Belated objections to rehearing and assignment cannot defeat Section 7 insolvency admission when debt and default are established.
Belated objections raised after final arguments and reservation of orders were properly rejected because the grounds were already available earlier, and reopening the matter would offend procedural propriety. The tribunal treated hearing and pronouncement as a continuous stage and found no basis to permit rehearing. The Section 7 insolvency application was sustained because the corporate debtor had acknowledged the debt, addressed the settlement proposal to the assignee, and reflected the liability in its balance sheets. Technical objections on locus, assignment, stamping, and limitation were rejected as belated and unsupported, since debt, default, and acknowledgment within limitation were established on the record.
Issues: (i) whether the application seeking rehearing after the main company petition had been reserved for orders was rightly rejected; (ii) whether the Section 7 insolvency application was liable to fail on the grounds of locus, defective assignment, or limitation.
Issue (i): whether the application seeking rehearing after the main company petition had been reserved for orders was rightly rejected.
Analysis: The record showed that the grounds raised in the interlocutory application were available to the appellant during the hearing of the main petition itself. The request was made only after final arguments had concluded and the matter had been reserved for orders. In such a situation, entertaining a fresh application to reopen the matter would be contrary to procedural propriety. The principle that hearing and pronouncement form a continuous stage supported the refusal to permit a rehearing based on belated objections.
Conclusion: The rejection of the application for rehearing was and called for no interference.
Issue (ii): whether the Section 7 insolvency application was liable to fail on the grounds of locus, defective assignment, or limitation.
Analysis: The Corporate Debtor had acknowledged the debt in its reply to the demand notice and later addressed the one-time settlement proposal to the assignee, showing awareness of the assignment and acceptance of the respondent's capacity. The balance sheets also reflected the debt. The objection that the trust deed was not filed and the assignment deed was insufficiently stamped was treated as a technical plea raised belatedly, when the assignment documents were already part of the record. The acknowledgment of debt within limitation, together with the continuing liability and default, was sufficient to sustain admission under the insolvency code.
Conclusion: The Section 7 application was not barred by limitation and was maintainable despite the objections to locus and assignment.
Final Conclusion: The orders admitting insolvency proceedings and rejecting the belated rehearing request were affirmed, and the appeal failed in entirety.
Ratio Decidendi: Belated procedural objections and technical challenges to assignment cannot dislodge a Section 7 admission where debt, default, and acknowledgment of liability are otherwise established on the record.
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