NCLAT sets aside insolvency proceeding against Ambience Projects & Infrastructure

NCLAT sets aside insolvency proceeding against Ambience Projects & Infrastructure
29/10/2019 , by , in News/Views

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 ITCL India (formerly known as IL&FS Trust Company).

A 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.

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