NCLAT Chennai Sets Aside NCLT Kochi Order Archiving Section 9 Plea, Grants One-Time Rectification Window

On 10 June, the Chennai Bench of the National Company Law Appellate Tribunal (NCLAT) allowed an appeal filed by Raychem RPG Pvt Ltd, set aside the order of the National Company Law Tribunal (NCLT), Kochi Bench, and directed grant of a final opportunity to rectify defects, subject to payment of costs of Rs. 50,000.

Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain emphasised that procedural defects in filing a Section 9 insolvency petition cannot, by themselves, deprive an operational creditor of access to judicial remedies, while reiterating that such defects must nevertheless be cured within strict timelines under the Insolvency and Bankruptcy Code, 2016. The Bench held:

“…we cannot be ignorant of the fact that in the midst of these procedural complications of filing/re-filing/non-refiling of the Company Petition whatsoever misconduct, with which the Appellant might be blamed with, he cannot be deprived to have his recourse to the judicial remedies by returning of the Company Petition on the ground of non-rectification of the defects by invoking the provisions contained under Rule 28(4) of the NCLT Rules, 2016.”

Raychem RPG Pvt Ltd had challenged the Registrar's decision of the NCLT to archive its Section 9 application filed against Soura Natural Energy Solutions India Pvt Ltd. The operational creditor had originally filed the application on 13 December 2024.

The Registry pointed out defects, including absence of a proper verifying affidavit in Form NCLT-6 and incorrect formatting in Form No. 5. Despite repeated communications and opportunities for re-filing, the defects were not cured. Consequently, the Registrar exercised powers under Rule 28(4) of the NCLT Rules, 2016 and archived the petition on 31 October 2025.

Raychem RPG's appeal under Rule 63 was dismissed by the NCLT Kochi Bench on 21 January 2026. The Tribunal held that the appellant lacked diligence and was attempting to misuse insolvency proceedings to exert pressure on the respondent, and imposed costs of Rs. 50,000.

Before the Tribunal, the company contended that defect notices were not received by its earlier counsel and that delays occurred due to professional constraints and a change in vakalatnama. It submitted that new counsel discovered the dismissal at a later stage, resulting in delayed filing of the appeal.

The Bench noted that the petition had remained defective for over a year despite multiple opportunities granted to the appellant. It held that while the Registrar had correctly invoked Rule 28(4), procedural lapses should not result in denial of access to justice. It further observed that insolvency proceedings are time-bound and require diligence, but the appellant deserved one final opportunity to cure defects.

Further, the Tribunal directed Raychem RPG Pvt Ltd to rectify all defects within seven days of the upload of the order, failing which the petition would stand dismissed under Rule 28(4). It upheld the cost of Rs. 50,000 and made its payment a precondition for rectification.

Accordingly, the NCLAT accordingly set aside the impugned order and allowed the appeal.

For Appellants: Advocates Ahsan Allana and Yohaan Limathwalla