Corporate Debtor on the first date of hearing. Rejecting the request of the Corporate Debtor on the very first day for grant of time to file a reply, cannot be said to be in consonance with the principles of natural justice. There can be no dispute that in appropriate case, if the Adjudicating Authority is satisfied that the Corporate Debtor is deliberately delaying the matter, the request for grant of any further time to file a reply can be refused. But present is not a case where it can be said that Corporate Debtor was delaying the disposal of the case, since 29.03.2022 was the first date of hearing as indicated in the notice served on the Corporate Debtor on 07.03.2022." 10. The above is a case where the Adjudicating Authority did not grant any time to the Corporate Debtor on the first date of hearing, hence, this Tribunal held that rejecting the request of the Corporate Debtor for time to file reply on the very first day of hearing is denial of principles of natural justice. In ....
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.... with the order dated 03.03.2022. 13. The question which needs to be considered in the facts of the present case is whether Appellant has made out any cause to grant one more opportunity to file its reply before the Adjudicating Authority. As noted above, the Corporate Debtor does not deny that it had appeared with his counsel on 02.12.2022 before the Adjudicating Authority and prayed for time for filing reply. Appellant has also stated in Additional Affidavit dated 06.04.2023 filed in this Tribunal that counsel was given instructions to file reply, however, same could not be prepared and filed on 03.01.2023. This Tribunal in Ashok Tiwari's Case has laid down that the Adjudicating Authority is fully empowered to proceed and pass appropriate order if it is satisfied that the Corporate Debtor is delaying the proceeding. We may further notice that in the present case, the Adjudicating Authority has admitted Section 7 application and it has much weighed with the Adjudicating Authority that the Corporate Debtor having not filed any reply, averments made in the petition are being deemed to be admitted by the Corporate Debtor. 14. We have noticed above that the loan was taken by the Cor....