Shreesha Merla ORDER
1. Heard Mr. Sathish Parasaran, the Learned Senior Counsel appearing for the 'Appellant'/'Bank' and the Learned Counsel appearing for the '1st Respondent'/'Liquidator' at the 'Admission' stage itself.
2. The 'Appellant'/'Bank' has preferred the instant Comp. App. (AT) (CH) (Ins) No. 446/2022, before this 'Tribunal' as an 'Aggrieved Person' being dissatisfied with the 'impugned order' dated 03.03.2022 in IA(IBC)/1341(CHE)/2020 in IBA/243/2019, passed by the 'Adjudicating Authority', (National Company Law Tribunal, Special Bench - II, Chennai), whereby and whereunder, the 'Appellant'/'Bank' was directed to refund a sum of Rs. 11,30,40,034/- to the 'Corporate Debtor's' Account in the 'Corporate Insolvency Resolution Process'.
3. According to the 'Appellant'/'Bank' a sum of Rs. 11,30,40,034/- is not part of the 'Consortium Facility', vide 'Working Capital Consortium Agreement' dated 30.09.2016, but, part of a 'Non-Consortium Facility' of Rs. 10,00,00,000/- granted to the 'Corporate Debtor', on 29.11.2017. Furthermore, it is projected on the side of the 'Appellant'/'Bank', that the 'Appellant', 'right to Live', and 'set off', were also preserved by the 'Consortium Agreement' under 'Article 5'. Added further, the sum was granted to the 'Appellant' on 19.12.2018 before the commencement of the 'Corporate Insolvency Resolution Process' (CIRP).
4. The clear cut stand of the Learned Counsel for the 'Appellant'/'Bank' is that 'Notices' were sent to the 'Appellant'/'Bank', not only to the 'Head Office', in 'Mumbai' and also the 'Registered Office', in 'Nungambakkam in Chennai' and the 'Notices', sent to the 'Bank', were received by the 'Bank'. However, the reason attributed on behalf of the 'Appellant'/'Bank' before this 'Tribunal', is that due to the 'Covid-19 Pandemic', the 'Lockdown' was imposed, which had affected the 'Appellant'/'Bank', substantially, as a result of which, the 'Appellant'/'Bank' was not in a position, to enter in appearance in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 and in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 'Appellant'/'Bank' was proceeded ex parte and the same was 'Allowed' on 03.03.2022, by the 'Adjudicating Authority', ('Tribunal'), and the 'Order' was received by the 'Appellant'/'Bank' only on 28.03.2022.
5. The 'primordial plea' of the Learned Counsel for the 'Appellant'/'Bank' is that the 'Appellant'/'Bank' has a good case/cause, on merits of the matter and before the 'Adjudicating Authority', ('Tribunal'), IA(IBC)/419(CHE)/2022 in IBA/243/2019 was filed to 'set aside' the 'impugned order dated 03.03.2022, passed by the 'Adjudicating Authority', (National Company Law Tribunal, Chennai Bench).
6. In this connection, the 'Grievance' of the 'Appellant'/'Bank'/'Petitioner' is that the 'Application' came to be 'dismissed' by the 'Tribunal' on 18.10.2022 without taking into consideration 'Rule 49 of the NCLT Rules, 2016, which provides for 'sufficient cause' in regard to the 'non-appearance of the parties'.
7. Aggrieved by the 'Order' of the 'Adjudicating Authority', (National Company Law Tribunal, Chennai Bench) dated 03.03.2022 in IA(IBC)/1341(CHE)/2020 in IBA/243/2019, wherein the 'Appellant'/'Bank' was set ex parte, the 'Appellant' has filed the instant Comp. App. (AT) (CH) (Ins) No. 446/2022.
8. Per contra, it is the 'submission' of the Learned Counsel for the 'Respondent'/'Liquidator', of M/s. Thiru Arooran Sugars Limited that the 'Petitioner'/'Appellant' projected IA(IBC)/419(CHE)/2022 in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 seeking to set aside the order dated 03.03.2022 in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 on the file of this 'Tribunal'.
9. The Learned Counsel for the 'Respondent' brings it to the 'Notice' of this 'Tribunal', that the 'Appellant', wherein IBA/243/2019 filed by the State Bank of India under Section 7 of the Insolvency & Bankruptcy Code, 2016 against the 'Corporate Debtor' was 'admitted' by virtue of the 'Order' dated 07.06.2019, passed by the 'Adjudicating Authority', Tribunal.
