The court clarified that financial creditors can file additional documents under Section 7 IBC, and restrictions on reliance on such documents by the NCLT were erroneous.

O R D E R

1. This Statutory Appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 (for short, ‘IBC’) is at the instance of the appellant – State Bank of India seeking to challenge the order passed by the National Company Law Appellate Tribunal (NCLAT), Chennai dated 04.10.2023 by which the Appellate Tribunal dismissed the appeal filed by the State Bank of India and thereby affirmed the order passed by the National Company Law Tribunal (NCLT), Hyderabad.

2. The facts giving rise to this appeal may be summarized as under:-

i) In February, 2020, the Bank filed an application under Section 7 of the IBC before the NCLT.

ii) In November, 2021, the respondent – herein India Power Corporation Limited (IPCL) filed its counter affidavit before the NCLT.

iii) On 13.06.2022, the State Bank of India filed its rejoinder affidavit. However, in filing the rejoinder affidavit, there was a delay as according to the Bank, there was one money suit filed by the respondent – herein.

iv) In such circumstances, the Bank had to file IA No.1547/2022 praying that the delay in filing the rejoinder affidavit may be condoned.

v) The NCLT, Hyderabad vide order dated 30.01.2023 condoned the delay with a direction that any factual assertions pleaded in the rejoinder shall not be taken into consideration while deciding the Section 7 application.

vi) The order passed by the NCLT came to be challenged before the National Company Law Appellate Tribunal.

vii) The Appellate Tribunal dismissed the appeal filed by the Bank vide order dated 04.10.2023.

3. In such circumstances, the Bank is here before this Court by way of this appeal.

4. We heard Mr. Tushar Mehta, the learned Solicitor General of India appearing for the State Bank of India and Mr. Anirban Bhattacharya, the learned counsel appearing for the respondent –IPCL.

5. We are informed that since the Bank was not permitted to put forward its case as stated in the rejoinder affidavit, the NCLT vide order dated 30.11.2023 rejected the Section 7 application filed by the Bank excepting what was stated by the Corporation in their reply.

6. Rule 42 of the National Company Law Tribunal Rules, 2016 reads thus:-

“42. Filing of Rejoinder.- Where the respondent states such additional facts as may be necessary for the just decision of the case, the Bench may allow the petitioner to file a rejoinder to the reply filed by the respondent, with an advance copy to be served upon the respondent.”

7. The learned Solicitor General of India invited the attention of this Court to a decision in Dena Bank vs. C. Shivakumar Reddy and Another (2021) 10 SCC 330 , wherein this Court has taken the view that in the absence of any express provision which prohibits or sets a time-line for filing of additional documents, there is no bar to the filing of documents over and above those documents initially filed with Section 7 petition. The Court further clarified that it is permissible to file any document until a final order either admitting or dismissing the Section 7 application is passed. The relevant part of the said decision of this Court reads thus:-

“71. Since a financial creditor is required to apply under Section 7 IBC, in statutory Form 1, the financial creditor can only fill in particulars as specified in the various columns of the Form. There is no scope for elaborate pleadings. An application to the adjudicating authority (NCLT) under Section 7 IBC in the prescribed form, cannot therefore, be compared with the plaint in a suit. Such application cannot be judged by the same standards, as a plaint in a suit, or any other pleadings in a court of law.

x x x x x

142. There is no bar in law to the amendment of pleadings in an application under Section 7 IBC, or to th