Procedural fairness in Section 7 insolvency matters requires hearing the corporate debtor's reply before admission when no deliberate default is shown.

In Section 7 insolvency proceedings, a corporate debtor should be given a fair opportunity to place its reply on record and be heard before any admission order is passed, especially where the record does not show deliberate default or wilful non-defence. The reply had already been filed before the next hearing and remained under scrutiny in the tribunal's system, so procedural fairness required that the defence be considered by the adjudicating authority. The petition was therefore disposed of with directions restoring the debtor's opportunity to contest the insolvency petition before the tribunal.

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Issues: Whether the corporate debtor should be permitted to have its reply placed on record and be afforded an opportunity of hearing in the Section 7 insolvency proceedings.

Analysis: The reply had been filed before the next hearing date and remained under scrutiny in the tribunal's system. The surrounding order sheets did not indicate deliberate delay or a wilful failure to defend. Given the serious consequences that may follow an order under Section 7 of the Insolvency and Bankruptcy Code, 2016, the debtor ought to be given a fair opportunity to place its defence before the adjudicating authority.

Conclusion: The petitioner was entitled to have the reply taken on record and to be heard by the NCLT before any further order on the Section 7 petition.

Final Conclusion: The proceeding was disposed of with directions to restore the petitioner's opportunity to contest the insolvency petition before the tribunal.

Ratio Decidendi: In Section 7 insolvency proceedings, a corporate debtor should not be deprived of the opportunity to file and press its reply where the record does not show deliberate default, and procedural fairness requires that the defence be heard before admission.

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