GENERAL PROCEDURE TO BE FOLLOWED IN A CASE BEFORE ‘NCLT’

[Mr. M. GOVINDARAJAN]

Part III of the NCLT Rules, 2016 provides the procedure of Institution of proceedings, petition, appeals etc., which has already been discussed in my earlier article.  Part IV of the Rules provides the general procedure to be followed in  a case before  NCLT.  Part VIII of the Rules provides the special procedure.   In this article the provisions relating to general procedures are discussed in detail.

Petition/application

Rule 34(3) provides that every petition or application or reference shall be filed in Form No. NCLT 1 with attachments thereto accompanied by Form No. NCLT No. 2 which is nothing but, the notice of admission.  In case of interlocutory application, the same shall be filed in Form No. NCLT 1 accompanied by such documents thereto along with Form No. NCLT 3, which is nothing but notice of motion.

Affidavit

Rule 34(4) provides that every petition or application including interlocutory application shall be verified in an affidavit in Form No. NCLT 6.  The notice to be issued by the Tribunal to the opposite party shall be in Form No. NCLT 5.

Advertisement

Rule 35(1) provides that where any application, petition or reference is required to be advertised, unless otherwise ordered by the Tribunal, the petition shall be in  Form No. NCLT – 3A.  The advertisement is to be issued not less than 14 days before the date fixed for hearing, at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situate and at least once in English language in English newspaper circulating in that district.

Rule 35(2) provides that every advertisement shall state-

• the date on which the application, petition or reference was presented;
• the name and address of the applicant, petition and his authorized representative, if any;
• the nature and substance of application, petition or reference;
• the date fixed for hearing;
• a statement to the effect that any person whose interest is likely to be affected by the proposed petition or who intends either to oppose or support the petition or reference tat the hearing shall send a notice of his intention to the concerned Bench and the petition or his authorized representative, if any, indicating the nature of interest and grounds of opposition so as to reach him not later than two days previous to the day fixed for hearing.

After publishing the advertisement the copy of the same may be placed on the website of the company, if any.

Rule 35(4) provides that an affidavit shall be filed to the Tribunal, not less than 3 days before the date fixed for hearing, indicating whether the petition has been advertised in  accordance with the rules and whether the notices, if any, have been duly served upon the persons required to be served.  The affidavit shall be accompanied with such proof of advertisement or of the service. 

If the requirements of the Rules or the directions of the Tribunal, in respect of advertisement and service of petition, have not been complied with, the Tribunal may either dismiss the petition or give such further directions as it thinks fit.

Rule 35(6) provides that the Tribunal may dispense with any advertisement, if it thinks fit, upon an application being made by the party.

Notice to opposite party

Rule 37 (1) provides that the Tribunal shall issue notice to the respondent to show cause against the application or petition on a date of  hearing indicated in the notice in Form No. NCLT 5 which has been attached with by the applicant at the time of filing of petition.  The notice shall be accompanied by a copy of the application with supporting documents. 

Service of notices and processes

Rule 38 (1) provides that any notice or process to be issued by the Tribunal may be served by post or at the e-mail address as provided in the petition or application or in the reply. 

Rule 38(2) provides that the notice or process if to be served physically may be served in any one of the following methods as directed by the Tribunal-

• by hand delivery through a process server or respective authorized representative;
• by registered post or speed post with acknowledgement due; or
• service by the party himself.

Rule 38(3) provides if the notice is served by the party himself by hand delivery, he shall file with the Registrar or such person duly authorized by the Registrar in this behalf, the acknowledgement together with an affidavit of service.   In case of service by registered post or by speed post, he shall file with the Registrar or his authorized person an affidavit of service of notice along with the proof of delivery.

Rule 38(4) provides that  if the notice could not be served, the Tribunal may direct that notice of the petition or application shall be served upon the respondents in any other manner, including any manner of substituted service, as it appears to the Tribunal just and convenient.  The petitioner or applicant shall deposit with the registry of the Tribunal such amount of charges as may be determined by the Tribunal, but not exceeding the actual charges incurred in effecting the service.

Rule 38(5) provides that the notice or process is served on the authorized representative, such service shall b e deemed to be a proper service.

Ex-parte order

Rule 37(2) provides if the respondent does not appear on the date of hearing the Tribunal after according reasonable opportunity to the respondent, shall forthwith proceed ex-part to dispose of the application.

