Court allows filing of supplementary affidavit in IBC case, emphasizing fair play and impartiality.

The court found in favor of the petitioner, holding that the application under Article 227 was maintainable. It ruled that Rule 55 of the NCLT Rules did not apply to IBC proceedings and criticized the NCLT's biased refusal to allow the corporate debtor to file a supplementary affidavit. The court set aside the impugned order, permitting the filing of the supplementary affidavit and instructing the NCLT to consider it in the main matter. Fair play and impartiality in judicial proceedings were emphasized by the court.

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Issues Involved:
1. Bias in the National Company Law Tribunal (NCLT) order.
2. Applicability of Rule 55 of the NCLT Rules, 2016.
3. Maintainability of the application under Article 227 of the Constitution of India.
4. Availability of an alternative remedy under Section 61(1) of the Insolvency and Bankruptcy Code (IBC), 2016.

Issue-wise Detailed Analysis:

1. Bias in the National Company Law Tribunal (NCLT) order:
The petitioner argued that the NCLT exhibited bias by allowing the financial creditor to file a rejoinder beyond the stipulated time while refusing the corporate debtor’s request to file a supplementary affidavit without assigning valid reasons. The petitioner contended that this demonstrated a lack of impartiality and violated the cardinal rule of fair play. The court noted that the NCLT accepted the financial creditor’s rejoinder filed significantly late without providing any justification, while rejecting the corporate debtor’s request in a single sentence, which indicated a partisan approach.

2. Applicability of Rule 55 of the NCLT Rules, 2016:
The opposite party argued that Rule 55 barred the filing of further pleadings without the tribunal's leave. However, the petitioner contended that Rule 55 of the NCLT Rules does not apply to insolvency resolution proceedings under the IBC. The court found merit in the petitioner’s argument, noting that the IBC has its own rules, and Rule 55 of the NCLT Rules is not mentioned in the IBC Rules. Therefore, Rule 55 cannot be automatically invoked in IBC matters. Even if Rule 55 were applicable, it does not require a written application for leave, and the tribunal’s refusal lacked a valid basis.

3. Maintainability of the application under Article 227 of the Constitution of India:
The opposite party argued that an appeal under Section 61(1) of the IBC was available, making the application under Article 227 inappropriate. However, the petitioner argued that Section 61(1) refers to specific orders under Part II of the IBC, and the refusal to grant leave for a supplementary affidavit is not one of them. The court agreed, stating that Section 61(1) does not cover the impugned order, making Article 227 the only remedy. The court emphasized that while alternative remedies generally restrict High Court interference, they do not constitute an absolute bar, especially when no alternative remedy is available.

4. Availability of an alternative remedy under Section 61(1) of the Insolvency and Bankruptcy Code (IBC), 2016:
The court examined Section 61(1) of the IBC, which allows appeals against orders of the Adjudicating Authority under Part II of the IBC. The court noted a distinction between Section 61(1) and Section 62, which provides for appeals to the Supreme Court against any order of the NCLT. The court concluded that the legislature intended for Section 61(1) to apply only to specific orders under Part II of the IBC. Since the impugned order did not fall within these provisions, it was not appellable under Section 61(1). Therefore, the petitioner had no alternative remedy but to approach the High Court under Article 227.

Conclusion:
The court held that the application under Article 227 was maintainable and that Rule 55 of the NCLT Rules did not apply to IBC proceedings. The court found the NCLT’s refusal to allow the supplementary affidavit biased and unjustified. Consequently, the court set aside the impugned order, allowing the corporate debtor to file the supplementary affidavit and directing the NCLT to consider it in the main matter. The court emphasized the importance of fair play and impartiality in judicial proceedings.

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