Procedural fairness in company appeals allowed a final chance to file counter affidavits despite earlier missed opportunities.

NCLAT held that, despite repeated prior opportunities having been left unutilised before the NCLT, the closure of time to file counter affidavits could be revisited in the interests of justice. It applied the principle that a party cannot justify an impugned order on new grounds not recorded in that order, and also recognised that procedural time limits are intended to aid, not defeat, fair hearing. The appellants were censured for lack of diligence, but were granted a final ten-day opportunity to file counter affidavits, failing which the consequences of the impugned orders would follow. The company appeals were disposed of subject to that opportunity.

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Issues: Whether the opportunity to file counter affidavits, which was closed by the NCLT, could be reopened by the Appellate Tribunal and counter affidavits permitted to be filed in the company appeals.

Analysis: The appeals raised a common factual and legal question about reopening the forfeiture/closure of the opportunity to file counter affidavits. The Tribunal noted that the NCLT record showed multiple earlier opportunities were granted and not availed of, but also observed that respondents did not rely on any grounds before the NCLT justifying the impugned orders by reference to reasons not recorded in those orders. Principles limiting an opposite party at appellate stage from expanding or inventing new grounds beyond the reasons recorded in the impugned order were applied. The Tribunal also applied the equitable principle that procedural time limits and forfeiture rules operate as handmaidens of justice and should not be used mechanically to deny a litigant an effective opportunity to be heard, having regard to precedents holding rigid time bars may be relaxed to meet ends of justice.

Conclusion: The Appellants are granted a final opportunity of ten days to file counter affidavits; failing which the consequences of the impugned orders will follow. The company appeals are disposed of subject to this grant of opportunity. The Tribunal censured the appellants' lack of diligence but provided relief in the interests of justice.

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