Whether there is a legal bar to the amendment of pleadings in a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) or to the filing of additional documents aside from those initially filed, along with the petition under Section 7 of the IBC in Form-1, was one of the issues considered in the appeal filed by the Bank against NCLAT in the judgement of Dena Bank vs. C. Shivakumar Reddy and later the application was dismissed under Section 7 IBC.
In this case, the adjudicating authority had given the applicant bank permission to submit extra paperwork and modify the application. Later, after rejecting the Corporate Debtor's objection about limitation, it admitted the petition under Section 7 of the IBC and appointed an interim resolution professional. The NCLAT ruled in an appeal that the application was time-barred.
It was argued in the appeal that the following improvement in pleadings, at the tail end of the NCLT proceedings, should not have been tolerated, citing Babulal Vardharji Gurjar v. Veer Gurjar Aluminium Industries Private Limited.
The bench observed When there is excessive delay, the Adjudicating Authority may, at its discretion, deny the request of an applicant to file more pleadings and/or documents and proceed to pass a final order, depending on the facts and circumstances of the case. According to our carefully considered opinion, the Adjudicating Authority's choice to entertain and/or grant the Appellant Bank's request for the filing of additional documents with supporting pleadings, as well as to consider such documents and pleadings, did not warrant interference in the appeal, it said and held that “Babulal Vardharji Gurjar (supra) is not an authority for the proposition that there can be no amendment of pleadings at the fag end of the NCLT proceeding. Moreover, in this case, the amendments were not made at the fag end of the proceedings but within 2/3 months of their initiation, before admission of the petition under Section 7 of the IBC.”