The NCLAT decided on the position of non-maintainability of an application compared to its completeness. In the present case, the Adjudicating Authority (NCLT, Ahmedabad Bench) dismissed an operational creditor's request for the initiation of CIRP against the Respondent – Corporate Debtor under Section 9 of the IBC on the grounds of non-maintainability, which relates to the omission of signatures on the application in the prescribed format in Form 5 and the same being notarized. The Appellant claimed that the AA broke the law by failing to provide a chance to correct the fault.
It was specifically stated in the judgment that:
"Dismissal of application as being non-maintainable for such technical defect is not warranted."
In the instant case titled Silvassa Cement Products Pvt. Ltd. Vs. Noor India Buildcon Pvt. Ltd. the issue raised before the NCLAT for clarification was:
Whether the Order of the adjudication authority reasonable?
With regard to this issue, the NCLAT noted that the Adjudicating Authority has taken note of the Board Resolution dated September 28, 2018, permitting Mr Praveen Kumar B. Mundra, Manager, to file legal proceedings, including those under the I&B Code. There was hardly any justification on this score for holding that the application was non-maintainable once the filing of the application under Section 9 was backed by the Board Resolution and the Adjudicating Authority had noticed that two Advocates, Mr Niraj Shah and Mr Dhruv K. Dave, had signed the petition, albeit without recording date. Non-maintainability differs from incompleteness in that the latter has broader bounds. If there was a mistake in filing the Vakalatnama or making the date endorsement in the appropriate format, the Appellant could be given a chance under the mandate of proviso under Section 9(5) of the I&B Code.
The Court categorically held that the Adjudicating Authority, which was required to pass an order admitting or rejecting the application after being satisfied with the application's completion and proof of debt and default as mandated by Section 9(5), failed to provide an opportunity for the applicant to correct the defect that was discovered and bring it in compliance with the law's requirements.
The AA order was rescinded. The appeal was dismissed with the aforementioned remarks.