Contest by respondent

Rule 37(3) provides that if the respondent contests to the notice, it may either in person or through an authorized representative, file a reply accompanied with an affidavit and along with copies of such documents on which it relies, with an advance service to the petition to the Registry before the date of hearing.  Such reply and copies of documents shall form part of the record.

Evidence by Affidavit

Rule 39 provides that the Tribunal may direct the parties to give evidence, if any, by affidavit.  The affidavit to be filed before the Tribunal shall be in Form No. NCLT 7.  The Tribunal, if it considers necessary in the interest of natural justice, may order for cross examination of any deponent on the points of conflict either through information and communication technology such as video conferencing or otherwise as may be decided by the Tribunal, on an application moved by any party.

Additional Evidence

The parties to the proceedings shall not be entitled to produce before the Bench additional evidence, either oral or documentary, which was in possession or knowledge but was not provided before the Inspector during investigation.  If the Bench requires any additional evidence or document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial clause, the Bench may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be produced, after recording reasons.

The said document may be produced or such witness may be examined or such evidence may be adduced either before the Bench or before such authority as the Bench may direct.  On the directions of the Bench, the concerned shall comply with the directions of the Bench.  The concerned authority shall send the document, the record of the deposition of the witness or the record of the evidence adduced to the Bench.  Additional evidence or document shall be given to the other party and shall be afforded an opportunity to rebut the contentions of the said additional evidence.

Filing Reply

Rule 41 provides that the respondent may file his reply and copies of documents, either in person or through an authorized representative, with the Registry as specified by the Tribunal.  A copy of the reply along with the copies of document shall be served on the applicant by the respondent.   In the reply the respondent shall specifically admit, deny or rebut the facts stated by the applicant in his petition or application and state such additional facts as may be found necessary in his reply.’

Filing of rejoinder

Rule 42 provides that where the respondent states such additional facts as may be necessary for the just decision of the case, the Bench may allow the petition to file a rejoinder to the reply filed by the respondent, with an advance copy to be served upon the respondent.

Power of the Bench

Rule 43 gives powers to the Bench to call for further information or evidence.  The Bench may require the parties to produce such further documentary or other evidence, as it may consider necessary for the purpose of satisfying itself as to the truth of the allegations made in the petition or application; or for ascertaining any information which is necessary for the purpose of enabling the Bench to pass orders in the petition or application.

The Bench may admit such documentary and other mode of recordings in electronic form as may be legally permitted as admissible as evidence under the relevant laws. 

Hearing

The Tribunal shall notify to the parties the date and place of hearing of the petition or application.    Every party may appear before a Tribunal in person or through an authorized representative.  The Authorized representative shall make an appearance through the filing of Vakalatnama or Memorandum of appearance in Form No. NCLT 12.   There shall be no audio or video recording of the proceedings by the parties or their authorized representatives.

Where the applicant does not appear in the hearing, the Tribunal may, in its discretion, either dismiss the application for default or hear and decide it on merits.  The applicant, within 30 days from the dismissal, satisfies the Tribunal that there was sufficient cause for his non appearance, the Tribunal may restore the application.  If the case is disposed on merits the decision shall not be re-opened. 

Where the respondent does not appear on hearing the Tribunal may adjourn the hearing or hear and decide the petition or the application ex-parte.  The respondent may apply to the Tribunal for an order to set it aside.  If the Tribunal is satisfied that the respondent was prevented by any sufficient cause from appearing for hearing, the Tribunal may make an order setting aside the ex-parte hearing as against him such terms as it thinks fit.   The ex-parte decision cannot be set aside as against one respondent only, it may be set aside as against all or any of the other respondents also. 

Substitution of legal representatives

Rule 53 provides that in the case of death of a party during the pendency of the proceedings before the Tribunal, the legal representative of the deceased party may apply within 90 days of the date of such death for being brought on record.  If no petition is received from the legal representatives the proceedings shall abate.   However the Tribunal may allow substitution of the legal representatives of the deceased at any time before disposing the petition on merits.

Pleadings

Rule 55 provides that 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.

Order copy

Rule 50 provides that the Registry shall send a certified copy of final order passed to the parties concerned free of cost and the certified copies may be made available with cost of ₹ 5/- per page.

Power to regulate the procedure

Rule 51 provides that the Tribunal may regulate its own procedure in accordance with the rules of natural justice and equity, for the purpose of discharging its functions under the Act.