# In the matter of Sheena Adarsh & Mr. Sheeju Purushothaman Vs. Union Bank of India & Anr. CA (AT) (Insolvency) No. 690 & 742-2018

> NCLAT judgment dated 2019-03-29. Citation: TCN-2019-NCLAT-00703. These are appeals preferred by the Appellants-Shareholders against the order dated 1st…

- **Court:** NCLAT
- **Order date:** 29 Mar 2019
- **Citation:** TCN-2019-NCLAT-00703
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sheena-adarsh-mr-sheeju-purushothaman-vs-union-bank-of-india-anr-ca-a7606f4e

## Summary

### Background

These are appeals preferred by the Appellants-Shareholders against the order dated 1st November, 2018 passed by the Adjudicating Authority (National Company Law Tribunal) Chennai Bench, Chennai admitting the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by the Respondent 'Union Bank of India'- (‘Financial Creditor'). The Corporate Debtor is a Public Limited Company with about 24000 shareholders, and around 2000 families are dependent on it. The Adjudicating Authority admitted the application without notice to the ‘Corporate Debtor'.

## Facts

The Union Bank of India, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against a corporate debtor. The National Company Law Tribunal (NCLT) Chennai Bench admitted the application. Shareholders of the corporate debtor, filed appeals against the NCLT's order. The appellants contended that the application was admitted without notice to the corporate debtor. The court noted that notice was issued to the corporate debtor, and their counsel appeared before the Adjudicating Authority on multiple occasions. The corporate debtor is a public limited company with a large number of shareholders and families dependent on it.

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in admitting the application under Section 7 of the …

**Ratio:** The principle of natural justice requires that all parties be given a fair opportunity to

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**Reasoning:** The court noted that notice was issued to the ‘Corporate Debtor', and a Senior Advocate

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**Interpretation:** The court interpreted the principle of natural justice to mean that as long as

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**Application:** The court applied this reasoning to the facts of the case, noting that the

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…
- **Appellants:** Sheena A…
- **Respondents:** Union Bank of…

## Timeline

- **2018-11-01 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal) Chennai Bench, Chennai passed…
- **2019-03-29 — Order by…**: The National Company Law Appellate Tribunal (NCLAT) disposed of the appeals, upholding…

## 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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