Hyflux Lifestyle Products (India) Ltd.

‘Heard’, Mr. Y. Suryanarayana, the Learned Counsel, for the ‘Appellant’, for the instant Company Appeal (AT) (CH) (Ins) No. 72 of 2023, at the ‘Admission’ stage, itself.

Earlier, the ‘Adjudicating Authority/ ‘National Company Law Tribunal, Division Bench – II, Chennai, in C.P. (IB)/294/CHE/2021, dated 17/01/2023, had passed the following observations:

The Learned Counsel for the ‘Appellant’ / ‘Petitioner’, submits that due to various factors and scenarios, the Appellant’s/ Petitioner’s business got affected and the financial performance of the Company, was also affected from the beginning and because of the unexpected Covid 19 Pandemic, the ‘Appellant’/ ‘Petitioner’, has suffered huge losses.

According to the ‘Appellant’/ ‘Petitioner’, it is unable to pay the undisputed Debts, of five Operational Creditors and is in default, the details of which are mentioned as follows:

The Learned Counsel for the ‘Appellant’/ ‘Petitioner’ adverts to the fact that on 15/11/2021, the ‘Board of Directors’ of the ‘Appellant’/ ‘Petitioner’, after recognising the ‘Debt’ and ‘Default’, qua, the aforesaid entities came to a ‘Conclusion’ that the Company will not be in a position to repay the aforesaid ‘Debts’, and in this background a ‘Resolution’, was passed by the ‘Board of Directors’ to prefer an ‘Application’, under Section 10 of the ‘Insolvency and Bankruptcy Code, 2016’.

The Learned Counsel for the ‘Appellant’/ ‘Petitioner’, arises a ‘Prime Argument’, that the ‘Adjudicating Authority’/ ‘National Company Law Tribunal, Division Bench – II, Chennai’, in the ‘Impugned Order’, had not specified its ‘Reasons’ in dismissing the ‘Petition’, in an elaborate manner, but only had in brevity, mentioned the ‘Reasons’, which are not sufficient to arrive at a ‘Conclusion’ in dismissing the main C.P. (IB)/294/(CHE)/2021, on its file.

At the outset, this ‘Tribunal’, on going through the ‘Impugned Order’, dated 17/01/2023, in C.P. (IB)/294/(CHE)/2021, is of the considered view that the mere observations made in the ‘Impugned Order’, by the ‘Adjudicating Authority’/ ‘National Company Law Tribunal, Division Bench – II, Chennai’, to the effect “He further states that there are no Assets in the Company and no Business Operations are carried out presently. The averment is taken on Record” etc., are not good enough to dismiss the main C.P. (IB)/294(CHE)/2021, is not a ‘Reasoned Speaking Order on Merits’, of the matter projected by the ‘Appellant’/ ‘Petitioner’, in the considered opinion of this ‘Tribunal’.

At this Juncture, this ‘Tribunal’, pertinently points out that ‘Reasons’ are the ‘Heart and Soul’ of any ‘Order’. A ‘Reasoned Order’, will have an appearance of ‘Justice’. An ‘Unreasoned Order’, may be ‘valid’ from the point of view of a person who has obtained a favourable ‘Order’, but to the ‘Affected’/ ‘Aggrieved’, the said ‘Order’, can only be a non speaking one, and the assigning of ‘Reasons’, for ‘Arriving’, at any ‘Decision’, in respect of an ‘Order’/ ‘Judgement’, is the ‘Paramount Duty’ of the ‘Tribunal’/ ‘Appellate Tribunal’/ ‘Competent Court of Law’, as the case may be.

Be that as it may, considering the fact that the ‘Impugned Order’, dated 17/01/2023, in C.P. (IB)/294/(CHE)/2021, is bereft of Qualitative and Quantitative details and also there is no finding, in regard to the ‘Corporate Debtor’, having committed a ‘Default’, which in fact, was not arrived at, by the ‘Adjudicating Authority’/ ‘National Company Law Tribunal, Division Bench – II, Chennai’, in the Impugned Order, this ‘Tribunal’. Hence, at this stage, this ‘Tribunal’, Simpliciter, is perforced to interfere with the ‘Impugned Order’, dated 17/01/2023 in C.P. (IB)/294/(CHE)/2021, passed by ‘Adjudicating Authority’/ ‘Tribunal’, without traversing upon the ‘merits’ of the matter and not delving deep into the matter and set aside the same and ‘Allows’ the instant ‘Appeal’, in the ‘Interest of Justice’.

In fine, the Instant Company Appeal (AT) (CH) (Ins) No. 72 of 2023, is ‘Allowed’. The ‘Impugned Order’, dated 17/01/2023, in C.P.(IB)/294(CHE)/2021, is set aside, by this ‘Tribunal’, to prevent an ‘Aberration of Justice’, and to promote ‘Substantial Cause of Justice’, the matter is ‘Remitted back’, to the ‘Adjudicating Authority’/ ‘National Company Law Tribunal, Division Bench – II, Chennai’ and the ‘Adjudicating Authority’/ ‘National Company Law Tribunal, Division Bench – II, Chennai’, shall restore the main C.P. (IB)/294(CHE)/2021, to its file, within ‘Two Weeks’, from the date of ‘Pronouncement’ of this ‘Order’ and after restoring the said main C.P.(IB)/294(CHE)/2021, to its file, the ‘Adjudicating Authority’/ ‘National Company Law Tribunal, Division Bench – II, Chennai’, shall proceed further by providing ‘Opportunity’ to the ‘Appellant’s/ Petitioner’s Counsel’, to put forward his ‘Argument’ (both on factual and legal plane), on the aspect of ‘Debt’, and after adhering to the ‘Principles of Natural Justice’, and providing an opportunity of ‘Hearing’, the ‘Adjudicating Authority’/ ‘National Company Law Tribunal, Division Bench – II, Chennai’, shall pass a fresh ‘Order on Merits’, by meeting out the ‘Contentions’ in a ‘Just’, ‘Fair’ and in a ‘Dispassionate’ manner, ofcourse, uninfluenced and untrammelled with any of the observations, made by this ‘Tribunal’, in this ‘Appeal’, in the manner known to ‘Law’, and in accordance with ‘Law’.