2024 (11) TMI 728 - AT - IBC

Tenability of Affidavit of Rejoinder filed by the Financial Creditor - HELD THAT - Along with the Rejoinder documents which were sought to be filed by the Financial Creditor were financial statement of the Corporate Debtor and OTS related documents. There are no reason to interfere with the order by which above documents has been accepted on record. The mere fact that the said documents were not referred to in the Section 7 application cannot disentitle the Financial Creditor to bring on record the said documents when plea was raised in the Reply by the Corporate Debtor that application is barred by time. The power of the Court to accept the rejoinder and document is not being questioned. When the issue of limitation is raised, it is duty of the Court to decide the question of limitation even if no defence is raised and for deciding the question of limitation party are at liberty to file relevant documents. When the Corporate Debtor questioned the application as barred by time, it was open for the Financial Creditor to bring on record the relevant documents claiming acknowledgment of the Corporate Debtor. There are no error in the order of the Adjudicating Authority accepting Rejoinder on record - appeal dismissed.

Summary

Issues:
1. Tenability of Affidavit of Rejoinder filed by Financial Creditor challenged by Corporate Debtor.
2. Acceptance of Rejoinder and documents by the Adjudicating Authority.
3. Argument regarding the timing of introducing documents by the Financial Creditor.
4. Interpretation of rules regarding submission of Rejoinder.
5. Consideration of relevant documents in the case.
6. Admissibility of documents not referred to in the original application.
7. Legal principles governing acceptance of Rejoinder and additional documents.
8. Decision on the issue of limitation raised by the Corporate Debtor.

Analysis:
The judgment pertains to an appeal filed against the rejection of an Interlocutory Application (I.A.) by the Adjudicating Authority, where the Corporate Debtor challenged the tenability of the Affidavit of Rejoinder filed by the Financial Creditor. The Adjudicating Authority had accepted the Rejoinder and related documents, prompting the Corporate Debtor to file an appeal against this decision. The Appellant argued that the Financial Creditor introduced documents not referred to in the original application, questioning the acceptance of the Rejoinder. The Respondent contended that the Section 7 application had already been heard and reserved for orders, and the appeal was filed at a later stage.

The Adjudicating Authority, in its order, acknowledged the documents brought on record through the Rejoinder, including financial statements of the Corporate Debtor and OTS related documents. It noted that the NCLT Rules allow the submission of a Rejoinder with the Court's leave, even if not prior in time. The judgment emphasized that the documents in question did not prejudice the Corporate Debtor, as they were related to the Corporate Debtor and known to them. Therefore, the Court granted leave and accepted the Rejoinder. The Appellate Tribunal found no reason to interfere with this decision, stating that the timing of introducing documents did not disentitle the Financial Creditor from submitting them, especially when the Corporate Debtor raised the issue of limitation in their Reply.

Regarding the Appellant's reliance on a previous judgment of the Tribunal, the judgment clarified that the Court has the power to accept a Rejoinder and additional documents with the leave of the Court, especially when necessary for a just decision. It highlighted that when the issue of limitation is raised, parties are allowed to file relevant documents to address the matter. In this case, since the Corporate Debtor questioned the application as time-barred, the Financial Creditor had the right to submit relevant documents to support their position. Ultimately, the Appellate Tribunal found no error in the Adjudicating Authority's decision to accept the Rejoinder and dismissed the appeal.