Tribunal emphasizes adherence to IBC timelines, rejects repeated pleas citing non-receipt of documents and settlement talks as insufficient grounds for relief
In a significant ruling dated September 10, 2026, the National Company Law Tribunal (NCLT), Guwahati Bench, has dismissed the interlocutory application filed by J.U.D. Cements Limited seeking to recall an earlier order which had forfeited its right to file a reply/counter in a Section 7 Company Petition filed against it by Catalyst Trusteeship Limited. The order reiterates the importance of strict adherence to procedural timelines under the Insolvency and Bankruptcy Code, 2016 (IBC) and underscores that procedural requirements and their consequences cannot be applied mechanically, but must be balanced against the need for timely resolution.
The underlying dispute concerns a financial debt amounting to Rs. 196.69 crores allegedly owed by J.U.D. Cements to Catalyst Trusteeship. Catalyst initiated insolvency proceedings under Section 7 of the IBC on May 29, 2026. Despite multiple opportunities granted by the Tribunal, J.U.D. Cements repeatedly failed to file its reply/counter within the timelines stipulated by the Tribunal, prompting the forfeiture of its right to file such pleadings.
J.U.D. Cements contended that its failure to file a reply was due to Catalyst's non-supply of critical documents necessary to prepare a comprehensive defence and also cited ongoing settlement discussions between the parties. The applicant asserted that it acted bona fide and had made diligent efforts to obtain the documents but was denied access, which caused the delay.
The Tribunal, however, observed that these grounds had already been examined and rejected in an earlier order dated August 10, 2026, where the Tribunal had held that non-supply of documents and alleged settlement talks did not constitute sufficient cause to recall the order forfeiting the right to file reply. The Tribunal noted that adequate opportunities had been afforded to J.U.D. Cements, including a final opportunity to file its reply by August 4, 2026, which the applicant did not utilize.
The Bench emphasized that the principles of natural justice were not violated as the applicant was given ample chances to place its defence on record. It further noted that the procedural timelines prescribed under the IBC are critical to avoid undue delay in the insolvency resolution process. The Tribunal also expressed concern that the present application appeared to be a last-minute attempt to revisit issues that had been conclusively dealt with earlier.
Accordingly, the Tribunal dismissed the application and upheld the forfeiture of J.U.D. Cements' right to file a reply/counter. The main Company Petition and pending interlocutory applications were listed for further hearing on September 17, 2026.
This ruling reinforces the judiciary's stance on expeditious resolution of insolvency proceedings under the IBC and sends a clear message that litigants must comply with procedural timelines and cannot rely on repetitive pleas to delay proceedings.
Bottom Line:
Insolvency and Bankruptcy Code - Filing of reply/counter by the Corporate Debtor - Repeated failure to file the reply despite sufficient opportunities - Procedural requirements and consequences cannot be applied mechanically where grave injustice may result - Tribunal dismisses application seeking recall of order forfeiting the Corporate Debtor's right to file reply/counter.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 - Section 7, Section 60(5); National Company Law Tribunal Rules, 2016 - Rule 11
