Court sets aside petition order due to lack of opportunity for written objection, stressing natural justice principles. Writ petition granted.

The court set aside the order admitting a petition under Section 17 of the Insolvency and Bankruptcy Code, 2016, due to the National Company Law Tribunal's failure to grant the petitioner the opportunity to file a written objection, violating principles of natural justice. The court emphasized the importance of allowing respondents to present written objections during proceedings before the NCLT. Despite the availability of an appeal process, the court allowed a writ petition, directing the petitioner to file a written objection within a specified timeframe and ensuring a fair hearing in compliance with natural justice principles.

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Issues: Challenge to order admitting a petition under Section 17 of the Insolvency and Bankruptcy Code, 2016; Violation of principles of natural justice by NCLT.

Analysis:
The judgment concerns a challenge to an order admitting a petition under Section 17 of the Insolvency and Bankruptcy Code, 2016, based on the violation of principles of natural justice by the National Company Law Tribunal (NCLT). The petitioner argued that they were not given an opportunity to file a written objection or dispute the claims made against them during the proceedings before the NCLT. It was contended that this lack of opportunity constituted a grave miscarriage of justice and a violation of the principles of natural justice.

The respondent, on the other hand, asserted that the petitioner had been provided with a hearing and had failed to present any material to suggest a defense in the Section 9 proceeding of the Code of 2016. After considering the arguments from both sides and the available materials, the court found that the NCLT had not granted the petitioner the opportunity to file a written objection, which was essential for a fair hearing and adherence to the principles of natural justice.

The court referred to a previous judgment, Sree Metaliks Limited, which emphasized that a respondent before the NCLT should be given an opportunity to file a written objection as part of the hearing process. While acknowledging that there could be exceptional circumstances where such an opportunity might be denied, the NCLT must provide reasons for doing so. In this case, the NCLT failed to provide any reasons for not allowing the petitioner to file a written objection, leading to a breach of natural justice.

Despite the availability of an appeal process against NCLT orders, the court highlighted that the existence of an alternative statutory remedy does not bar the filing of a writ petition if fundamental rights are violated or if there is a breach of natural justice. Consequently, the court set aside the impugned order dated July 31, 2017, and directed the petitioner to file a written objection within a specified timeframe. The NCLT was instructed to proceed with the matter promptly, ensuring a fair hearing and compliance with the principles of natural justice.

In conclusion, the writ petition was disposed of without any costs, and certified copies of the order were to be provided to the parties upon request. The judgment underscores the importance of upholding natural justice principles in insolvency proceedings and ensuring that all parties are given a fair opportunity to present their case.

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