In the case of Girish Baduni vs Punjab National Bank, an appeal was filed against the order dated 20th September 2019 which was duly passed by National Company Law Tribunal (NCLT), Jaipur. The appeal was filed under section 61 of IBC, 2016. NCLT, Jaipur admitted the application filed by respondent no. 1 and also passed an order to appoint an Interim Resolution Professional to initiate a Corporate Insolvency Resolution Process (CIRP).
Facts of the Case
The appellant availed credit facilities from the respondent in the year 2005. The same was renewed from time to time as per the request of the appellant. The appellant executed a hypothecation agreement dated 9th November 2011 to secure the term loan. The account of the appellant was classified as a non-performing asset on 30th September 2017. A recall notice was also was issued to the appellant and its guarantor demanding a sum of Rs 11,25,09,298.94 but was not paid.
- The application filed under section 7 of IBC, 2016 was never served to the appellant or its directors.
- Letter dated 26th August 2019 which informed about the filing of the application was served to the wrong address due to which made it impossible to appear before the adjudicating authority.
- The email was also not in use, and the respondent knew about that and was also aware of the new email id which was functioning.
- The impugned order passed by NCLT, Jaipur was passed without the notice to the appellant and hence was violative of the Principle of rules of natural justice, stipulated under section 424 of the Companies Act.
- The postal receipts of the registered speed post dated 26.08.2019 and also the tracking report established that was not served on the respective addresses.
- The respondent hid the factum of One Time Settlement (OTS) proposed by the corporate debtor before the adjudicating authority.
- The appellant nowhere denied the allegations of default and failed to provide any documents to prove the default false.
- The appeal was time-barred and deserved to be rejected at the outset.
- Confirmed by the 2nd respondent that the copy of the order by way of a letter was sent to the appellant at the registered address. Also, an email was sent by the 2nd respondent to the registered email address of the appellant.
- The appellant made a vague argument wherein he stated that the employees of the Corporate Debtor used the said email.
- Notices were posted on “Grand Batteries Pvt Ltd” since the director of the corporate debtor was also the director at Grand Batteries Pvt Ltd.
- Notice under Section 13(2) of the SARFEASI Act was served upon the Corporate Debtor and its sister concern, M/s Nihan Batteries Ltd, at the shared address.
- There was ‘default’ and ‘debt’ by the appellant.
- The mails were done on the official website, i.e. [email protected], and were also printed on the letterhead of the corporate debtor. It was the duty of the appellant to look into the emails, and hence this argument was vague.
- The argument of the appellant, wherein he was not aware of the corporate insolvency resolution process was not credible and also had no force.
- A public announcement was made by the respondent no. 2 on 1st November 2019 and since public announcements are for the public at large; the appellant cannot deny the fact as to wherein he was not aware of CIRP.
- An appeal should have been filed within 45 days from the date of the public announcement, but it was not filed.
The court dismissed the appeal and declared that the order of NCLT, Jaipur stands. No costs were ordered.
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