JAI BALAJI INDUSTRIES LIMITED versus STATE BANK OF INDIA & ORS.

Citation: [2019] 4 S.C.R. 694 · Decided: 08-03-2019 · Supreme Court of India · Bench: N.V. RAMANA · Disposal: Disposed off
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SUPREME COURT REPORTS
[2019] 4 S.C.R.
JAI BALAJI INDUSTRIES LIMITED
v.
STATE BANK OF INDIA & ORS.
(Civil Appeal No.1929 of 2019)
MARCH 08, 2019
 [N. V. RAMANA AND
MOHAN M. SHANTANAGOUDAR, JJ.]
National Company Law Appellate Tribunal Rules, 2016 –
rr. 48 and 52 – Application filed by respondent no.1 against the
appellant u/s.7, IBC – Order by National Company Law Tribunal,
Calcutta (NCLT) rejecting the application – Challenged by
respondent no.1 – National Company Law Appellate Tribunal
(NCLAT) issued notice on the question of limitation as well as on
the merit of the appeal – Judgment reserved – NCLAT set aside the
order of the NCLT, directing it to admit the application filed by the
respondent no.1 u/s.7, IBC  – Plea of appellant that it was neither
served with notice of appeal before the NCLAT nor was given hearing
before it – Held: While the respondent no.1 has submitted that an
advanced copy of the appeal was served on the appellant, the same
cannot be treated as service of notice as stipulated u/r. 48, NCLAT
Rules – r.52, NCLAT Rules categorically states that the judicial
section of the registry of the NCLAT shall record, in the “Notes of
the Registry” column in the order sheet, the details regarding
completion of service of notice on the respondents – Material placed
does not indicate that the aforementioned stipulation was complied
with – Thus, no notice was served upon the appellant before the
NCLAT as stipulated under the rules, and the right of the appellant
to be heard, audi alteram partem, was violated – Impugned order set
aside – Matter remanded back to NCLAT – NCLAT to dispose of the
matter as expeditiously as possible after affording opportunity of
hearing to the parties – Insolvency & Bankruptcy Code, 2016 – s.7.
Disposing of the appeal, the Court
HELD: 1.1 In the rejoinder affidavit before Supreme Court
the appellant has submitted that, pursuant to issuance of notice
vide order dated 02.01.2019, neither did respondent no. 1 file
process fee for issuance of summons in terms of the said order,
   [2019] 4 S.C.R. 694
  694
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nor was the same served upon the appellant. Thus the judgment
which was reserved on 08.01.2019 by the NCLAT, and
consequently pronounced, was done without hearing the appellant
and the observation of the NCLAT that all the parties were heard
is erroneous. In fact, even the impugned order does not note the
appearance of the counsels on behalf of appellant herein. While
the respondent no. 1 has submitted that an advanced copy of the
appeal was served on the appellant, the same cannot be treated
as service of notice as stipulated under Rule 48 of the NCLAT
Rules, 2016. Rule 48 of the NCLAT Rules clearly stipulates
service of notice on the other side, pursuant to issuance of notice
by the NCLAT in the appeal, regardless of supply of advance
copy of appeal paperbook prior to the issuance of notice by
NCLAT. [Paras 6-8] [697-F-H; 698-A, C-D]
1.2  Rule 52 of the NCLAT Rules categorically states that
the judicial section of the registry of the NCLAT shall record, in
the “Notes of the Registry” column in the order sheet, the details
regarding completion of service of notice on the respondents.
However, the material placed does not indicate that the
aforementioned stipulation has been complied with. As per the
rejoinder affidavit filed on behalf of the appellant, the counsel for
the appellant had undertaken a search of the register of process
fee and summons, and the concerned file in the office of the
NCLAT on 28.02.2019. However, no record of respondent no.1
having paid the process fee for issuance and service of notice to
the appellant was found.[Paras 9, 10] [698-D, F-H]
1.3  No notice was served upon the appellant before the
NCLAT as stipulated under the rules, and the right of the appellant
to be heard, audi alteram partem, has been violated. In the facts
and circumstances of the case, the order of NCLAT is set aside
and the matter is remanded back to the NCLAT for fresh
consideration with a direction to dispose of the matter as
expeditiously as possible after affording an opportunity of hearing
to the parties. No opinion is expressed on the merits of the case.
The NCLAT to adjudicate the matter on its own merits
uninfluenced by any of the observations made.  [Paras 11, 12
and 14] [698-H;  699-A-D]
JAI BALAJI INDUSTRIES LIMITED v. STATE BANK OF INDIA
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SUPREME COURT REPORTS
[2019] 4 S.C.R.
Ghaziabad Development Authority v. Machhla
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