Dunzo Digital Pvt. Ltd. Vs Velvin Packaging Solutions Pvt. Ltd. (NCLAT Chennai)
In the case Dunzo Digital Pvt. Ltd. Vs. Velvin Packaging Solutions Pvt. Ltd. (NCLAT Chennai), the appellant appealed under Section 61 of the Insolvency and Bankruptcy Code (I&B Code) against the orders passed by the NCLT. The issue arose when the appellant was denied the opportunity to file objections in response to the Section 9 application of the respondent, due to non-compliance with previous orders and the failure to reach a settlement. The NCLT, on 31.07.2024, had granted the appellant time to file objections, failing which their right to contest the Section 9 application was to be forfeited. However, the appellant did not comply within the prescribed time. Subsequently, the appellant filed a recall application, which was rejected by the NCLT on 04.09.2024.
The appellant argued that the rejection of the recall application was unjust as their contentions were not considered and they were deprived of a fair opportunity to file objections to the Section 9 application. The appellant cited the principle of natural justice, asserting that they should not be denied the opportunity to contest the proceedings merely because of a procedural failure. The NCLAT, in this case, agreed with the appellant’s arguments, stating that strict adherence to procedural timelines under the Civil Procedure Code (CPC) should not apply rigidly to proceedings under the I&B Code. The NCLAT ruled that the appellant should be granted a final opportunity to file objections within two weeks from the date of receipt of the certified copy of the judgment. Failure to comply within this period would lead to the proceedings continuing ex parte against the appellant. The appeal was thus allowed, and the impugned orders were quashed.
