The Adjudicating Authority must provide notice and an opportunity to be heard to the Corporate Debtor before admitting a petition under Section 7 or 9 of the IBC, and applications dismissed for default may be restored based on the principles of natural justice.

RA-25/ND/2026:

The prayer made in the captioned application reads thus:-

a) recall the Order dated 23.03.2026 passed in C.P. (IB) No. 618/ND/2025 and restore the said Company Petition to its original number and position, and consequently list the matter for hearing on merits on any date as convenient to this Hon'ble Tribunal;”

Mr. Lakshay Sawhney, Ld. Counsel for the Applicant first submitted that due to technical glitch the Ld. Counsel for the Applicant could not join the proceeding. However, in the same breath he submitted that the order dated 23.03.2026 contained the presence of Adv. Sugandh Goyal for the Applicant. When we express our dismay on contradictory submission that how could it be that on one hand the counsel for the Applicant could not join the proceedings and on the other hand his appearance during the course of court proceedings could be marked in the attendance of order sheet, the Ld. Counsel tendered his apology and requested the court to show compassion in the matter.

It would not be gainsaid that misplaced compassion shown by the Courts repeatedly indiscipline the Members of the Bar and a wrong impression is derived that court proceedings may be taken casually. We record our serious concern regarding the stands like the one taken in the present application, repeatedly.

It is noted that even on 13.02.2026, the applicant was represented only by proxy counsel in this case. We have already expressed our concern more than once.

Nevertheless, the application was dismissed for default on 23.03.2026 and the present application could be preferred within 30 days of the order dated 23.03.2026. Without accepting the contentions/submissions advanced by the Ld. Counsel across the Bar, only by showing of due deference to the Principle of Natural Justice and fair play, we recall of our order dated 23.03.2026 and restore the IB-618/ND/2025 to its original position subject to the payment of cost of Rs. 1,00,000/- (One Lakh) to be deposited in Prime Minister’s National Relief Fund.

The RA stands disposed of.

IB-618/ND/2025:

The present petition has been preferred under Section 9 of the Insolvency & Bankruptcy Code 2016. It is stated by the petitioner that the advance copy in terms of Rule 4 of Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 has already been served upon the Corporate Debtor.

In view of the Judgment passed by the Hon’ble Supreme Court in the case of Swiss Ribbons Pvt. Ltd. & Anr. Vs Union of India & Ors., reported in (2019) 4 SCC 17 before a satisfaction under Section 7(5) of IBC, 2016 is arrived at an opportunity to file reply needs to be given to CD. The Paragraph 58 reads as follows:

“...A conjoint reading of all these Rules makes it clear that at the stage of the Adjudicating Authority‘s satisfaction under Section 7(5) of the Code, the corporate debtor is served with a copy of the application filed with the Adjudicating Authority and has the opportunity to file a reply before the said authority and be heard by the said authority before an order is made admitting the said application.”

Also in the matter of M/s Surendra Trading Company Vs. M/s Juggilala Kamlapat Jute mills Company and Ors. Reported in 2017 SCC online SC143, the Hon’ble Supreme Court viewed thus:

“Further, we are of the view that the judgments cited by the NCLAT and the principle contained therein applied while deciding that period of fourteen days within which the adjudicating authority has to pass the order is not mandatory but directory in nature would equally apply while interpreting proviso to sub-section (5) of Section 7, Section 9 or sub-section (4) of Section 10 as well. After all, the applicant does not gain anything by not removing the objections inasmuch as till the objections are removed, such an application would not be entertained. Therefore, it is in the interest of the applicant to remove the defects as early as possible.”

In Innovative Industries Vs ICICI Bank reported in 2018 1