# In the matter of Krystal Stone Exports Ltd. vs. Stressed Assets Stabilization Fund & Ors.

> NCLAT judgment dated 2023-09-26. Citation: TCN-2023-NCLAT-00167. This case involves an appeal against an order dated June 21, 2023, which dismissed an I.A.…

- **Court:** NCLAT
- **Order date:** 26 Sept 2023
- **Citation:** TCN-2023-NCLAT-00167
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/krystal-stone-exports-ltd-vs-stressed-assets-stabilization-fund-ors-0b155c3a

## Summary

### Background

This case involves an appeal against an order dated June 21, 2023, which dismissed an I.A. filed by the Appellant seeking to recall an order dated September 24, 2019. The initial order arose from a Section 7 application filed by the Respondent, Stressed Assets Stabilization Fund, against the Corporate Debtor, Krystal Stone Exports Ltd. Notices issued to the Corporate Debtor were returned with postal remarks. The Adjudicating Authority ordered service via email and newspaper publication. The Corporate Debtor did not appear, and the Section 7 application was admitted. The Appellant then filed an I.A. to recall the admission order, which was dismissed, leading to the present appeal.

## Facts

Krystal Stone Exports Ltd. is the Corporate Debtor. Stressed Assets Stabilization Fund filed a Section 7 application against Krystal Stone Exports Ltd. The registered office of Krystal Stone Exports Ltd. is in Mumbai, but the Appellant claims it has been in the possession of an official assignee since 2013. The Appellant also claims the Financial Creditor was aware of another office in Jaipur. Notices sent to the registered office were returned with postal remarks. The Adjudicating Authority ordered service via email and newspaper publication. The Corporate Debtor did not appear, and the Section 7 application was admitted on 24.09.2019. The Appellant filed an I.A. No. 522 of 2020 to recall the admission order, which was dismissed. The Appellant sent an OTS proposal

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority committed a procedural error in passing an order without …

**Ratio:** The principle of natural justice requires that a party must be given adequate notice and

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**Reasoning:** The court reasoned that the registered office of the Corporate Debtor was not under its

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**Interpretation:** This issue concerns the interpretation of procedural fairness and the

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**Application:** In this case, the court applied the principle of natural justice to the facts,

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Respondents:** Krystal Stone…; Stressed Assets…
- **Advocates:** Sudhir M…; Shashank De…; +7 more

## Timeline

- **2019-07-02 — Adjudicating Authority…**: Adjudicating Authority passed an Order to serve notice by Email as well as Publication in…
- **2019-09-24 — Section 7 Application…**: Adjudicating Authority admitted…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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