Whether NCLT can read the contents of Rejoinder against the party whose right to rejoinder was closed and not taken on record?

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Shubham Budhiraja

[LLB, ACS, BCOM(H)]

Budhirajalawchambers@gmail.com 




Company-A has filed section 7 against company-B. The rejoinder was not taken on record because it was filed after the stipulated time. Despite this, NCLT in its order relied upon the contents of rejoinder and read it against the Company. NCLAT in appeal held that relying on aforesaid pleading/ rejoinder which is not on record is a patent illegality. [1]

 

(i)             On the one hand the Court has passed the effective orders for not taking on record the rejoinder filed by the Financial Creditor and on the other hand the Court has made reference to the rejoinder under the specific head created for that purpose ‘rejoinder of the petitioner’ and then recorded the findings also on the basis thereof.

 

(ii)           The impugned order is patently illegal as it has taken into consideration the pleadings which were not on record and therefore, the appeal is hereby allowed and the impugned order is set aside.

 

(iii)         The matter is remanded back to the Tribunal to decide again without referring the rejoinder as it is not on record and then pass a speaking order in accordance with law.


[1] Company Appeal (AT) (Insolvency) No. 524 of 2023, NCLAT

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