10. It comes to be known that the 1st Respondent was appointed as the 'Resolution Professional' by the 'Committee of Creditors' as per its meeting that took place on 06.07.2019.
11. According to the 'Petitioner'/'Appellant'/'Bank', due to 'Covid-19 Pandemic', 'Lockdown' was imposed in India, in numerous parts of India' and the 'Banking Operation' substantially got affected,. In this regard, the 'Petitioner'/'Appellant'/'Bank' points out that its 'Head Office', is at 'Bombay' and the 'Notice' in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 was also sent to 'its Address' and even the 'Bombay' Head Office of the 'Appellant'/'Bank', but, squarely due to 'lockdown' during the Covid-19 Pandemic and the 'Bank' was working with 'skeletal staff', to cater to the 'essential requirements of the customers', many of them were working from 'Home(s)' and the 'Notice' in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 sent to the 'Petitioner'/'Appellant'/'Bank' was not followed up to enter appearance in the 'Application'. Hence, the 'Appellant'/'Bank' was 'Ex parte' and the IA(IBC)/1341(CHE)/2020 in IBA/243/2019, proceeded as 'Ex parte' before the 'Adjudicating Authority' (Tribunal).
12. It comes to be known that the 'Appellant'/'Bank' had received a 'Notice' from the 1st Respondent dated 25.03.2022 and the 'Notice' was received by the 'Appellant'/'Bank' on 28.03.2022, whereby and whereunder, the 'Appellant' was demanded Rs. 11,30,40,034 and also, the 'Notice' was enclosed with a copy of the 'Order 'dated 03.03.2022.
13. The categorical 'Plea' of the 'Appellant'/'Bank' is that it had the 'Notice' of the said 'Order' dated 03.03.2022 received only on 28.03.2022. Later, the Bank had filed an 'Application', to set aside the Order dated 03.03.2022 in IA(IBC)/1341(CHE)/2020 in IBA/243/2019, which was decided 'Ex parte'.
14. The 'forceful contention' advanced on behalf of the 'Appellant' is that the 'Appellant'/'Bank', had failed to appear in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 was only due to the reason of Covid-19 Pandemic and consequent to failure to follow up the 'Notices' received by its 'Head Office' and 'Local Branch Office', therefore, failure to appear in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 was neither wilful nor wanton, but, due to the 'aforesaid reasons'. Hence, the 'Appellant'/'Bank' has sought in the IA(IBC)/419(CHE)/2022 in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 to set aside the 'Order' dated 03.03.2022 in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 on the file of the 'Adjudicating Authority', 'Tribunal'.
15. At this stage, this 'Tribunal', on going through the 'Counter' of the 1st Respondent is of the view that the 1st Respondent in its 'Counter', has clearly mentioned that the IA(IBC)/1341(CHE)/2020 in IBA/243/2019 was listed before the 'Adjudicating Authority', 'Tribunal', on numerous dates viz., 1) 05.08.2021; 2) 16.09.2021; 3) 30.09.2021; 4) 08.11.2021; 5) 06.12.2021, 6) 21.12.2021 and 7) 01.02.2022 and finally order was passed on 03.03.2022.
16. According to the 1st Respondent, the 'Appellant'/'Applicant' had reasonable time to represent before the 'Adjudicating Authority', 'Tribunal', and it had failed to exercise its right, of course, after having adequate opportunities.
17. It is specifically averred in the 'Counter' of the 1st Respondent that the 'Notice' for appearance was sent to the 'Corporate Debtor's Head Office', 'Branch Office' and other 'Alternative Office' of the 'Appellant'/'Petitioner'/'Bank' on 16.07.2021 and the same was duly sent on 17.07.2021 and 22.07.2021 respectively. Apart from that, the 'Adjudicating Authority', 'Tribunal', after providing reasonable time, to the 'Appellant'/'Petitioner'/'Bank' to enter appearance in the IA(IBC)/1341(CHE)/2020 in IBA/243/2019, has passed the 'Order' on 03.03.2022, and in short, the 'Application' filed by the 'Appellant'/'Petitioner'/'Bank', as per Rule 49 of the NCLT Rules, 2016 is 'unsustainable in Law' and hence, liable to be 'dismissed'.
