Suchi Paper Mills Ltd. & Ors. …Appellant Versus Ashish Gupta
CA (AT) Ins 830 of 2020
Facts:
1.Phoneix ARC Pvt. Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short ‘Code’) for initiation of Corporate Insolvency Resolution Process (in short ‘CIRP’) against Anush Finlease & Construction Pvt. Ltd. (Corporate Debtor), which was admitted on 30.05.2019 and Ashish Gupta was appointed as an Interim Resolution Professional.
2.RP invited Expression of Interest (in short ‘EOI’) by publication of Form G. M/s Kendriya Bhandar submitted its plan. Two unnumbered applications came to be filed one by the RP and other by the Resolution Applicant seeking approval of the resolution plan approved by the CoC of the Corporate Debtor with 77.54 which was allowed by the AA on 01.04.2020.
Issue: Whether the order passed is correct or not ?
Arguments:
Appellant:
1.Counsel for Appellant has submitted that firstly, the impugned order has been passed by a single member which is contrary to the provision of Section 419(3) of the Companies Act, 2013. It was further that no such notification has been issued by the president for the purpose of holding the Court by a single member, therefore, the impugned order is hit by coram non-juris.
2.Counsel further submitted that impugned order is totally nonspeaking and hit by principles of natural justice. In this regard, he has referred to the last paragraph (4) of the impugned order to contend that the Adjudicating Authority has approved the resolution plan under Section 31 of the Code only on the basis of the approval given by the CoC without recording.
Decision: NCLAT allowed the appeal and set aside the order.
Rationale:
1.NCLAT noted that it is very much clear from the bare reading of Section 419(3) of the Act that the powers of the Tribunal shall be exercisable by Benches consisting of two Members out of whom one shall be a Judicial Member and the other shall be a Technical Member but still a single Judicial Member can exercise the powers of the Tribunal in respect of such class of cases or such matters pertaining to such class of cases, as the President may, by general or special order, specify.
2.It held that In the present case which is pending since 2020, nothing has been brought on record by the Respondents that there has been a notification in this regard much less in terms of first proviso to Section 419 (3) of the Act authorising the solitary judicial member to entertain unnumbered applications filed by RP and Resolution Applicant to decide the same in such a summary manner.
3.It held that impugned order is patently illegal as it is without any reason which is the heart and soul of a judicial order because the Adjudicating Authority has passed the order though referring to Section 31 of the Code but it has not recorded its satisfaction about the provisions of Section 30(2) of the Code.
Order Copy:
