TaxTMI 
TaxTMI 
2026 (7) TMI 19
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....llant's right to file an additional affidavit on revival of the proceedings after an order of remand, directing the proceedings to be decided de novo afresh has been rejected by the Ld. NCLT, Delhi Bench, by the impugned order of 29.05.2026, as it has been passed in IA No.1543/2026 in CP(IB) No.125(ND)/2024. The question engaging consideration would be whether there could be absolute closure to raise an additional pleading more particularly, when the prior proceedings before the order of remand itself was not an adjudication on merits. Hence, the present appeal. 3. The procedures, governing judicial proceedings, it needs no special reference, that they are the handmade of justice. Primarily, the underlining concept, as applicable, invariably in any of the judicial proceedings has been that caution is to be exercised by courts that none of the parties participating in the proceedings may by the end of the proceedings have any grievance, from the perspective that they had not been permitted to avail or were not granted an effective opportunity of hearing when the lis in which he or she is a party was seized with the court under the judicial proceedings, where upon the issue of its....
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....cribed in respect of the provisions contained under the Companies Act, 2013, or for any of the proceedings, which have been undertaken by the Tribunals as constituted under Section 408 of the Companies Act, 2013. 7. If Tribunals thus constituted under Section 408 of the Companies Act, 2013, with which we will be more concerned in this company appeal, have been conferred, by the Central Government, with sufficient powers, for the purposes to discharge, exercise and to perform such functions that may be necessary, for the purposes to attain the object of the Act. 8. In other words, if Section 469 of the Companies Act, 2013, i.e., the rule making power, as construed therein along with Section 408, is taken into consideration, the law never intended to create any procedural impediment, in exercise of the functions of the Tribunals, as constituted under Section 408 of the Companies Act, 2013. Similar would be the interpretation to be given, as regards to the constitution of the Appellate Tribunals contemplated under Section 410 of the Companies Act, 2013, and owing to the fact that, be it the Tribunals constituted under Section 408 or the Appellate Tribunals under Section 410, bot....
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....er Section 7 of the I & B Code, 2016, as drawn by the Appellant came up for consideration before the Ld. Tribunal on 09.10.2025. The Ld. Tribunal took the following view as under: - "2. We have taken a view in CP-109(ND)/2023 filed by Mr. Vinod Anand & Anr. under Section 241 read with Section 242 of the Companies Act, 2013 that no substantiated act of oppression or mismanagement attributable to Respondents No. 2, Mr. Utsav Bhasin, Director of Golden Rolls Private Limited and No. 3, Mr. Narender Kumar Bhasin, Director of Golden Rolls Private Limited made out. Consequently, CP-109(ND)/2023 has been dismissed. Therefore, the prayers in IB-125(ND)/2024, do not survive. Accordingly, IB-125(ND)/2024 stands dismissed." 14. From the part of these order dated 09.10.2025, that has been extracted above, the dismissal of proceedings under Section 7 of the I & B Code, 2016, by the Ld. Tribunal, had been on the borrowed ground of the dismissal of proceedings under Section 241 and 242 of the Companies Act, 2013, drawing the rationale that because of non-establishment of an act of oppression or mismanagement, as to be the reason to be borrowed, for the purposes of considering the appli....
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....at: (i) The application under Section 7 of the I & B Code, 2016, which was decided, was not an independent decision of Section 7 on merits, (ii) All the issues raised in Section 7 application remained unanswered on merits of it, (iii) The basis of the order dated 09.10.2025 being the observations those were made under Section 241 and 242 of the Companies Act, 2013, pertaining to the aspect of oppression and mismanagement having not been established any relevance, that has been borrowed by the Ld. Tribunal to dismiss the application under Section 7 of the I & B Code, 2016. (iv) Factors to be considered for Section 7, are entirely different to the ingredients required for Section 241 and 242 of the Companies Act, and they don't have an overlapping effect. This is a process unheard in the eyes of law. 17. These observations in itself would infer that, when the Ld. Tribunal passed an order on 09.10.2025 on CP (IB)125/ND/2024, it reflect rather that, there was no determination made by the Ld. Tribunal on merits based on the application of pleadings raised by the parties, in the proceedings under Section 7 of I & B Code, 2016, or upon determination ....
