No Artificial Procedural Obstacle Can Prevent Filing Of Additional Affidavit In CIRP Proceedings: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently held that a party cannot be prevented from filing an additional affidavit in proceedings that are yet to be decided on merits.

It observed that such a restriction would create an "artificial procedural obstacle" and handicap a litigant in presenting its case.

A bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Indevar Pandey observed,

“We are of the view that no artificial procedural obstacle could be placed to handicap a person in a judicial proceedings, to refrain from placing its evidence in shape of additional affidavit in a proceedings, which was yet to be considered on merits, after providing an opportunity of rebuttal to the respondent, in the light of the provisions contained under Sub-Rule (4) of Rule 40 of the NCLT Rules, 2016.”

The case arose after Vinod Anand, a financial creditor, challenged an order of the National Company Law Tribunal (NCLT) refusing to allow him to place an additional affidavit on record in his insolvency proceedings against Golden Rolls Pvt. Ltd. The request was made after his insolvency application had been remanded for fresh consideration.

Anand claimed to have advanced a loan of about ₹2.29 crore to Golden Rolls carrying interest at 9% compounded annually. Alleging misuse of the funds, he initiated insolvency proceedings. He had also filed separate petitions alleging oppression and mismanagement under the Companies Act.

On October 9, 2025, the NCLT dismissed the insolvency application after relying on its findings in the oppression and mismanagement proceedings. It held that since no acts of oppression or mismanagement had been established, the insolvency application did not survive.

The appellate tribunal later set aside that decision and directed the NCLT to revive the matter. It also ordered that the application be heard afresh. After the remand, Anand sought permission to file an additional affidavit. The NCLT rejected the request, citing his earlier failure to file rejoinders despite directions issued before the remand.

The NCLAT held that the earlier dismissal of the insolvency application was not based on an examination of the Section 7 proceedings on their own merits. Instead, it rested on reasoning borrowed from the company law proceedings. The appellate tribunal ruled that once the matter was revived and directed to be heard afresh, it had to be considered from the inception of the proceedings.

The bench observed, “But once the Appellate Tribunal has used the words, 'revival' and 'afresh' that, means that it has to be taken up from the stage of infancies of the proceedings.”

The appellate tribunal further held that interlocutory orders passed before the remand merged with the final order dismissing the insolvency application. They lost their significance once that order was set aside. Consequently, the NCLT could not rely on the earlier non-filing of rejoinders to deny permission to file an additional affidavit.

It also held that Rule 55 of the NCLT Rules, 2016, which governs pleadings after the filing of a reply, is directory rather than mandatory. The provision does not bar the tribunal from permitting additional pleadings where appropriate.

Allowing the appeal, the NCLAT directed the NCLT to take the additional affidavit on record. It clarified that the respondent would have an opportunity to file a rebuttal before the insolvency application is decided on its merits.