Case Note & Summary
The appeal arose from an order dated 08.12.2025 by the National Company Law Tribunal, which closed the Appellant's right to file a reply in insolvency proceedings initiated by the Respondent. The Appellant, Hannu Steels Private Limited, entered into a License User Agreement with Rathi Powertech Global Private Limited, which later led to disputes over unpaid license fees. The Appellant terminated the agreement citing a closure order from the Commission for Air Quality Management. The Respondent filed an application under Section 9 of the Insolvency and Bankruptcy Code, claiming operational debt due to unpaid fees. The Appellant's counsel failed to file a reply within the granted time, leading to the closure of the right to respond. The Appellant contended that this closure denied it a reasonable opportunity to be heard due to its previous counsel's negligence. The Respondent argued that the Appellant was aware of the proceedings and failed to comply with judicial directions. The Tribunal analyzed the procedural discretion exercised by the Adjudicating Authority and the principles of natural justice, ultimately deciding that the Appellant should be granted one final opportunity to file its reply, as the denial of such an opportunity could lead to serious civil consequences. The appeal was allowed, and the order closing the right to file a reply was set aside, allowing the Appellant to present its defence (Paras 1-62).
Headnote
A) Insolvency Law - Right to File Reply - Closure of Right to File Reply - Insolvency and Bankruptcy Code, 2016, Section 9 - The Appellant's right to file a reply was closed by the Adjudicating Authority due to non-filing despite opportunities. The Tribunal held that the Appellant should be afforded a final opportunity to present its defence, emphasizing the importance of natural justice in insolvency proceedings (Paras 60-61).
Issue of Consideration
Whether the order closing the Appellant's right to file a reply suffers from any legal infirmity warranting interference.
Final Decision
The Tribunal allowed the appeal, set aside the order closing the Appellant's right to file a reply, and granted the Appellant one final opportunity to file its reply before the Adjudicating Authority within a time-bound schedule.
Law Points
- Insolvency proceedings
- natural justice
- procedural discretion
- sufficient cause
- timely filing of replies