18. Besides the above, it is transpired from the 'Counter' of the 1st Respondent that the 'Liquidation' of the 'Corporate Debtor' was completed by virtue of the 'Order' passed by the 'Adjudicating Authority', ('Tribunal') on 02.05.2022, approving the 'Scheme of Compromise'/'Arrangement' submitted by M/s. KALS Distilleries Private Limited and the 'Plea' of the '1st Respondent', is that the 'Appellant' is bereft of 'sufficient cause' and the same is liable to be 'dismissed' in furtherance of 'substantial cause' of 'Justice'.
19. When 'Notice' is sent to the 'proper' and 'correct address' of the 'Respondent', where he/it actually and voluntarily resides or carries on business or personally works for gain, there arises a 'presumption' of 'due service'.
20. At this stage, this 'Tribunal', on going through the 'order' dated 03.03.2022 in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 is of the earnest opinion that the 'Appellant'/'Bank' had candidly admitted in its IA(IBC)/419(CHE)/2022 in IA(IBC)/1341(CHE)/2020 in IBA/243/2019 that the 'Appellant'/'Bank' was served 'Notices' not only to its 'Corporate Branch Office' and also, other 'Alternative Offices' on 16.07.2021 and the same was duly served on 17.07.2021 and 22.07.2021 respectively.
21. As such by no such imagination, it can be said that the 'Petitioner'/'Appellant'/'Bank' was not provided with an 'enough opportunity' or 'adequate opportunity' to take its own decision in the subject matter in issue.
22. To be noted, that Rule 49(2) of the NCLT Rules, 2016 under the 'caption', 'Ex parte' 'Hearing and Disposal' points out that if a 'Notice' was not duly served or the 'concerned person' was prevented by any 'sufficient cause' for appearing at the time when the 'Petition'/'Application' was called for 'Hearing', the 'Tribunal' ('Adjudicating Authority') can pass an 'Order', by setting aside the 'Ex parte 'Hearing', as against 'it'/'him' or 'them', (after being satisfied with the reason (s) assigned, of course) on such terms, as it thinks fit.
23. In the instant case, although the 'Appellant'/'Bank', has come out with a 'specific plea' that only due to 'Covid-19 Pandemic', the 'Appellant'/'Bank'/'Petitioner' had 'skeletal staff' operation, both at the 'Corporate Office, Branch Office, etc. and that were the only reasons for the 'Petitioner'/'Appellant'/'Bank' was not quite enough to enter its appearance in the 'subject matter' of the case before the 'Adjudicating Authority' ('Tribunal').
24. In spite of the reasons ascribed on behalf of the 'Appellant'/'Bank' that it was prevented because of 'Covid-19 Pandemic' and also added further the Staff members were in operation only in a 'skeletal manner' both at the 'Corporate and Branch Office', yet, this 'Tribunal', is of the considered view that the said reason of 'Pandemic' cannot hold water to and in favour of the 'Petitioner'/'Appellant'/'Bank' and, especially, in the 'teeth of the Notices' sent to the Bank's Corporate Office, Branch Office and Alternative Office were duly served on 17.07.2021 and 22.07.2021, etc. when once the 'Notice' to a 'Person'/'Entity'/'Organisation' was duly served in terms of the NCLT Rules, 2016, then, the 'Adjudicating Authority' ('Tribunal') is left with no action but to 'Record' that the 'Notices' sent were held sufficient.
25. Although the 'Plea' of 'Covid-19 Pandemic', appears to be a persuasive one, at the first blush, on acceptable one, on going through the 'spirit' and 'tenor' of the 'Counter' filed by the Respondent, this 'Tribunal' without any haziness, comes to an 'inevitable' and 'inescapable conclusion' that there is 'no Sufficient Cause'/'Good Cause' for 'Allowing' the IA(IBC)/419(CHE)/2022 in IA(IBC)/1341(CHE)/2020 in IBA/243/2019. In short, this 'Tribunal' is in 'Complete Agreement' with the 'Conclusion', arrived at by the 'Adjudicating Authority' ('Tribunal') in the impugned order in IA(IBC)/419(CHE)/2022 in IA(IBC)/1341(CHE)/2020 in IBA/243/2019, which is free from any 'Legal Flaws'.
26. Viewed in that perspective, the instant Comp App (AT) (CH) (Ins) No. 446/2022 sans merits.
In fine, the instant Comp App (AT) (CH) (Ins) No. 446/2022 is 'dismissed'. No Costs. The connected Pending IA/1132/2022 (For 'Stay') is Closed.
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