Case Law Details
BPL Limited Vs National Company Law Tribunal (Kerala High Court)
The Kerala High Court allowed a writ petition filed by the corporate debtor challenging an order of the National Company Law Tribunal (NCLT), Kochi Bench, which had declined permission to file additional objections in proceedings initiated under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC).
The petitioner company had allegedly availed credit facilities from the second respondent, which subsequently initiated insolvency proceedings under Section 7 of the IBC before the NCLT. The petitioner entered appearance before the Tribunal on 17 April 2026 and was granted 96 hours to file its objections. It filed its reply on 20 April 2026, and the matter was initially considered by a single member before being placed before a Division Bench pursuant to an administrative order.
Thereafter, on 6 May 2026, the petitioner filed an application under Rules 11 and 55 of the National Company Law Tribunal Rules, 2016, seeking permission to place additional objections and supporting documents on record. By order dated 4 June 2026, the NCLT rejected the request, observing that neither the IBC nor the NCLT Rules contained any provision permitting additional objections after filing of the original reply. The Tribunal also observed that the documents sought to be produced were already within the petitioner’s knowledge and possession when the original objections were filed. However, to ensure fair adjudication, the Tribunal permitted the additional documents to be relied upon only to the limited extent that they supported the pleadings already contained in the original objections, subject to payment of ₹2,500 per document into the National Defence Fund.
Aggrieved by this order, the petitioner approached the Kerala High Court. On 5 June 2026, the High Court stayed further proceedings in the Section 7 application after noting the contention that the Tribunal had incorrectly held there was no provision in the Rules permitting additional objections.
The second respondent opposed the writ petition, contending that the Tribunal had exercised its discretionary powers under Rule 55 of the NCLT Rules and that such discretion was not liable to judicial review under Article 226 of the Constitution. It was also argued that the petitioner had an alternative statutory remedy under Section 61 of the IBC before the National Company Law Appellate Tribunal.
The petitioner submitted that immediately after rejecting the application for additional objections, the NCLT had listed the Section 7 petition for hearing on the very next day, leaving no practical opportunity to challenge the order through the appellate mechanism. It was further contended that the Tribunal’s reasoning was internally inconsistent because, after holding that there was no provision permitting additional objections, it nevertheless allowed the accompanying documents to be relied upon to a limited extent.
The High Court found merit in the petitioner’s submissions. It observed that Rule 55 of the NCLT Rules expressly provides that pleadings subsequent to the reply may be presented with the leave of the Tribunal upon such terms as it considers appropriate. Therefore, the Tribunal’s observation that there was no provision under the Rules permitting additional pleadings was incorrect.
The Court also noted that the petitioner had been granted only 96 hours to file its original objections and had complied with that timeline. It accepted the petitioner’s explanation that the limited time available necessitated filing additional objections and documents subsequently. According to the Court, Rule 55, read together with the Tribunal’s inherent powers under Rule 11, empowered the NCLT to entertain such additional pleadings.
The High Court further observed that the Tribunal’s order was contradictory because, despite stating that no provision existed for entertaining additional objections, it ultimately permitted reliance on the additional documents, albeit for a limited purpose.
Referring to the Supreme Court’s decision in Dena Bank v. Shivakumar Reddy [(2021) 10 SCC 330], the High Court noted that there is no legal prohibition against amendment of pleadings or filing additional documents in proceedings under Section 7 of the IBC. It held that the same principle should equally apply to objections filed by respondents in such proceedings.
The Court also relied on the decision of the Supreme Court in Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited [(2021) 9 SCC 657], observing that the petitioner was justified in invoking the writ jurisdiction where principles of natural justice were alleged to have been violated.
Holding that the petitioner had furnished sufficient reasons for seeking to file additional objections and documents, the High Court concluded that the NCLT ought to have permitted the same. It accordingly set aside the impugned order, allowed the writ petition, and declared that the additional objections and supporting documents filed by the petitioner should be considered by the Tribunal while deciding the pending Section 7 application.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner is a company registered under the Companies Act, 1956. The petitioner had allegedly obtained some credit facilities from the 2nd respondent herein. The 2nd respondent initiated Section 7 proceedings (Ext.P3) under the Insolvency and Bankruptcy Code, 2016 (for short “IBC”) before the 1st respondent herein. The petitioner herein entered appearance before the 1st respondent on 17.04.2026. It was granted 96 hours to file its objections. Admittedly, the petitioner filed its statement of objections on 20.04.2026. The matter was also considered as seen from Ext.P2D on 27.04.2026 by a single member of the Tribunal. However, pursuant to the directions contained in Ext.P6 order dated 27.04.2026, insofar as Ext.P3 also fell within the ambit of Ext.P6 and the stipulations contained therein, the matter was posted before a Division Bench and heard for two days.
2. Later, the petitioner herein submitted Ext.P7 on 06.05.2026 with reference to the provisions under Rule 11 and Rule 55 of the National Company Law Tribunal Rules, 2016 (for short ‘Rules’) seeking to entertain certain additional objections along with certain documents produced with the objections. By the impugned order at Ext.P1 dated 04.06.2026 the Tribunal found as under:-
“Therefore, we find no merits to grant any such liberty to file additional objections, particularly when there are no provisions under the Code or the NCLT Rules, 2016 to entertain additional objections. The excuse made by the Corporate Debtor to entertain additional objections is otherwise not tenable. All the documents annexed with the additional objections were in the possession and knowledge of the Corporate Debtor at the time of filing the reply affidavit. Ideally, no such documents can be taken on record.
