The National Company Law Appellate Tribunal has set aside an NCLT order to initiate insolvency proceedings against real estate development company Ambience Ltd over the plea of Vistra ITCLA three-member NCLAT bench headed by Chairperson Justice S J Mukhopadhaya has remitted the matter back to the National Company Law Tribunal (NCLT), directing it to decide afresh as the order was passed by a single member only.
Vistra ITCL India’s plea to initiate insolvency was heard by a NCLT bench comprising — Member (Judicial) and Member(Technical) — and the order was reserved on April 22, 2019 for judgement.
However, Member (Technical) retired on July 9, 2019 and the order to initiate insolvency proceeding was passed on August 27, 2019 by Member (Judicial) only. This was challenged by Ambience Director Raj Singh Gehlot before the NCLAT, contending that final order cannot be passed by Member (Judicial) alone as it was being heard by a bench of two-members.
“We accordingly, set aside the impugned order dated August 27, 2019 without extending any opinion on merit of the claim and counter claim of the parties.
“The matter is remitted back to the NCLT Bench III, New Delhi should be heard by Divisional Bench of Member Judicial and 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 August 27, 2019,” the National Company Law Appellate Tribunal (NCLAT) said.
It has asked both the parties — Ambience and Vistra ITCL India — to appear before NCLT President on November 6, 2019 and bring this order to his notice.
“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,” the NCLAT said.
During the proceedings, counsel appearing for the real estate development company cited provisions of the Companies Act and NCLT Rules, 2016 in support of its claim, whcih was also accepted by the counsel of financial creditor Vistra ITCL.
“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,” the appellate tribunal said.
Vistra ITCL India, which has invested into Ambience Projects and Infrastructure Ltd of the corporate debtor, acting as a trustee of Indiareit Fund Scheme V, had represented a total amount of Rs 234.69 crore in default as on October 31, 2018.