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.... would be falling for consideration under the facts of the present case would be as to what the term "pleading" would denote to, under these circumstances. 20. Up to this stage of order of remand of 19.12.2025, there is no controversy. It is that, only after the revival of the proceedings of Section 7 of the I & B Code, 2016, the Appellant filed an IA numbered as IA(IBC) 1543(DB)/2026 on 24.03.2026. We make it clear at this juncture itself that, we have to bear in mind that filing of this application has to be read from the date of the remand and it cannot be treated as to be a belated application because the remand order itself happens to be of 19.12.2025. So, the application in itself which was filed on 24.03.2026, happens to be in close proximity to the order of remand dated 19.12.2025, and didn't express any intention to delay the proceedings. In the application thus filed, the Appellant prayed for the following reliefs: - "a. To Allow Applicant/ Financial Creditor to file Additional Affidavit in Company Application (IB) No. 125 of 2024 under Section 7 of the Insolvency and Bankruptcy Code, 2016. b. Pass any other or further order(s) as may deem fit and pro....
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.....10.2025, and was turned down and quashed by this Appellate Tribunal while rendering the judgment of remand of 19.12.2025. Thus, all the interlocutory orders prior to remand in the proceedings of CP (IB)125/2024, stand merged and has met its judicial death, they cannot be retrieved back. 25. The Ld. Tribunal has erred at law while deriving a rationale of non-filing of a rejoinder prior to remand, which too is an interlocutory proceeding of 29.04.2024 and 22.07.2024, which was prior to the remand, that has its automatic closure as soon as the judgment of rejection of Section 7 has been set aside. Since, the final judgment had been set aside by the Appellate Tribunal, hence there would be a deeming setting aside of the interlocutory orders of issuing directions to file rejoinder affidavit also. Hence, the earlier two interlocutory orders of non-filing of a rejoinder in the earlier proceedings, that cannot now be taken into consideration to deny to consider the application, being IA(IBC)1543/2026, as filed by the Appellant, to take the additional affidavit on record. 26. Similarly, a very peculiar observation and reason too has been derived by the Ld. Tribunal, once again retrie....
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....ound. But the fact remains that while considering the question, the revisional court has dealt with the past conduct of defendant No. 11. It is established principle of law that while considering the question of grant of adjournment or recalling of an order, the past conduct is immaterial. The court has to look into the merit of the case confining to the date of the order sought to be recalled was passed. The court has to look out whether sufficient ground has been made out for the default on the very date or not. Looking into the past conduct would be an extraneous consideration which the court should not go into. In that view of the matter, taking into account the past conduct does not seem to me to be fair and correct approach adopted by the learned court below." 28. We do not find any logic behind it as to, how the Ld. Tribunal was perceiving that the Appellate Tribunal to make any observation, thereby permitting the Appellant to file an additional affidavit more over that couldn't have been an issue while passing final order of 19.12.2025. More particularly, when the adjudication of Section 7 of the I & B Code, 2016, was a disposal, which was based upon the decision of 241 ....
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....o be read with Rule 39 of the NCLT Rules, 2016. Rule 39 of the NCLT Rules, 2016, pertains to filing of an affidavit by the parties to the proceedings, in the shape of an additional plea, which has to be in accordance with the format prescribed therein. Either Rule 39 or Rule 40 of the NCLT Rules, 2016, for that matter, in itself, providing for taking additional evidence on record does not create any absolute restriction though the provisions of Rule 40 of the NCLT Rules, 2016, commences with a non-obstante clause, but it too still carves out an exception that, the court may upon justifying the reasons to take an additional affidavit or additional evidence on record can permit to do the same, in order to better substantiate the case, and in adherence to the principles of natural justice. 32. Thus, the manner in which the interpretation has been given by the Ld. Counsel for the Respondent that may not be attracted, owing to the restricted rather conservative finding recorded in the impugned order, which was absolutely preposterous and unsustainable because under the wider principles of natural justice, filing of a pleading that too in a summary proceedings cannot be curtailed unti....