# In the matter of Ad Mart Private Limited IA-707-CHE-2021 in IBA-140-2020

> NCLT judgment dated 2022-03-08. Citation: TCN-2022-NCLT-03835. This case involves an application (IA/707/CHE/2021) filed under Rule 49 of the NCLT Rules,…

- **Court:** NCLT
- **Order date:** 8 Mar 2022
- **Citation:** TCN-2022-NCLT-03835
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ad-mart-private-limited-ia-707-che-2021-in-iba-140-2020-9e8f9518

## Summary

### Background

This case involves an application (IA/707/CHE/2021) filed under Rule 49 of the NCLT Rules, 2016, seeking to set aside an ex-parte order dated 18/01/2021 passed by the National Company Law Tribunal (NCLT) in IBA/140/2020, which admitted Ad Mart Private Limited into Corporate Insolvency Resolution Process (CIRP). The applicant, Ramji Venkatraman, the suspended director of Ad Mart Private Limited, argues that the ex-parte order should be set aside because he was not properly notified of the proceedings. The respondent, ACI Wonderwood Products, initiated the CIRP under Section 9 of the IBC, 2016, claiming that Ad Mart Private Limited had defaulted on payments for substandard materials supplied. The NCLT had previously ordered notice to the corporate debtor, but it was

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## Facts

Ad Mart Private Limited is a corporate debtor. ACI Wonderwood Products, an operational creditor, supplied substandard wood to Ad Mart Private Limited. Ad Mart Private Limited issued an undated blank cheque to ACI Wonderwood Products. ACI Wonderwood Products issued a legal notice to Ad Mart Private Limited on 15/04/2016, demanding Rs. 36,55,054/- plus interest. Ad Mart Private Limited replied on 09/05/2016, stating the materials were substandard and unused. ACI Wonderwood Products filed a complaint against Ad Mart Private Limited under Section 138 of the Negotiable Instruments Act, 1881, which is pending. Ad Mart Private Limited shifted its registered office and instructed its Chartered Accountant to update the records, but the update was not completed. ACI Wonderwood

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## Issues and analysis

### Issue 1: Whether sufficient cause exists to set aside the ex-parte order dated 18/01/2021 in IBA/140/2020, …

**Ratio:** The ex-parte order of the Tribunal/ Adjudicating authority can be set aside only on the

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**Reasoning:** The Tribunal reasoned that the Corporate Debtor had been given reasonable time and

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**Interpretation:** This legal issue concerns the interpretation of Rule 49 of the NCLT Rules and

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**Application:** In this case, the Tribunal applied the ratio to the facts by considering that

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## Parties

- **Judges:** R. Sucha…; SAMEER…
- **Appellants:** Ramji Venka…
- **Respondents:** Ad Mart Private…; M/s. ACI Wonderwoo…

## Timeline

- **2016-04-15 — Legal Notic…**: ACI Wonderwood Products issued a legal notice to Ad Mart Private Limited demanding Rs.…
- **2016-05-09 — Reply Notice by…**: Ad Mart Private Limited replied to the legal notice, stating that the materials were…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 138 — Discharge order](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-138)

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