S3 Electrical & Electronics Pvt. Ltd. Vs. Brian Lau [Company Appeal (AT) (Insolvency) No. 104 of 2017] - Synopsis
Team SoOLEGAL 23 Apr 2021
FACTS:
In this case, S3 Electrical & Electronics Pvt. Ltd. Vs. Brian Lau [Company Appeal (AT) (Insolvency) No. 104 of 2017], the respondent had filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, requesting to initiate Corporate Insolvency Resolution Process against the appellant company S3 Electrical and Electronics Private Limited. The Adjudicating Authority on 28th June 2017 had accepted the application. Being aggrieved, the appellant had further appealed to the National Company Law Appellate Tribunal. The appellant had stated that Andhra Bank was the corporate debtor's banker and that there was no default in the account. The Andhra Bank is pleased with the 'Corporate Debtor's' results.  The Appellant had filed an appeal to the NCLAT because the Adjudicating Authority before passing an order did not issue notice to the appellant company and it is a violation of the rules of Natural Justice. The appellant had also contended that the respondent who claimed to be a financial creditor does not come under the meaning Financial Creditor as mentioned under sub-section (7) read with sub-section (8) of Section 3 of the I&B Code.

DECISION OF THE COURT:
The Appellate Tribunal had held that, although the learned counsel for the respondent produced some records and communications to demonstrate the evidence of ‘Default,' such documents could not be considered for the purpose of initiating the Insolvency Resolution Process under Section 7 of the Insolvency Bankruptcy Code, 2016, and also the order which was passed by the Adjudicating Authority without sending a notice to the appellant is also a violation of Natural Justice and hence the said order was set aside.
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