Single member cannot pass order on matter heard by two Members: NCLAT

Raj Singh Gehlot, Director of Ambience Pvt. Ltd. Vs Vistra ITCL (India) Ltd. & Anr. (National Company Law Appellate Tribunal Delhi)

The ‘Vistra ITCL(India) Ltd.’ filed an application Under Section 7 of the Insolvency & Bankruptcy Code, 2016 (‘I&B’ Code, for short) for initiation of ‘Corporate Insolvency Resolution Process’ against ‘Ambience Pvt. Ltd.’ (‘Corporate Debtor’), the Divisional Bench of one Hon’ble Member (Judicial) and another Hon’ble Member (Technical) of ‘National Company Law Tribunal’ Bench No. III, New Delhi heard the application on 26^th November, 2018 and passed different orders as detailed below as shown in chart below:-

LIST OF DATES OF ORDERS

Vistra ITCL (India) Limited & Anr Versus Ambience Pvt. Ltd. (NCLT)NCLT Case No. IB-1600(ND)2018

The Appeal was admitted by Hon’ble Member (Judicial) on 27^th August, 2019 as in the meantime one of the Hon’ble Member(Technical) Ms. Deepa Krishan retired on 19t^h July, 2019.

The order of ‘admission’ is challenged on the ground that the matter having been heard by two Hon’ble Members and the final order could not have been passed by Hon’ble Member(Judicial).

Dr. Abhishek Manu Singhvi, Learned Senior Counsel appears on behalf of the Appellant referred to Section 419(3) of the Companies Act and Rule 152(4) of ‘NCTL’ Rules, 2016 in support of its claim.

Mr. Arun Kathpalia, Learned Senior Counsel has appeared on behalf of ‘Vistra ITCL(India) Ltd.’ (‘Financial Creditor’) accepts the aforesaid fact.

In the facts and circumstances, as suggested by Learned Counsel for the parties and we are also of the opinion that the matter may be remitted back for fresh hearing on merit relating to admission of application Under Section 7 of the ‘I&B’ Code after giving liberty to the parties.

Mr. Sandip, ‘Resolution Professional’ has appeared with Mr. Mritunjay Kumar, Learned Counsel and submitted that he has incurred certain expenses and entitled for fee of last one month 20 days. However, we are not deciding his claim at this stage as we intend to remit the matter to the Adjudicating Authority.

We accordingly, set aside the impugned order dated 27^th August, 2019 without extending any opinion on merit of the claim and counter claim of the parties. The matter is remitted back to the ‘National Company Law Tribunal’ Bench III, New Delhi should be heard by Divisional Bench of Hon’ble Member(Judicial) and Hon’ble (Technical) as per the provisions of the Act and after notice and hearing, the Adjudicating Authority pass appropriate order in accordance with Law uninfluenced by an impugned order dated 27^th August, 2019. It is expected that the application will be taken up and disposed of on early date preferably within three weeks from the date of appearance of the parties. Both the parties will appear before the Hon’ble President of ‘NCLT’ on 6^th November, 2019 and bring this order to the notice of Hon’ble President.

In so far as the fee and cost of the ‘Resolution Professional’ is concerned, the Adjudicating Authority will decide the same in accordance with law after the Application Under Section 7 is admitted in case, it will be decided by the ‘Committee of Creditors’ as per the provision of the Code.

The Appeal stands disposed of and remitted with the aforesaid observations and directions. The Appeal stands disposed of without costs.