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2026 Supreme(Online)(NCLAT) 185
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Arun Baroka, Member (Technical)
Vinodkumar Nihalchand Parmar – Appellant
Versus
Anuj Bajpai – Respondent
Company Appeal (AT) (Insolvency) No. 1395 of 2025|CP (IB) No. 141/MB/2024
For the Appellants/Petitioners: Mr. Puneet Singh Bindra, Ms. Charu Modi, Mr. Rishabh Gupta, Ms. Kirti Dang, Ms. Shaanya Shukla, Ms. Sukriti Seth, Mr. Chandra Raj Singh Chouhan
For the Respondents: Mr. Dinkar Singh, Mr. Rohit Singh
Technical curable defects and directory procedural requirements do not defeat Section 7 admission where financial debt and default are prima facie established by acknowledgements, despite natural justice challenges to post-reservation affidavits.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 3(12), 4, 5(8), 7, 61, 65 - IBC (Application to Adjudicating Authority) Rules, 2016 - Rule 4(3) - IBBI (Information Utilities) Regulations, 2017 - Regulation 20(1A) - Indian Evidence Act, 1872 - Section 65B - Bankers Book Evidence Act, 1891 - Principles of natural justice - Section 7 admission - Appeal against admission order challenging post-reservation additional affidavit without opportunity to respond, non-service, uncured procedural defects including information utility record absence, unstamped documents, non-compliance with evidentiary rules - Held, technical curable defects like service on regulator, authorization, inadequate stamping, absent Section 65B certificate do not defeat admission where financial debt and default prima facie established by acknowledgements in balance sheets and email; information utility filing directory not mandatory; post-reservation defect rectification permissible if no prejudice caused; natural justice not violated where counsel on record present and no objection raised; at admission stage, only debt, default, completeness and limitation to be examined. (Paras 23-34)
(B) Debt Assignment - Under SARFAESI Act, assignee steps into shoes of assignor; debtor cannot dispute once acknowledged in own records. (Para 24)
(C) Limitation - Acknowledgement in audited financial statements and email extends period under Section 18 of Limitation Act. (Para 26)
Facts of the case:
Suspended director and shareholder of corporate debtor appealed NCLT order admitting Section 7 petition filed by assignee financial creditor for default on assigned loans originally advanced by bank (term loan and cash credit facilities secured by hypothecation and mortgage), classified as NPA, outstanding ~Rs.37.35 crores, acknowledged in balance sheets up to FY 2020-21 and email expressing distress and seeking settlement; objections raised on procedural lapses, evidentiary defects, natural justice violation due to reliance on additional affidavit filed after order reservation addressing service defect without service or hearing opportunity.
Findings of Court:
Impugned order reasoned, based on record, conforms to statutory provisions and precedents; no jurisdictional error, perversity or misapplication of law; appeal devoid of merit.
Issues: Whether admission order violated natural justice by relying on unserved post-reservation additional affidavit curing service defect; whether procedural/evidentiary defects (information utility absence, Section 65B non-compliance, unstamped documents, etc.) vitiate admission despite prima facie debt and default proof.
Ratio Decidendi: At Section 7 admission, adjudicating authority examines only financial debt existence, default occurrence, application completeness and limitation; curable technical defects do not bar admission where debt/default otherwise evidenced; directory procedural requirements like information utility not fatal; natural justice not breached absent demonstrated prejudice.
Result: Appeal dismissed. Insolvency proceedings to continue.
| Table of Content |
|---|
| 1. financial debt assigned from bank to arc with default established (Para 1 , 15 , 16 , 17 , 18 , 19) |
| 2. additional affidavit served; no natural justice violation (Para 2 , 4 , 11 , 12 , 13 , 14) |
| 3. technical defects curable; iu record not mandatory (Para 5 , 7 , 20) |
| 4. unstamped documents and 65b defects curable at admission (Para 6 , 8 , 9 , 21) |
| 5. section 7 admission requires debt, default, completeness within limitation (Para 23 , 24 , 25 , 26 , 28 , 29 , 30 , 31 , 32 , 33 , 34) |
| 6. appeal dismissed; impugned order upheld (Para 35) |
JUDGMENT
(Hybrid Mode)
[Per: Arun Baroka, Member (Technical)]
The present Appeal has been preferred by the suspended Director and shareholder of Dee Plone Polyster Pvt. Ltd. ("Corporate Debtor") under Section 61 of the Insolvency and Bankruptcy Code, 2016 ("IBC/Code") against the order dated 02.09.2025 ("Impugned Order") passed by the Ld. National Company Law Tribunal, Mumbai Bench ("Ld. NCLT") in CP (IB) No. 141/MB/2024 whereby the Ld. NCLT has admitted the Company Petition filed on behalf of the Respondent No.2 and initiated the Corporate Insolvency Resolution Process ("CIRP") of the Corporate Debtor.
2. Appellant is the Suspended Director and claims that impugned order was passed in violations of principles of natural justice as the NCLT relied upon the affidavit filed on behalf of the Financial Creditor (after reserving of orders) without granting the Corporate Debtor any opportunity to respond to the same and also that the Ld. NCLT further ignored the fact that the said Affidavit was never served on the Corporate Debtor and the objections raised on behalf of the Corporate Debtor were rejected by the Ld. NCLT basis the Affidavit of the Respondent No.2 and the Impugned Order suffers from further procedural irregularities.
Reliefs sought:
3. The Appellant has sought the following reliefs:
a) Set aside the Impugned Order dated 02.09.2025 passed by the Ld. National Company Law Tribunal, Mumbai Bench in CP (IB) No. 141 of 2024; and/or
b) Quash the Insolvency Resolution Process proceedings before the Ld. National Company Law Tribunal, Mumbai Bench in CP (IB) No. 141 of 2024;
c) Pass any other appropriate orders/directions that this Hon'ble Tribunal deems necessary in the facts of the present case.
Submissions of the Appellant
4. Appellant claims that the newly engaged Advocate of the Corporate Debtor appeared through VC and informed about the change of Advocate. Respondent No.2 never supplied the copy of the Additional Affidavit to the newly engaged Advocate or the Corporate Debtor and thus the Corporate Debtor was not given any opportunity to make submissions with respect to the Additional Affidavit. Perusal of paragraph 28 and 29 of the Impugned Order that the Ld. NCLT relied on the contents of the Additional Affidavit to dismiss the objections of (i) non-compliance of Section 65B of the Indian Evidence Act, 1872 and (ii) non-compliance of Rule 4(3) of the I&B (Application to Adjudication Authority) Rules (service of petition to IBBI) raised by the Corporate Debtor. The reliance on the contents of the Additional Affidavit, without granting the Corporate Debtor to respond to the Additional Affidavit and without re-hearing the argument on the matter is gross violation of the principles of natural justice and hence the Impugned Order is liable to be set aside. Thus, NCLT passed the Impugned Admission Order in violation of the principles of natural justice. Appellant places reliance on the following judgement dated 16.07.2021 passed by the Hon'ble Madras High Court titled Selvaraj vs. Koodankulam Nuclear Power Plant India, [CRP(MD) Nos. 915, 943, 967, 991 & 330 of 2020]
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An adjudicatory mechanism for the redressal of the grievances of a citizen is an integral facet of the principle of access to justice which, the Supreme Court in Anita Kushwaha v Pushap Sudan [(2016) 8 SCC 509], has declared as a facet of right to life guaranteed under Article 21 of the Constitution. The Court observed:
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