National Company Law Appellate Tribunal
Canara Bank vs Megha Engineering And Infrastructure ... on 7 November, 2022
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
AT CHENNAI
(APPELLATE JURISDICTION)
Company Appeal (AT)(CH)(Ins) No.391/2022
(Under Section 61 of the Insolvency and Bankruptcy Code, 2016)
(Arising out of the Impugned Order dated 22.03.2022 in IA(IBC)
No.260/2022 in CP (IB) No.462/7/HDB/2018
passed by the 'Adjudicating Authority' (National Company Law
Tribunal, Hyderabad Bench - II, Hyderabad)
In the matter of:
Canara Bank
(Formerly Syndicate Bank),
Flat No.104, 1st Floor,
H.No.6-3-639/640/642,
Golden Edifice Complex, Khairatabad,
Hyderabad - 500 004.
Present Address:
Canara Bank,
ARM Branch,
Circle Office Building,
Near Rail Nilayam,
Secunderabad - 500 026. ... Appellant
V
1. Megha Engineering and Infrastructure Ltd.
Represented by its Directors,
Having its registered office at:
S-2, Technocrat Indl. Estate, Balanagar,
Hyderabad - 500 037, Telengana, India.
2. ICOMM Tele Limited,
Through its Resolution Professional,
Mr. Bhrugesh Amin;
Having its registered office at:
Plot No.40-46, Phase - IDA, Chertapally,
HCL Post, Hyderabad - 500 051.
3. Bharat Sanchar Nigam Limited
2nd Floor, Bharat Sanchar Bhawan,
Company Appeal (AT)(CH)(Ins) No.391/2022 Page 1 of 9
Janpath, New Delhi - 110 001. ... Respondents
Present :
For Appellant : Mr. M.L. Ganesh, Advocate
For the 1st Respondent : Mr. Nithin Chowdary Pavuluri, Advocate
ORDER
(Virtual Mode) 07.11.2022: Heard Mr. M.L. Ganesh, the Learned Counsel appearing for the 'Appellant' in the instant Comp. App. (AT)(CH)(Ins) No.391/2022, arising out of an 'Order dated 22.03.2022 in IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018, passed by the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad).
2. At this juncture, for the Respondent No.1, Mr. Nithin Chowdary Pavuluri, the Learned Counsel appears and prays for time to file 'Vakalat' and 'Reply' / 'Response' / 'Counter'.
3. However, this 'Tribunal', considering the 'limited scope' of the instant Comp. App. (AT)(CH)(Ins) No.391/2022, is inclined to dispose of the Comp. App. (AT)(CH)(Ins) No.391/2022, at the stage of 'Admission' itself and not ordering 'Notice' to the Respondent Nos.2 and3. The Learned Counsel for the 1st Respondent is permitted to file 'Vakalat' on behalf of the Respondent Company Appeal (AT)(CH)(Ins) No.391/2022 Page 2 of 9 No.1 in the instant Comp. App. (AT)(CH)(Ins) No.391/2022 for his appearance and 'Heard'.
4. The 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad) on 22.03.2022 in IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018 had passed the following observations: -
"Learned Counsel on behalf of the Canara Bank appeared via video conference.
This IA has been filed to recall the order dated 21.02.2022 in IA No.701/2019, the same cannot be entertained for the reason that even on the previous occasions the applicant had not evinced any interest in prosecuting the said application".
and ultimately 'dismissed' the said 'Interlocutory Application'.
5. Assailing the 'dismissal order' dated 22.03.2022, in IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018, passed by the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad), the Learned Counsel for the 'Appellant' / 'Bank' / 'Petitioner' submits that the 'Tribunal' on 16.05.2019, 10.06.2019 and 25.06.2019 had passed an order of 'Stay of Invocation of the Guarantees', including the 'Guarantee' issued by the 'Financial Creditor', till further 'Orders'. Company Appeal (AT)(CH)(Ins) No.391/2022 Page 3 of 9
6. The Learned Counsel for the 'Appellant' / 'Bank' / 'Petitioner' submits that the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad) had erroneously dismissed the IA (IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018 dated 22.03.2022, on the ground that an earlier Application in IA/701/2019 in CP (IB) No.462/7/HDB/2018, being filed for suitable direction, was 'dismissed' on the ground of 'non-prosecution'.
7. The Learned Counsel for the 'Appellant' / 'Bank' / 'Petitioner' proceeds to point out that in the 'Impugned Order' that the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad) had not appreciated the important fact that IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018 was preferred by the 'Appellant' / 'Financial Creditor' / 'Bank' and it being the 'custodian' of 'Public Money'.
