NCLAT rules substantial petition amendments without formal application violate natural justice principles requiring proper procedural compliance

NCLAT Principal Bench held that substantial amendments to a petition without formal application were impermissible. The amended petition constituted a complete redraft with new reliefs, additional parties, and fresh oppression allegations. Citing precedent, the Tribunal ruled that such amendments required proper application allowing appellants opportunity to rebut. The impugned order violated natural justice principles by denying hearing opportunity to appellant. Appeal disposed off, emphasizing procedural compliance for substantial petition amendments.

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Issues Involved:
1. Whether the amended petition filed by the Respondent was permissible without a formal application for amendment.
2. Whether the amendments constituted a fresh cause of action.
3. Whether the principles of natural justice were adhered to in allowing the amended petition.

Issue-Wise Detailed Analysis:

1. Permissibility of Amended Petition Without Formal Application:
The appellants challenged the orders dated 21.08.2024 and 07.06.2024 passed by the National Company Law Tribunal (NCLT), Chandigarh, allowing the Respondent to place on record an amended petition. The appellants argued that the Respondent did not file any application seeking liberty to amend the petition, which is contrary to the legal position regarding the amendment of pleadings and principles of natural justice. The amended petition was filed directly based on the order dated 07.06.2024, without detailing the changes proposed or the grounds necessitating the amendment, thus violating the requirement for transparency and opportunity for rebuttal by the opposite party.

2. Fresh Cause of Action:
The appellants contended that the amended petition essentially redrafted the original petition with additional grounds and reliefs, constituting a fresh petition in the guise of an amendment. The amendments included new interim and final reliefs, new parties, and new facts and grounds that were not part of the original petition. The comparative chart provided by the appellants highlighted the substantial nature of these amendments. The Tribunal referred to the case of Aurosagar Estates Private Limited and Ors Vs M.C. Davar Holdings Private Ltd, emphasizing that the Tribunal cannot allow substantial amendments unrelated to the original cause of action or prayer. Similarly, in IVRCL Ltd Vs M/s IOT Utkal Energy Services Ltd & Others, it was held that fresh causes of action cannot be raised in a pending petition.

3. Principles of Natural Justice:
The appellants argued that the NCLT's reliance on Section 424 of the Companies Act, 2013, to hold that it is not strictly bound by the CPC for amendments, failed to appreciate the well-accepted principles of amendment of pleadings. The NCLT erred in holding that no prejudice would be caused to the appellants when no opportunity was granted to respond to the amended petition. The Tribunal noted that the impugned order did not adhere to the principles of natural justice as it did not give an opportunity of being heard to the appellants. The Tribunal concluded that for substantial amendments, an application ought to have been moved with proposed amendments, allowing the appellants to rebut such amendments.

Conclusion:
The Tribunal set aside the orders dated 21.08.2024 and 07.06.2024, directing that the Respondent be given one more opportunity to move an application for amendment, inclusive of the proposed amendments, with liberty to the appellants to respond. The NCLT was instructed to decide the matter as per law, ensuring adherence to the principles of natural justice. Both appeals were disposed of accordingly, along with any pending applications.

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