NCLAT Denies Corporate Debtor's Appeal for More Time to Reply in Section 7 Case, Citing 14-Day Rule.

The NCLAT dismissed the appeal by the Corporate Debtor, which sought additional time to file a reply in a Section 7 application under the I&B Code. The Tribunal emphasized the requirement under Section 7(5) for the Adjudicating Authority to decide on applications within 14 days, underscoring the summary nature of proceedings at this stage. The Tribunal found that allowing further delay would violate the I&B Code's mandate for timely completion of the CIRP, thus rejecting the Appellant's request and upholding the closure of the right to file a reply.

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The National Company Law Appellate Tribunal, Principal Bench, New Delhi, presided over by Justice Bansi Lal Bhat and Members Dr. Ashok Kumar Mishra and Dr. Alok Srivastava, addressed an appeal concerning the closure of the Corporate Debtor's right to file a reply in an application under Section 7 of the Insolvency and Bankruptcy Code, 2016. The application was pending at the pre-admission stage before the National Company Law Tribunal, New Delhi, Court-IV.

The Corporate Debtor was initially given time until November 9, 2020, to file a reply. However, by December 17, 2020, no reply had been submitted. The Appellant's counsel argued that internal conflicts among the Directors delayed the appointment of counsel and the filing of the reply.

The Tribunal was not persuaded by this argument, emphasizing the "mandate of Section 7(5) of the 'I&B Code'," which requires the Adjudicating Authority to admit or reject an application within 14 days of receipt. The Tribunal noted that the process at this stage is "summary in nature," focusing on the existence of financial debt and default, as well as the application's completeness.

The Tribunal concluded that granting the Appellant's request for further delay would contravene the legal mandate and the objectives of the I&B Code, particularly the timely completion of the Corporate Insolvency Resolution Process (CIRP). Consequently, the appeal was dismissed.

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