TaxTMI 
TaxTMI 
2025 (8) TMI 1831
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....efective. 2. The brief facts of this case are that the Appellant filed the application under Section 7 in form 1 in terms of Rule 4 of the Rules on 01.08.2023 supported by an affidavit dated 17.07.2024. The verification of the petition is dated 26.07.2024. 3. After filing of the petition, the registry of the Tribunal raised certain objections indicating defects in filing on 10.10.2023. The said defects were to be removed by the Appellant within 7 days in terms of Rule 28(2) of the NCLT, Rules, 2016 (in short 'Rules, 2016'). 4. The Appellant did not refile the said petition after removing the defects, therefore, the registry of the Tribunal refused to register the application filed under Section 7 in form 1 on 18.10.2023. 5. The Appellant challenged the order dated 18.10.2023 by way of an appeal No. 4 of 2024 provided under Rule 63 of the Rules, 2016 before the Bench. Rule 63 of the Rules, 2016 is reproduced as under:- "63. Presentation and scrutiny of petitions or applications.- In case of the scrutiny of the petitions or applications as provided in Part III and elsewhere in these rules, if any person is aggrieved of the decision of the Registrar or such other ....
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....arned counsel for the Appellant submits that this Appeal has become infructuous in view of the subsequent events. Appeal is dismissed as infructuous. 8. Thereafter, the application filed by the Appellant, already registered vide order dated 08.02.2024 as CP (IB) No. 97 of 2024 was listed before the Tribunal for orders on 28.02.2024. On that date, the Tribunal passed the following orders:- "This is an application filed under Section 7 of the Insolvency & Bankruptcy Code 2016. It is stated by the Applicant that advance copy of the Application in terms of Rule 4 of Adjudicating Authority, IBC Rules, 2016 has already been served on the Respondent. Let notice be issued to the Respondent by the Registry, returnable by next date. The Applicant is directed to collect the notice from the Registry within three days and serve upon the Respondent along with copy of this order through Registered Ad post / Speed-post / Dasti mode as well as on the registered email ID of the Respondent registered with the MCA within seven days. The Respondent may file reply, if any, within seven days form the date of receipt of notice. Rejoinder, if any, be filed with seven days ther....
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....llant in para 4, held in para 6 that "on the face of it the affidavit in support of the petition was sworn prior to the date of signing of the petition as affidavit was sworn on 17.07.2024 and petition was verified and signed notarized on 26.07.2024. We considered this petition as defective." 14. Counsel for the Appellant has argued that the Tribunal has committed an error in dismissing the petition, holding it to be a defective petition, which is contrary to the provision of Section 7(5) proviso. According to which, the Adjudicating Authority is obligated to give a notice to the applicant to rectify the defect in his application within a period of seven days . Section 7(5) is also reproduced as under:- 7(5) Where the Adjudicating Authority is satisfied that- Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority. 15. He has also relied upon following decisions of this Court, in support of his submission, in the case of Mr. Satyaprakash Aggarwal & Ors....
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....e are notified, the application made under subsection (1) of section 7, sub-section (1) of section 9 or sub-section (1) of section 10 of the Code shall be filed before the Adjudicating Authority in accordance with rules 20, 21, 22, 23, 24 and 26 of Part III of the National Company Law Tribunal Rules, 2016. (2) An applicant under these rules shall immediately after becoming aware, notify the Adjudicating Authority of any winding-up petition presented against the corporate debtor. (3) The application shall be accompanied by such fee as specified in the Schedule. (4) The application and accompanying documents shall be filed in electronic form, as and when such facility is made available and as prescribed by the Adjudicating Authority: Provided that till such facility is made available, the applicant may submit the accompanying documents, and wherever they are bulky, in electronic form, in scanned, legible portable document format in a data storage device such as a compact disc or a USB flash drive acceptable to the Adjudicating Authority. 18. He has then referred to Rule 26 of the Rules, 2016 and more particularly Rule 26 (2) to contend that ever....
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....vided that the grounds thereof are stated. (2) The costs of every affidavit which shall unnecessarily set forth matters of hearsay or argumentative matter, or copies of or extracts from documents, shall (unless the Court otherwise directs) be paid by the party filing the same." 22. He has referred to the affidavit which has been filed in this case alongwith application filed under Section 7 in form 1. Although the affidavit rune into many pages as it is the replica of the petition but the verification and the affidavit which are in question are reproduced as under:- 23. Counsel for the Respondent has submitted that as per Rule 126 of the Rules, 2016 and order XIX rule 3 of the CPC, the deponent has to specifically swear on oath about the para of affidavit pertaining to him knowledge and the paras based upon his belief. 24. It is submitted that since the affidavit in question is not in accordance with provisions of order XIX rule 3 much less Rule 126 of the Rules, 2016, therefore, it was defective and there is no error in the order of the Tribunal holding that the petition is to be defective. He has then argued that once the petition has been found to be defective,....
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....s squarely covered by the provisions of Section 7(5)(b) proviso and Dena Bank (Supra) where the Hon'ble Supreme Court has held that the AA is obliged to give notice to the Appellant to rectify the defects within a period of 7 days. 29. It is pertinent to mention that the same provision has been provided in the Rules when the defect is noticed by the registry and 7 days time is given to the Applicant to rectify the same. The provisions for giving time to the applicant is to enable it to remove the defects so that a meritorious matter may not be dismissed on the ground of technicality. It is altogether hyper technicality. 30. We do not agree with the contention of the Respondent that when the petition was filed with defective affidavit then the petition was itself nonest. 31. No other point has been raised. 32. In view of the aforesaid facts and circumstances, we find merit in the present appeal and the same is hereby allowed and the impugned order is set aside. 33. The main CP (IB) No. 97 of 2024 is restored to its original number and the matter is remanded back to the Tribunal to decide the same on merits in accordance with law. 34. The parties are directed to app....