8. The Learned Counsel for the 'Appellant' / 'Bank' / 'Petitioner' strenuously comes out with a 'Plea' that, inspite of the fact that the 'Order' dated 21.02.2022 in IA/701/2019 in CP (IB) No.462/7/HDB/2018, mentioned that 'One Officer of the Financial Creditors' logged in and sought time, the same was denied and the 'Application' was dismissed for 'Non-Prosecution'. Company Appeal (AT)(CH)(Ins) No.391/2022 Page 4 of 9
9. On going through the contents of the 'Order' dated 21.02.2022 in IA/701/2019 in CP (IB) No.462/7/HDB/2018, passed by the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad), this 'Tribunal' is of the 'considered view' that an 'opportunity' ought to have been provided by the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad) to the Learned Counsel for the 'Appellant' / 'Bank' / 'Petitioner', because of the fact, that the that 'One Officer of the 'Bank', who represented on behalf of the 'Financial Creditor', logged in, had sought time, and, therefore, this 'Tribunal' opines that the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad), obviously, had adopted a pedantic and an hyper-technical approach, because of the fact, that 'no progress' was made in the 'subject matter' and added further, that the 'Tribunal' went on to observe that even on this date, viz., 21.02.2022 given by it was exclusively to proceed with the matter. Apart from this, the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad) had stated that on the 'last occasion' also, there was no representation from the side of the 'Appellant' / 'Bank' / 'Petitioner' and denied the further time prayed for and dismissed the IA/701/2019 in CP (IB) No.462/7/HDB/2018 for 'Non- prosecution'.
Company Appeal (AT)(CH)(Ins) No.391/2022 Page 5 of 9
10. Admittedly, the 'Appellant' / 'Bank' / 'Petitioner' has preferred the instant Comp. App. (AT)(CH)(Ins) No.391/2022 assailing the correctness of disposal of IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018, wherein it was observed that the said 'Interlocutory Application' could not be entertained for the reason that on 'Previous Occasions' the 'Applicant' had not evinced any interest in prosecuting the said 'Application'. This observation of the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad), in IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018, in the considered opinion of this 'Tribunal' is 'not a valid, tenable and a justiciable one'.
11. It must be borne in mind that, if the 'Restoration Application' preferred by the 'Party' / 'Person' is 'dismissed', at the threshold, then, there is a possibility, that even the 'meritorious case / matter' may be thrown out, at the nascent stage. However, if the 'Restoration Application' is 'Allowed' by the 'Adjudicating Authority' / 'Tribunal' by resorting a 'liberal approach', then, there is every likelihood that the 'Main Matter' shall be taken up for 'Hearing' and the 'Case' / 'Cause' is decided 'on Merits', of course, after providing an adequate 'Opportunity' of 'Hearing' and also by observing the 'Principles of Natural Justice' (like providing time to file 'Reply' / 'Response', 'Rejoinder', etc.) Company Appeal (AT)(CH)(Ins) No.391/2022 Page 6 of 9
12. In the 'Restoration Application' matter, it is for the 'Tribunal' / 'Court' of 'Law' to adopt a 'practical', 'pragmatic', 'purposeful', 'meaningful', 'rational' and 'a result-oriented approach'
13. Viewed in the above perspective, this 'Tribunal' comes to a 'Resultant Conclusion' that the 'Impugned Order' of disposal of IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018 passed by the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad) is clearly unsustainable in the 'eye of Law', because of the fact that the Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench
- II, Hyderabad) had adopted a 'hyper-technical' and 'pedantic approach' instead of taking a 'purposeful', 'meaningful' and 'liberal approach'. Accordingly, the 'Impugned Order' dated IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018 dated 22.03.2022 is set aside for the reasons assigned in this 'Appeal', to prevent an 'aberration of justice' and to 'promote' 'substantial cause of Justice'.
14. In fine, the instant Comp. App. (AT) (Ins) No.391/2022 is Allowed. No Costs. The 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad) is directed to restore IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018 to its 'File' within 'One Week', from the date of receipt of a copy of 'this Order'. After restoring the IA(IBC) No.260/2022 Company Appeal (AT)(CH)(Ins) No.391/2022 Page 7 of 9 in CP (IB) No.462/7/HDB/2018, on the file of the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad) is required to provide an opportunity to the other side to file their 'Replies' / 'Responses' / 'Counters' within 'Ten Days', thereafter, and for filing 'Rejoinder', if any, another 'Three Days' time is to be granted to the 'Appellant' / 'Bank' / 'Petitioner'. Thereafter, by adhering to the 'Principles of Natural Justice' i.e., providing an opportunity of 'Hearing' to the respective parties, the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad) is required to 'dispose of' the IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018, within 'Four Weeks', thereafter, in a fair, just, objective and in dispassionate manner. The 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad), at the time of passing 'Fresh Orders' in IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018, is to bear in mind, the aspect of 'One Officer of the 'Bank' / 'Financial Creditor' logged in and had prayed for 'Time' and to pass a 'reasoned speaking order' on 'Merits', in qualitative and quantitative terms, of course, uninfluenced and untrammelled with any of the observations made by this 'Tribunal' in this 'Appeal'.
Before parting with the case, it is lucidly made quite clear that the respective parties are at 'Liberty' to raise all 'Factual and Legal pleas' before Company Appeal (AT)(CH)(Ins) No.391/2022 Page 8 of 9 the 'Adjudicating Authority' (National Company Law Tribunal, Hyderabad Bench - II, Hyderabad), who shall take into account of the same, and to pass 'Orders', in IA(IBC) No.260/2022 in CP (IB) No.462/7/HDB/2018 in the manner known to 'Law' and in accordance with 'Law'.
[Justice M. Venugopal] Member (Judicial) [Shreesha Merla] Member (Technical) ghk/tm Company Appeal (AT)(CH)(Ins) No.391/2022 Page 9 of 9