Recurring Opportunity Cannot Be Granted to Rectify Defect in Appeal Against NCLT Order: NCLAT
In a notable legal development, the National Company Law Appellate Tribunal (NCLAT) has ruled that appellants cannot expect recurring opportunities to rectify defects in an appeal filed against an order by the National Company Law Tribunal (NCLT). The judgment reinforces procedural discipline in the appellate process under the Insolvency and Bankruptcy Code (IBC).
Case Summary
The case involved an appeal against an NCLT order where the appellant failed to correct procedural defects within the stipulated time. Despite being given time, the appellant sought further extension. The NCLAT, however, held that:
“The opportunity to cure defects is not indefinite or recurring. The judicial process demands timely compliance.”
The tribunal dismissed the appeal, citing non-compliance with prescribed procedural timelines under the NCLAT Rules and relevant provisions of the IBC.
Key Takeaways from the Order
Strict Adherence to Procedure:
Appeals filed before the NCLAT must comply with format and documentation norms. Failure to correct defects in time can lead to dismissal without further notice.
Judicial Discipline in IBC Framework:
The NCLAT emphasized that relaxed procedural norms cannot override legal finality, especially in time-bound insolvency matters.
Limited Scope for Discretion:
The tribunal reiterated that recurring leniency in defect correction could disrupt the insolvency resolution timeline, contrary to the intent of the IBC.
Implications of the Ruling
Advocates and parties must ensure that appeals meet all filing criteria at the outset.
Law firms handling IBC matters should review internal audit and compliance timelines to avoid procedural lapses.
The judgment serves as a precedent cautioning against habitual non-compliance or procedural laxity in appeals.
Provisions Referenced
NCLAT Rules, 2016 – Pertaining to defects and timelines for rectification
IBC, 2016 – Emphasis on time-bound resolution mechanisms
Case Law: [Details of parties withheld for editorial brevity; insert if publishing with full case citation]
FAQ: NCLAT Ruling on Appeal Defect Rectification
What does the NCLAT judgment say about defect correction?
It states that only limited opportunities are provided to cure defects in appeals, and repeated or recurring chances will not be entertained.
What happens if defects are not corrected in time?
If the defects are not cured within the allowed period, the appeal is liable to be dismissed without further hearing.
Can appellants request an extension beyond the allowed time?
Only in exceptional cases, and with proper justification. NCLAT retains discretion but is not obligated to extend timelines repeatedly.
Why is this significant under the IBC?
Because the Insolvency and Bankruptcy Code is time-bound, delays caused by procedural leniency may undermine the resolution process.
How should legal representatives prepare appeals under NCLAT?
Pre-file compliance checks
Immediate rectification of defects (if notified)
Ensure all mandatory documents, formats, and affidavits are in place
Published on: June 25, 2025
Uploaded by: Pankaj
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