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Judgment
O R D E R
12.03.2024: Heard learned counsel for the parties. This Appeal has been filed against order dated 09.02.2024 by which the Adjudicating Authority has recalled its earlier order passed on 25.01.2024 by which Section 7 application filed by the Appellant was admitted. In the present case, the Adjudicating Authority granted time to the Corporate Debtor for filing reply and time was extended. On 01.12.2023, the Adjudicating Authority noticing the prayer of the Corporate Debtor for further time, granted one week time subject to payment of cost of Rs.25,000/-.
Learned counsel for the Appellant challenging the order contends that there was no procedural defect and the Adjudicating Authority ought not to have recalled order dated 25.01.2024. Learned counsel for the Appellant has relied on Rule 49 and Rule 110 of the NCLT Rules, 2016.
Learned counsel for the Respondent submits that on 08.01.2024 counsel for the Respondent was held up in some other Court, therefore, he could not appear before the Adjudicating Authority. It is submitted that in pursuance of order of the Adjudicating Authority reply has already been filed by the Corporate Debtor, which was taken on record and 05.04.2024 is the next date fixed for hearing of the matter. It is submitted that the cost has also been deposited by the Corporate Debtor in the PM Relief Fund.
We have considered the submissions of learned counsel for the parties and perused the record.
Order dated 08.01.2024 is as follows:
“ORDER
1.Ld. Counsel for the Financial Creditor Present. None for the Corporate Debtor.
2.In terms of order dated 01.12.2023, the Respondent has neither filed Reply Affidavit nor paid the cost and therefore, the right to file Reply Affidavit shall stand closed. The Corporate Debtor is set ex parte in view of the order passed on 01.12.2023.
3.Heard the Ld. Counsel for the Financial Creditor at length. Reserved for Orders.
4.Written Notes of Arguments be filed within three days.”
The Adjudicating Authority noticed in the order that the Respondent has neither filed Reply Affidavit nor paid the cost, hence, their right to reply is closed. The Adjudicating Authority proceeded ex-parte and reserved order on 08.01.2024, which was pronounced on 25.01.2024. The Adjudicating Authority in the impugned order has not noticed that cost was paid by the Corporate Debtor on 05.01.2024. It is true that the Corporate Debtor did not appear on the date matter was taken on 08.01.2024 and it was only the Financial Creditor who was present. The Adjudicating Authority noticing the aforesaid fact that cost was already paid has recalled the order.
In this appeal, the Financial Creditor has prayed for setting aside the order by which, order has been recalled and Adjudicating Authority has decided to proceed further giving opportunity to the Corporate Debtor to file Reply finding sufficient cause for recall of order dated 25.01.2024.
Learned counsel for the Appellant is right in his submission that under Rule 49, it was open for the Adjudicating Authority to proceed and pass an order when the Corporate Debtor did not appear on 08.01.2024; to this extend there can be no procedural infirmity in the order. However, present is a case where on 08.01.2023, when application was reserved for orders it was noticed by the Adjudicating Authority that the Corporate Debtor could not appear neither file reply nor paid cost in terms of order dated 01.12.2023. The Adjudicating Authority decided to recall order dated 08.01.2023 to give opportunity to the Corporate Debtor to file reply and decide the matter, therefore, we see no occasion to exercise our Appellate Jurisdiction to interfere in the order passed by the Adjudicating Authority giving opportunity to the Respondent to file a reply as costs to file reply was already paid by the Corporate Debtor. Now, the matter has been fixed for hearing on 05.04.2024, as submitted by learned counsel for the Corporate Debtor.
We, thus are of the view that order impugned is not to be interfered and the Adjudicating Authority may proceed to decide the matter in accordance with law. We make it clear that we have not expressed any opinion on the merits of the application and it is for the Adjudicating Authority to consider and decide the matter in accordance with law. Appeal is disposed of accordingly.