Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2024 Supreme(Online)(NCLAT) 614

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Justice Ashok Bhushan (Chairperson) , Hon'ble Mr. Barun Mitra (Member (Technical)) , Hon'ble Mr. Arun Baroka (Member (Technical)) ,
Shree Padmawati Metaliks Pvt Ltd. Through its Director Arman Ali – Appellant
Versus
STATE BANK OF INDIA – Respondent
476/ND/2024 COMPANY APPEAL(AT)(INS)

Mr. Vivek Sibal, Sr. Advocate with Mr. Rahul Sharma, Mr. Ayush Bhatia, Advocates. for Appellant:
Mr. Ashish Choudhury, Mr. Santosh Kr. Ray, Mr. Akash Tandon, Ms. Mansi Chaudhry, Advocates for R-1.

The Adjudicating Authority has the discretion to allow the filing of a rejoinder after the conclusion of the hearing if it finds that there are sufficient reasons for doing so and that no prejudice will be caused to the other party.

Headnote:
INSOLVENCY - REJOINDER - FILING AFTER CONCLUSION OF HEARING - DISCRETION OF ADJUDICATING AUTHORITY
Fact of the Case:

The Appellant challenged an order of the Adjudicating Authority (National Company Law Tribunal) that permitted the filing of a rejoinder after the conclusion of the hearing of the Financial Creditor.
Finding of the Court:

The Adjudicating Authority had taken into account the facts and circumstances of the case, including the lapse on the part of the earlier lawyer and the change of lawyer by the Financial Creditor, and had found that no prejudice would be caused to the Corporate Debtor by allowing the rejoinder to be filed.
Issues: Whether the Adjudicating Authority erred in allowing the rejoinder to be filed after the conclusion of the hearing.
Ratio Decidendi: The discretion exercised by the Adjudicating Authority in allowing the rejoinder to be filed subject to payment of costs was not unreasonable or arbitrary, and there was no rule precluding such a course of action.
Final Decision: The appeal was dismissed, but the Appellant was given an opportunity to make submissions in regard to the rejoinder.

ORDER

(Hybrid Mode) 15.03.2024: Heard learned counsel for the Appellant. This Appeal has been filed against order dated 18.01.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench by which order the Adjudicating Authority has permitted the rejoinder to be taken on record subject to payment of cost of Rs.10,000/-.

2. Learned counsel for the Appellant challenging the order contends that the said rejoinder was taken on record after conclusion of the hearing of the Financial Creditor. It is submitted that the Adjudicating Authority ought not have been taken on record the rejoinder since no liberty was earlier sought for filing of rejoinder. It is submitted that after completion of hearing rejoinder ought not to have been filed.

Company Appeal (AT) (Insolvency) No.476 of 2024

3. We have considered the submissions of learned counsel for the Appellant and perused the record.

4. The Adjudicating Authority in Para 11 of the order impugned observed following:

“11. No doubt, the rejoinder, if any, normally was required to be filed before the commencement of arguments, however, keeping in view the facts and circumstances as explained in para 3 of this IA that the rejoinder could not have filed because of the lapse on the part of earlier lawyer and the Financial Creditor, therefore, changed its lawyer for further contesting this case. We are also of the view that the Financial Creditor cannot be made to suffer for the lapse of his counsel, therefore, ends of justice would require this rejoinder to be taken on record. We are of the considered opinion; no prejudice is going to be caused to the Corporate Debtor while arguing its plea of bar of limitation of this petition.”

5. When the Adjudicating Authority found fit to take rejoinder on record subject to payment of cost of Rs.10,000/-, we are of the view that discretion exercised by the Adjudicating Authority need not be interfered with by this Tribunal in exercise of its appellate jurisdiction. It is true that normally pleading are completed before commencement of hearing but in facts of the present case, the rejoinder affidavit was taken during course of the hearing.

We are of the view that no rule preclude such a course by the Adjudicating Authority. We, thus, are of the view that appeal need not be entertained. We, however, are of the view that rejoinder having been taken on record, the Appellant shall be given opportunity to make his submission in that regard also. With these observations, we dismiss the appeal. [Justice Ashok Bhushan] Chairperson [Barun Mitra] Member (Technical) [Arun Baroka] Member (Technical) Archana/nn Company Appeal (AT) (Insolvency) No.476 of 2024

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