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Judgment
O R D E R
02.02.2022: Heard learned counsel for the Appellant as well as counsel appearing for the Respondent. This Appeal has been filed against the order of the Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench dated 23.11.2020 by which application filed by the Appellant under Section 9 has been rejected. A demand notice dated 07.10.2019 was issued under Section 8 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘Code’) to the Corporate Debtor claiming debt of an amount Rs.1,45,49,837/- alongwith interest as due. Notice was not replied by the Corporate Debtor. The Operational Creditor thereafter on 23.11.2020 filed a Section 9 application. The Adjudicating Authority issued notice on the application. The Corporate Debtor appeared before the Adjudicating Authority. The Adjudicating Authority rejected the application by giving following reasons in Para 11:-
Cont’d…./
“11.On perusal of the records it is found that the demand notice which is a pre-requisite under section 8 of the Insolvency & Bankruptcy Code, 2016 for filing the petition under section 9, issued by the applicant on 07.10.2019 (page 57-74) is signed and issued by an unidentified person on behalf of the applicant company without mentioning designation or full name of the person who has signed it. On perusal of the records it is found that vide Board Resolution dated 15.11.2019 one Mr. Sandeep Pramanik, Director – Human Resource has been given authority to initiate CIRP proceedings against the corporate debtor. On perusal of the records it is also found that the authority letter/Board Resolution empowering Mr. Sudeep Pramanik (page 13) to initiate action under section 9 of the I&B Code, is dated 15.11.2019. While comparing with the signature appearing in the demand notice and the petition (form 5) it is found that the signatory in both the documents are different. Even assuming that the said demand notice dated 07.10.2019 was signed and issued by Mr. Sudeep Pramanik, it is evident from the records that at the time of issuing the demand notice dated 07.10.2019, Mr. Sudeep Pramanik, Director of the company had no authority to issue demand notice and the person who has signed the demand notice is somebody else who had no authority to issue such notice.”
Shri Krishnendu Datta, learned counsel for the Appellant submits that the notice under Section 8 was issued by Director of the Company who was fully authorized and in the Section 9 application demand notice was mentioned and relied by the Operational Creditor for proceeding under Section 9. It is submitted by Shri Datta the Adjudicating Authority should have given opportunity to the Operational Creditor to clarify if there was any doubt regarding the details of the person who has given the notice. It would have been clarified that he was the Director of the Company but without giving any opportunity application under Section 9 was rejected on such technical ground. Power of Attorney has also been brought on record by the Appellant which is of the period earlier to the notice.
Learned counsel for the Respondent submits that Power of Attorney which has been filed in the Appeal was not filed before the Adjudicating Authority and could not be relied. He submits that in the notice under Section 8 there were no details of the person who has signed the notice; hence the Adjudicating Authority has rightly rejected the application. He further submits that liberty was granted to the Appellant to initiate fresh proceeding.
We have considered submissions of learned counsel for the parties and perused the record.
The fact that Section 8 notice was issued by the Corporate Debtor find mention in the Section 9 application and adopted for initiating Section 9 proceeding. Observation of the Adjudicating Authority that notice under Section 8 was singed and issued by an unidentified person, cannot be approved. If the Adjudicating Authority had any doubt about details of person signing the notice, an opportunity ought to have been given to the Appellant to explain before the Adjudicating Authority and remove defects, if any, including details of authorization of person issuing notice. There is no dispute that the application under Section 9 was filed by the person who was duly authorized by the Board Resolution dated 15.11.2019. It is not a case that Section 9 application was filed by an unauthorized person. Appellant filed Section 9 application through a person authorized by the Board Resolution dated 15.11.2019. Finding of Adjudicating Authority that there is different signatory in the demand notice and Section 9 application and name of person who signed notice is not clearly mentioned cannot be ground for rejecting application under Section 9. We are of the view that Adjudicating Authority ought not have rejected application on aforesaid ground.
Now the materials have been brought on record to the effect that person who has given the Section 8 notice was Director of the Appellant, we are satisfied that notice was issued by a competent person. In view of the above, we set aside the order of the Adjudicating Authority and revive the application before the Adjudicating Authority which may be considered and decided by the Adjudicating Authority after hearing the parties. We make it clear that we are not expressing any opinion on the merits of the case. The appeal is allowed accordingly.