NCLT's Reference to IBBI Order Post-Reservation of Judgment Does Not Violate Natural Justice: NCLAT

NCLT's Reference to IBBI Order Post-Reservation of Judgment Does Not Violate Natural Justice: NCLAT

Introduction

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has upheld an impugned order with observations on the appellant's conduct and the consideration of an IBBI order. The appeal was filed by the appellant, who restricted its contention to expunging certain remarks in the impugned order.

Factual Background

The appellant was appointed as the Resolution Professional (RP) of the corporate debtor, but was later replaced by a new RP. The appellant challenged the order before the NCLAT, seeking to expunge certain remarks made by the adjudicating authority.

Procedural Background

The appellant filed an application before the NCLT, which was allowed, and a new RP was appointed. The appellant did not challenge the order but sought to expunge certain remarks made by the adjudicating authority.

Issues

• The main issue before the NCLAT was whether the adjudicating authority erred in making certain observations in the impugned order.
• The appellant contended that the adjudicating authority made erroneous observations regarding the appellant's failure to pursue the application and ignoring a notice.

Contentions of the Parties

Appellant: The appellant argued that the adjudicating authority erred in observing that the appellant failed to pursue the application and ignored a notice. The appellant submitted that it filed the application on time, corrected defects, and it was listed before the tribunal. The appellant also contended that it did not receive the notice personally and only came to know about it through inspection.

Respondent: The respondent argued that the appellant's contentions were contradictory, and the appellant had previously admitted receiving the notice on the same day. The respondent also submitted that the IBBI order was passed post-reserving the matter, but it was forwarded officially to the tribunal and rightly taken note of.

Reasoning and Analysis

The bench of Justice Rakesh Kumar Jain (Member-Judicial) and Naresh Salecha (Member-Technical) observed that the appellant's letter dated 04.07.2023 proved that the appellant was aware of the notice, and it falsified the appellant's stand. The tribunal also noted that the appellant was negligent in pursuing the application and only followed the case from the website of the tribunal. Regarding the IBBI order, the bench noted that the appellant had not contended the IBBI order, and since a fact is not denied, it hardly matters if the opportunity of hearing was given to the appellant or not.

Implications

The judgment highlights the importance of diligence and integrity in pursuing applications before the tribunal. The NCLAT's decision underscores that the tribunal's observations were based on the appellant's conduct and the facts of the case.

Relief Sought

The appellant sought to expunge certain remarks made by the adjudicating authority in the impugned order. However, the NCLAT upheld the impugned order with observations on the appellant's conduct and the consideration of the IBBI order.

In this case the appellant was represented by Mr. Anuj Tiwari, Mr. K. Ahuja and Mr. Vaibhav Vats, Advocates.