The court upheld the NCLT's admission of the Corporate Debtor into CIRP under Section 7 of the IBC, confirming proper service of notice and established default on loan repayment.

J U D G M E N T

(Hybrid Mode)

[Per: Ajai Das Mehrotra, Member (Technical)]

This Appeal has been filed by Mr. Gurushankar Raman, Suspended Director and shareholder of M/s. Amritpur Tea Company Ltd, herein after referred to as the Appellant/Corporate Debtor against the order dated 27.09.2023 passed by the National Company Law Tribunal, Division Bench (Special) Court No. I, Kolkata in C.P.(IB) No. 329(KB)2022 wherein application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as IBC, 2016) by City Union Bank Ltd, the Financial Creditor was allowed admitting the Corporate Debtor in corporate insolvency resolution process (hereinafter called ‘CIRP’).

2. Brief facts of this case, as narrated in the Order of learned NCLT, are that the Corporate Debtor was incorporated on January 10, 1913. The Corporate Debtor had taken loan from the Financial Creditor and the outstanding amount as on September 1, 2022 was Rs.12,60,90,830/-. The Corporate Debtor was declared a non-performing asset (NPA) by the Financial Creditor on December, 31, 2019 as per the record of default mentioned in Form - D of National e- Governance Services Ltd. (hereinafter called ‘NeSL’). The documents relating to agreement of loan, hypothecation etc. in support of the credit given by the Financial Creditor to the Corporate Debtor were filed with the learned NCLT. The learned NCLT admitted the Corporate Debtor in CIRP and appointed Mr.Soumitra Lahiri as the Interim Resolution Professional.

3. In his oral and written submissions, the learned Counsel for the Appellant submitted that no Notice for hearing was served on the Corporate Debtor and Corporate Debtor was in the dark regarding the proceedings. The Corporate Debtor was wrongfully set ex parte by the Adjudicating Authority. It was submitted that the learned NCLT vide Order dated 13^th June, 2023 had directed service of Notice through two newspaper publications, one in vernacular language and one in English widely circulated in the State of West Bengal. It was submitted that the newspaper editions in which the Notice was published were being published from Kolkata, but not in Siliguri. The learned Counsel for the Appellant filed Affidavit in support of his contentions that separate editions of these papers are published from Siliguri which are circulated in Jalpaiguri, where the registered office of the Corporate Debtor is situated. The learned Counsel adverted to Rule 35 of NCLT Rules – 2016. The said Rule is reproduced below for ready reference:-

“35. Advertisement detailing petition.– (1) Where any application, petition or reference is required to be advertised, it shall, unless the Tribunal otherwise orders, or these rules otherwise provide, be advertised in Form NCLT-3A, not less than fourteen days before the date fixed for hearing, at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situate, and at least once in English language in an English newspaper circulating in that district.

(2) Every such advertisement shall state;-

(a) the date on which the application, petition or reference was presented;

(b) the name and address of the applicant, petitioner and his authorised representative, if any;

(c) the nature and substance of application, petition or reference;

(d) the date fixed for hearing;

(e) a statement to the effect that any person whose interest is likely to be affected by the proposed petition or who intends either to oppose or support the petition or reference at the hearing shall send a notice of his intention to the concerned Bench and the petitioner or his authorised representative, if any, indicating the nature of interest and grounds of opposition so as to reach him not later than two days previous to the day fixed for hearing.

(3) Where the advertisement is being given by the company, then the same may also be placed on the website of the company, if any.

(4) An affidavit shall be filed