NCLT order set aside as passed in violation of principles of natural justice: Kerala HC

Jaju Babu Vs National Company Law Tribunal (Kerala High Court)

Kerala High Court allowed the writ petition inspite of availability of an alternate remedy since there is a violation of principles of natural justice. Thus, writ allowed and final order of NCLT set aside.

Facts- The petitioner is an allottee/homebuyer in Kerala Trade Centre at Marine Drive, Cochin. The prayer in this writ petition is to quash final order passed by the 1^st respondent, and to issue consequential directions. By final order, the 1^st respondent has directed the 3^rd respondent, the Resolution Professional, to reject the claim filed by the home buyers, including] the petitioner and thus allowed the interlocutory application filed by the 2^nd respondent.

Conclusion- This Court in Tharakan Web Innovations Pvt. Ltd. (M/s.) & Anr. v. National Company Law Tribunal, Kakkanad & Ors. held that the availability of an alternate remedy will not be a reason for not exercising jurisdiction when there is a violation of principles of natural justice or where the proceedings challenged are without jurisdiction.

Held that the 1st respondent has accepted and recorded the affidavit which was filed after the hearing, and the order itself has been issued relying on the contents of the said affidavit. Since the petition was a contested one and had been argued and taken for orders, the 1st respondent ought to have heard the petitioner and similarly situated persons on the contents of the affidavit. This is all the more so since the prayer in the application was virtually to review the earlier decision of the CoC to include the petitioner and other holders of registered sale deeds as financial creditors on the admission of the senior creditor. Since it is an order passed in violation of the principles of natural justice, it is only appropriate that the same is set aside and the matter is remanded back to the 1st respondent for passing orders after hearing the petitioner and other similarly situated persons on the contents of the affidavit and on the proposal to record the same and pass orders.