Case Note & Summary
The case involves an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016, filed by the Successful Resolution Applicant (SRA) challenging an order dated 31.05.2024 passed by the National Company Law Tribunal (NCLT), Hyderabad, in IA(IBC)(Liquidation) No.5/2024. The SRA had filed a counter affidavit via e-filing on 01.04.2024, which was accepted on record. However, when the matter was heard on 02.04.2024, the NCLT reserved orders on the IA and later delivered the Impugned Order on 31.05.2024 without mentioning the SRA's presence or considering its pleadings. The SRA contended that this violated principles of natural justice. The NCLAT, after hearing the counsels, found that the Impugned Order did not reflect the SRA's participation or its counter affidavit. Consequently, the NCLAT set aside the Impugned Order and remanded the matter back to the NCLT for fresh consideration, directing the NCLT to hear all parties and pass a fresh order within two months. The appeal was disposed of accordingly.
Headnote
A) Insolvency and Bankruptcy Code - Liquidation Proceedings - Right to be Heard - Section 61 of IBC, 2016 - The Successful Resolution Applicant (SRA) filed a counter affidavit via e-filing which was accepted on record, but the NCLT passed the Impugned Order without marking the SRA's presence or considering its pleadings - Held that the order is liable to be set aside for violation of principles of natural justice, and the matter is remanded back for fresh consideration after hearing all parties (Paras 1-6).
Issue of Consideration
Whether the Impugned Order passed by the NCLT, Hyderabad, without considering the counter affidavit filed by the Successful Resolution Applicant (SRA), is sustainable in law?
Final Decision
The Impugned Order dated 31.05.2024 is set aside. The matter is remanded back to the NCLT, Hyderabad for fresh consideration. The NCLT is directed to hear all parties and pass a fresh order within two months from the date of receipt of this order. The appeal is disposed of accordingly.
Law Points
- Natural justice
- Right to be heard
- Opportunity of hearing
- E-filing acceptance
- Adjudicating Authority's duty to consider pleadings
Case Details
2024 LawText (NCLAT) (01) 94
Company Appeal (AT) (CH) (Ins.) No. 242/2024 (IA Nos.644 & 645/2024)
Mr. P.H. Arvindh Pandian, Senior Advocate; Mr. Avinash Krishnan Ravi, Advocate (for Appellant); Mr. P. Ramesh Babu, Advocate (for R1); Mr. Pranava Charan, Advocate (for R2)
Consortium of M/s. Varma Steels Pvt. Ltd. & AVP Varma, SRA, Mata Energy Ltd.
CA B Nagabhushan RP, Mata Energy Ltd. & 2 Ors.
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Nature of Litigation
Appeal under Section 61 of IBC, 2016 against an order of NCLT, Hyderabad in liquidation proceedings.
Remedy Sought
Setting aside of the Impugned Order dated 31.05.2024 passed by NCLT, Hyderabad in IA(IBC)(Liquidation) No.5/2024.
Filing Reason
The Impugned Order was passed without considering the counter affidavit filed by the Appellant (SRA) and without marking his presence, violating principles of natural justice.
Previous Decisions
NCLT, Hyderabad passed the Impugned Order on 31.05.2024 in IA(IBC)(Liquidation) No.5/2024, which is challenged in this appeal.
Issues
Whether the Impugned Order is sustainable when it does not reflect the presence or pleadings of the Appellant (SRA) despite his counter affidavit being on record?
Submissions/Arguments
Appellant submitted that he filed a counter affidavit via e-filing on 01.04.2024 which was accepted on record, but the Impugned Order did not mention his presence or pleadings.
Appellant argued that the order was passed in violation of natural justice as he was not heard.
Ratio Decidendi
An order passed by an adjudicating authority without considering the pleadings of a party whose counter affidavit is on record and without marking its presence violates principles of natural justice and is liable to be set aside.
Judgment Excerpts
To his surprise, the order did not mark his presence and did not make any mention of his pleadings.
Primarily, our concern would be to the order passed on IA(IBC)(Liquidation) No.5/2024, which is observed as under: ...
Procedural History
The Appellant (SRA) filed a counter affidavit in IA(IBC)(Liquidation) No.5/2024 before NCLT, Hyderabad on 01.04.2024 via e-filing. On 02.04.2024, the NCLT heard the matter and reserved orders. On 31.05.2024, the NCLT passed the Impugned Order without considering the Appellant's counter affidavit. The Appellant then filed this appeal before NCLAT on 15.07.2024.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016: 61
