Corporate Debtor's Plea to Reject Rejoinder Introducing Fresh Documents Dismissed; Tribunal Grants Opportunity to File Sur-Rejoinder to Ensure Natural Justice
In a significant ruling dated 10th September 2026, the National Company Law Tribunal (Chandigarh Bench) addressed a procedural challenge concerning the admissibility of a rejoinder filed in insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC). The case, Bhagwati Lacto Vegetarian Exports Pvt. Ltd. v. RB Assets And Developers Pvt. Ltd., involved the Corporate Debtor's application to reject a rejoinder filed by the Petitioner, which included additional documents and explanations to supplement the original petition.
The Corporate Debtor, RB Assets And Developers Pvt. Ltd., argued that the rejoinder should be rejected as it introduced fresh annexures such as revised ledger accounts, TDS entries, bank statements, and explanations relating to a payment of Rs. 11,00,000/-, which were not part of the original petition. The Corporate Debtor contended that these inclusions were essentially an attempt to rectify defects in the original petition and thus violated established principles under the Code of Civil Procedure (CPC) regarding replication and pleadings.
However, the Tribunal, comprising Mr. Khetrabasi Biswal (Member Judicial) and Mr. Shishir Agarwal (Member Technical), rejected this contention. It was observed that the objections raised by the Corporate Debtor pertained to the evidentiary value and effect of the material placed on record, which were matters more appropriately considered at the final hearing and adjudication stage of the company petition. The Tribunal clarified that insolvency proceedings under the IBC are not governed by the CPC's framework of pleadings. Instead, Rule 11 of the National Company Law Tribunal Rules, 2016 empowers the Tribunal with broad discretion to pass such orders as necessary to meet the ends of justice.
The Tribunal further noted that the rejoinder had already been taken on record by an earlier order dated 25th March 2025, and the current application amounted to a request for reconsideration without any apparent error or exceptional circumstance warranting such action. Importantly, the additional documents introduced through the rejoinder were directly related to the core issues of debt and default, which are central to the insolvency proceedings.
To balance the interests of justice and avoid prejudice to the Corporate Debtor, the Tribunal granted the Corporate Debtor two weeks to file a sur-rejoinder or reply to the rejoinder in the main petition. This provision ensures that the Corporate Debtor is given a fair opportunity to respond to the new materials and explanations introduced.
This judgment underscores the NCLT's approach of prioritizing substantive justice and fair adjudication over rigid procedural technicalities in insolvency proceedings. It also clarifies that while principles of civil procedure may guide certain aspects, the IBC framework and NCLT Rules provide the Tribunal with the flexibility to ensure equitable outcomes.
Legal experts view this ruling as a reaffirmation of the NCLT's mandate to facilitate effective resolution of insolvency cases by allowing adequate opportunity for all parties to present their case fully, including the consideration of supplementary evidence and explanations introduced during the course of proceedings.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Rejoinder filed in IBC proceedings cannot be rejected merely on the ground that it introduces further explanations and supporting documents to answer objections raised in reply - NCLT is not bound by the CPC pleading framework relating to replication - Objections as to evidentiary value and effect of such documents are to be considered at final adjudication - Corporate Debtor granted liberty to file sur-rejoinder to avoid prejudice.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Section 60(5), National Company Law Tribunal Rules, 2016 Rule 11, Code of Civil Procedure, 1908 (referenced)