However, to maintain balance and ensure fair adjudication of the matter in dispute, the documents annexed with the additional objections can be entertained to a limited extent, insofar as they support the pleadings already made in the objections filed on 20.04.2026, subject to the payment of a cost of Rs.2,500/- per document into the National Defence Fund. The Corporate Debtor shall file a compliance memo to this effect. Accordingly, the documents will be read at the time of hearing on admission, subject to the limitations set out above.”
(Underlining supplied)
It is seeking to challenge the afore order at Ext.P1 that the petitioner has filed the captioned writ petition.
3. On 05.06.2026, taking note of the contentions raised, especially with respect to the findings in Ext.P1 that there are no provisions under the Rules for entertaining additional objections, this Court had stayed all further proceedings pursuant to Ext.P3.
4. The 2ndrespondent entered appearance and has also filed I.A. No.1 of 2026, seeking to vacate the interim order granted as above.
5. I have heard Sri. Joseph Kodianthara, the learned Senior Counsel instructed by Sri. Cyriac Tom, the learned counsel for the petitioner, Smt. Gayathri Krishnan, the learned Central Government Counsel for the 1strespondent herein as well as Sri. Anil Nair, the learned Senior Counsel instructed by Sri. S. Sujin, the learned counsel for the 2nd
6. The short issue arising for consideration in this writ petition is as to whether the finding contained in Ext.P1 requires to be sustained or not. According to Sri. Nair, the learned Senior Counsel for the 2ndrespondent herein, this Court need not interfere with the impugned order for more than one reason. According to him, the Tribunal having exercised their power/discretion under the provisions of Rule 55 of the Rules, that is not subject to any judicial review under Article 226 of the Constitution of India. Furthermore, he would state that the petitioner has a remedy under the provisions of Section 61 of the IBC and hence, it is for the petitioner to challenge the same before the Appellate Tribunal.
7. Per contra, Sri. Kodianthara, learned Senior Counsel would point out that the petitioner had to rush to this Court for the reason that simultaneous with the rejection of the application at Ext.P7 on 04.06.2026 (Ext.P1), the NCLT proceeded to post the matter for consideration on the very next day itself (05.06.2026). Sri. Kodianthara would further point out that the main reason stated for rejecting Ext.P7, was the lack of relevant provisions under the Rules for consideration of the afore application. He would also point out to the inconsistency as regards the ultimate finding in Ext.P1 whereby the NCLT has permitted the petitioner to rely on the additional documents produced along with Ext.P6, however, to a limited extent, with reference to the original objection filed.
8. I have considered the rival submissions as well as the connected records.
9. I find much force in the contention raised by Sri.Kodianthara since as rightly pointed out by him simultaneous with the rejection of Ext.P7, the NCLT has posted the matter on the very next day for hearing.
10. Furthermore, the question to be considered is as to whether the ultimate rejection of Ext.P7 pursuant to Ext.P1 requires to be sustained or not.
11. The Tribunal in Ext.P1, as noticed earlier, has mainly pointed out the lack of relevant provisions under the Rules for entertaining the additional objections. Rule 55 of the Rules specifically provides as under:
“No pleadings, subsequent to the reply, shall be presented except by the leave of the Tribunal upon such terms as the Tribunal may think fit.”
Thus, the NCLT has every power and authority to accept the subsequent pleadings, presented after the original reply is filed after granting leave for presentation of those objections, upon such terms as the Tribunal deems fit.
12. In the case at hand, this Court notices that the petitioner entered appearance on 17.04.2026 and was only provided 96 hours for presenting the reply, which was also complied by the petitioner. The petitioner states that it is on account of the afore, it subsequently required to produce additional documents/objections as seen from Ext.P7. In my opinion, under Rule 55 read with the inherent power under Rule 11 of the Rules, the NCLT ought to have entertained the objections/additional documents. This Court further notices that in the order at Ext.P1, after holding that there are no provisions under Rules, ultimately the petitioner is permitted to rely on the additional documents, however to a limited extent.
13. In my opinion, the afore observations contained in Ext.P1 need not be sustained. This is especially so, since the petitioner has given sufficient reasons for presenting additional objections as seen from Ext.P7. The Apex Court in Dena Bank v. Shivakumar Reddy [(2021) 10 SCC 330] has also held that there is no bar in law to the amendment of the pleadings in an application under Section 7 of the IBC or to the filing of additional documents. The same yardstick requires to be applied with respect to the objections filed by the respondents in the proceedings also.
14. Again, as held by the Apex Court in Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited and Ors. [(2021) 9 SCC 657], the petitioner is justified in challenging Ext.P1, when there is a violation of natural justice. In such circumstances, especially since the petitioner only sought for an amendment of the objections filed, for raising additional objections, I am of the opinion that the Tribunal ought to have accepted the same.
Resultantly, I am of the opinion that the petitioner is entitled to succeed. Hence, this writ petition would stand allowed, setting aside Ext.P1. It is declared that the objections/additional documents raised by the petitioner in Ext.P7 requires to be considered by the Tribunal, while considering Ext.P3.
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