Libertatem Magazine

National Company Law Appellate Tribunal Dismisses Previous Order, Says Adjudicating Authority Has Power To Set Aside Ex-Parte Order If There Is Sufficient Cause

Contents of this Page

Case: Ms AKJ Fincap Limited Vs. Bank of India


Aggrieved by the order dated 09.12.2020, passed by the learned National Company Law Tribunal, Guwahati, the Appellant filed an application to set aside the ex-parte Order dated 18.03.2020. The Adjudicating Authority dismissed the above Interlocutory Application on the ground that the Tribunal has no power to review or set aside its Company Petition Admission Order as per the settled position of law.   

Facts of the Case

An application was filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 by M/s. Bank of India (the Financial Creditor). An ex-parte order was then passed by the Adjudicating Authority on 18.03.2020 observing that notice was duly served on the ‘Corporate Debtor’, but no appearance was made.

Arguments placed before Court

Learned Counsel appearing on behalf of the Appellant submitted that the Section 7 application came up for hearing for the very first time on 10.02.2020 and notice was issued to the Appellant on 25.02.2020. The notice was however returned due to ‘insufficient address’. A fresh notice was made and the matter was posted for hearing on 18.03.2020. The Adjudicating Authority had directed that on the account of the Covid-19 only matters that are important would be heard. The Appellant was devoid of the knowledge and an ex-parte was issued solely based on the submissions of the Respondent. Aggrieved by the order, the appellant filed an IA but the same was rejected without considering the provisions under Rule 49(2) of the NCLT Rules, 2016.

Learned Counsel appearing for the Respondent contended that the address given on the notice was the same as provided. He further stated that the ‘Corporate Debtor’ was dodging receipt of Notice. He also stated that the Appellant was aware of the fact that Section 7 Application was listed but did choose not to appear therefore the learned Adjudicating Authority has rightly passed the ex-parte Order.

Court’s Judgment

After hearing both sides, the court observed that the Adjudicating Authority had the power to set aside an ex-parte order provided, it was satisfied that there was sufficient cause for service of Notice, as provided in Rule 49(2) of NCLT Rules 2016. As the result, the appeal is allowed and the order of the Adjudicating Authority is set aside.

Click here to view the Judgement. is now on Telegram. Follow us for regular legal updates and judgment from courts. Follow us on Google News, InstagramLinkedInFacebook & Twitter. You can subscribe to our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

About the Author