2019 (12) TMI 1699 - Tri - IBC

Filing extra documents in a s.9 IBC insolvency petition after the reply stage allowed, subject to proof and relevance

Whether additional documents could be taken on record in a s.9 IBC proceeding despite not being filed with the reply was the dominant issue. The NCLT held ... Application filed for receiving additional documents - delay in filing such additional documents - Operational Creditor filed a petition u/s 9 against Corporate Debtor for default of Operational Debt - HELD THAT:- The application is filed to receive the additional documents filed with application. It is not the stage to look into the relevancy or otherwise of the documents. The same will be decided at the time of passing final order. Of course, these documents are not filed by Applicant along with counter. Applicant ought to have filed these documents along with counter filed in the main petition. However, there is a delay in filing the documents. The delay can be condoned as parties are yet to advance arguments. The documents can be received subject to proof and relevance. In the result, application is allowed. Receive the documents, subject to proof and relevance. 1. ISSUES PRESENTED AND CONSIDERED i. Whether, in exercise of inherent powers under Rule 11 of the National Company Law Tribunal Rules, 2016, the Tribunal should permit the corporate debtor to file and place on record additional documents after filing its counter in the pending petition. ii. Whether the delay in filing such additional documents should be condoned at the present stage, and if so, on what conditions (including whether questions of relevance, admissibility, and proof should be deferred to final adjudication). 2. ISSUE-WISE DETAILED ANALYSIS Issue i: Permission to place additional documents on record under Rule 11 Legal framework: The Tribunal considered the application invoking Rule 11 of the National Company Law Tribunal Rules, 2016 (inherent powers) seeking leave to file additional documents in the pending petition. Interpretation and reasoning: The Tribunal treated the request as one for 'receiving additional documents' and held that, at this stage, it is not required to determine the relevancy or otherwise of the documents sought to be introduced. The Tribunal accepted that the corporate debtor had not filed the documents along with its counter and that there was delay, but noted that arguments in the main matter were yet to be advanced. In these circumstances, permitting the additional filing would not foreclose the opposing party's objections because the documents could be taken on record without prejudging their evidentiary value. Conclusion: The Tribunal permitted the corporate debtor to file the additional documents, with the express caveat that their acceptance on record would be subject to proof and relevance at the time of final disposal. Issue ii: Condonation of delay and deferral of objections on relevance/proof to the final stage Interpretation and reasoning: The Tribunal acknowledged that the corporate debtor 'ought to have' filed these documents with its counter, indicating a lapse and resulting delay. Nevertheless, it concluded that the delay could be condoned because the matter had not reached the stage of final arguments. The Tribunal expressly held that it was 'not the stage' to examine relevance, and that such questions would be considered while passing the final order in the main petition. This approach preserved the operational creditor's right to contest admissibility, proof, and relevance later, while allowing the record to be supplemented at the present stage. Conclusion: The delay in filing additional documents was condoned, and the documents were ordered to be received on the file, expressly subject to proof and relevance to be assessed at final adjudication.