The National Company Law Appellate Tribunal has held that the dismissal of an application under Section 9 Insolvency and Bankruptcy Code as being non-maintainable for a technical defect such as incomplete Form 5 is not warranted.
Case of the Appellant
The appellant had instituted an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation for corporate insolvency resolution process against the corporate debtor.
Observation of NCLT
The National Company Law Tribunal, rejected the application for being non maintainable on account of the existence of defects. The defect as noted by the adjudicating authority was pertaining to related to the omission in appending of signatures on the application in the prescribed format in Form 5 on application by operational creditor and the same being notarized.
The order was criticized before NCLAT, inter alia, on the ground that the Adjudicating Authority violated the mandate of law in not providing an opportunity to the appellant for rectifying the defect or removing the shortcomings in terms of the proviso of Section 9(5) IBC.
In the words of the Court
“If there was any shortcoming in regard to filing of Vakalatnama or making endorsement in regard to date in the prescribed format, Appellant could be provided an opportunity in terms of mandate of proviso under Section 9 (5) IBC."
The NCLAT thus observed that the adjudicating authority failed to provide an opportunity to rectify the defect.
Case Details
Before: NCLAT
Case Title: Silvassa Cement Products Ltd. vs. Noor India Buildcon
Coram: Hon’ble Justice Bansi Lat Bhat
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