NCLAT : In J.B. Tiwari vs. Biostadt India Limited & Anr.

When the Advocate sends the Notice, it is on instructions from the client and the same cannot be ignored by stating that the Advocate should also forward authority and Resolution of the Company. The Appellant in spite of having Notice and knowledge of the proceeding cannot sit on the hedge to take advantage of the technical requirement of Adjudicating Authority sending a Notice through its mechanism.

The Appellant as per Orders of the Adjudicating Authority, informed the Corporate Debtor that the matter will be listed before NCLT, Mumbai Bench on 20.11.2017 and where Respondent No.2 may remain present for hearing, if so desired. The argument of the learned Counsel for Appellant is that Veritas Legal was not the filing authority of the application in NCLT and nor was it authorised by any Board Resolution to act on behalf of the Operational Creditor and thus, such Notice by Veritas Legal could not be said to be proper service of Notice.

The Appellate Tribunal observed that the Corporate Debtor and the Appellant had knowledge of the legal proceedings and also of the Notice. When the Advocate sends the Notice, it is on instructions from the client and the same cannot be ignored by saying that the Advocate should also forward authority and Resolution of the Company. It is apparent that the Corporate Debtor – Appellant had received Notice served by the Advocate.

The grievance of the Appellant is that the Notice should have been sent by the Adjudicating Authority through its Registry as required, if the Judgements referred are perused. No doubt, it would have been appropriate if the Adjudicating Authority had also sent the Notice through its own mechanism. We have considered whether we should send back the matter for want of such procedure being followed by the Adjudicating Authority. However, we have also heard the Appellant in details to consider if the Appellant has any grounds or material because of which, if the same had been shown to the Adjudicating Authority, the result of the proceeding under Section 8 and 9 of the Code could have been different. Looking to the admitted facts in this matter and where we find that there is no dispute regarding the amount due and as we find that the Appellant is unable to demonstrate that before Section 8 Notice was issued any dispute existed, we find no propriety in sending back this matter to the NCLT. The Appellant in spite of having Notice and knowledge of the proceeding cannot sit on the hedge to take advantage of the technical requirement of Adjudicating Authority sending a Notice through its mechanism. The Appellant had sufficient Notice and still chose not to appear before the Adjudicating Authority. We do not find that remitting back the matter will serve any purpose. The application has been rightly admitted by Adjudicating Authority. Thus the Appellate Authority dismissed the appeal accordingly.

Link : https://nclat.nic.in/Useradmin/upload/11915720855c0219ab6a2bb.pdf