Right to adduce foundational documents: refusal to permit filing of assignment deed led to remand for fresh quantification and adjudication.

Challenge concerned refusal of an adjournment to permit filing a Deed of Assignment of Business Debt and whether that denial impaired the appellant's ability to establish the claim quantum under the Insolvency and Bankruptcy Code. The Tribunal reiterated that when a party's material right may be affected by temporary inability to place a foundational document on record, the adjudicating forum should allow its placement for lawful appreciation. The impugned rejection for being below the monetary threshold was quashed insofar as the Deed was not considered, and the matter was remitted to the NCLT for fresh adjudication on merits.

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Issues: Whether the learned NCLT erred by refusing an adjournment to permit the appellant to place the Deed of Assignment of Business Debt dated 03.10.2021 on record and thereby violated the principles of natural justice, resulting in an incorrect determination of the quantum of claim under Section 4 of the Insolvency and Bankruptcy Code, 2016 (and consequent refusal of relief under Section 9 of the Insolvency and Bankruptcy Code, 2016).

Analysis: The Tribunal examined (i) the appellant's plea that on 31.05.2022 she sought a pass-over/adjournment to place the Deed of Assignment of Business Debt on record and that the learned NCLT refused that request, (ii) the effect of denial of that opportunity on the ability to establish claim amount for purposes of Section 4 of the Insolvency and Bankruptcy Code, 2016, and (iii) the subsequent acceptance of the Assignment Deed on record before this Tribunal by order dated 03.09.2024 under Order XLI Rule 27 of the Code of Civil Procedure. The Tribunal noted established principle that when a party's material right may be affected by temporary inability to place a foundational document on record, the adjudicating forum should enable the party to place such document and permit lawful appreciation of its contents. The Tribunal considered whether it should itself determine the veracity and arithmetic quantification based on the Deed or remit the matter back to the learned NCLT for fresh appreciation; observing that detailed documentary appreciation and arithmetical quantification are best undertaken by the adjudicating authority first seized of the petition.

Conclusion: The impugned order dated 31.05.2022 is quashed insofar as it rejected the Company Petition on the sole ground that the claimed quantum was less than Rs. 1 crore without considering the Deed of Assignment of Business Debt dated 03.10.2021. The appeal is allowed on this limited ground and the matter is remitted to the learned NCLT, Bengaluru Bench, to re-decide Company Petition CP (IB) No. 133/BB/2021 on merits after considering the impact of the said Deed, with all parties free to place evidence and contentions before the Adjudicating Authority.

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