NCLT Closes The Right To File Reply Due To Delay, NCLAT Delhi Allows Appeal And Directs To Take Reply On Record

Brief Facts

The Appellant had filed its Reply in the proceedings before the NCLT Delhi ("Adjudicating Authority") and the Registry of the NCLT had kept the Reply under 'Objection' category as the defects in the Reply were not cured. The Adjudicating Authority took note that defects were not being cured by the Appellant for a long time, and vide an order dated 30.05.2022 had closed the Appellant's right to file a reply, with an observation that the Reply was filed after approximately 51 days of delay.

The Appellant filed an appeal against the order dated 30.05.2022, contending that the delay period of 51 days was incorrectly mentioned and the main matter has been listed for arguments on 09.06.2022. The Appellant submitted that the impugned order denies him the right to be heard and raise grievances both on facts and law.

Observations By NCLAT

The NCLAT observed that Rule 34 of the NCLT Rules, 2016 provides that in a situation not provided in these rules, the Tribunal (Adjudicating Authority) may determine in the procedure in a particular case in accordance with the Principles of Natural Justice, by recording reasons in writing.

The Bench reiterated that every man must be given an opportunity of being heard. "The technical aspect of the Appellant keeping his Reply lying in the Registry based on the objection is not a proper one without delving deep in the matter any further and also at this stage this Tribunal is not expressing any opinion one way or other about the merits of the matter which is to be taken up on arguments on 09.06.2022."

The NCLAT directed the Adjudicating Authority to receive the Reply of the Appellant after defects are cured from the Office of the Registry and to file the same before the next date of hearing on 09.06.2022 without fail. Further directions were given to the Appellant to supply a clean copy of the Reply to the opposite party's counsel before 09.06.2022

The NCLAT also clarified that the Adjudicating Authority must proceed with hearing of the petition and pass a reasoned speaking order in a just, fair and proper manner, by adhering to the Principle of natural justice and uninfluenced, untrammeled with any of the observations made by this NCLAT. Accordingly, the appeal was disposed off.

Case Title: Samyak Metals Pvt. Ltd. v Ugro Capital Ltd., Company Appeal (AT) (Insolvency) No. 668 of 2022.

Counsel for Appellant: Mr. Davesh Bhatia, Mr. Arjun Mahajan and Mr. Raghvendra V. Budholia, Advocates.

Counsel for Respondent: Mr. Arvind Kr. Jadon, Advocate.

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