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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> NATIONAL COMPANY LAW APPELLATE TRIBUNAL It is mandatory to provide an opportunity to applicant for rectifying defects of application in terms of Section 9(5)(ii)(a) of IBC MANU/NL/0160/2021 - (19 Apr 2021) </td> </tr> <tr> <td align="left" valign="top">Tek Travels Pvt. Ltd vs Altius Travels Pvt. Ltd</td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE">Present appeal emanates from the Order passed by the Adjudicating Authority in Company Petition, whereby the Application filed by Appellant under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) was rejected on the ground of maintainability for want of proper Authorisation, which is of the year 2013, when IBC was not in existence. 
It is contended that, there is no specific provision neither in the Code nor under the Rules and Regulations made thereunder, which mandates authorisation post-enactment of the Insolvency & Bankruptcy Code 2016. Instead of deciding the Section 9 Application on merit, the Learned Adjudicating Authority rejected the application as not maintainable for want of proper Authorisation, which happens to be of 2013 when the I&B Code was not in existence. The Appellant contends that the Adjudicating Authority should have granted the liberty to rectify the defects if any. However, the Learned Adjudicating Authority failed to provide an opportunity of being heard to the Appellant either on account of principles of natural justice or account of non- compliance of the proviso to Section 9(5) (ii)(a) of the Code. Respondent's Contention. 
In the case of Ramesh Murji Patel and Rajendra Narottamdas Sheth, present Appellate Tribunal has already taken the view that, if Authorisation is prior to the enactment of the IBC, then it cannot be treated as a defect in the Application and 'authorisation letter, even if, issued prior to the enactment of IBC can be looked into for the purpose of entertaining an Application under Section 7 or 9 of the IBC. Thus, it is clear that if Applications filed under Section 9 of the IBC is found incomplete, then Adjudicating Authority in compliance of proviso to Section 9 (5) (ii)(a) of the IBC is obliged to issue notice on the applicant and provide an opportunity to rectify that the defects within seven days, failing which petition can be rejected. 
In the instant case, the Adjudicating Authority noticed that, the Authorisation was much before the commencement of the IBC, and only on this basis, the Application under Section 9 of the Code was rejected without allowing the applicant to rectify the mistakes, is against the statutory provision of the IBC. The Insolvency and Bankruptcy Code is a self-contained Code. It has made provision for providing an opportunity to rectify the defects of application, and in any position, it cannot be denied. 
In case of Surendra Trading Co. v. Juggilal Kamlapat Jute Mills Co. Ltd., Hon'ble Supreme Court of India has held that, the time provided for rectifying the defection application under Section 9 (5) of the IBC is directory in nature and in the given circumstances; the Tribunal can provide time more than 7 days to rectify the defect. 
In the instant case, the Adjudicating Authority has dismissed the Petition for want of proper Authorisation. However, the Adjudicating Authority has not considered providing an opportunity to the Applicant to rectify the defects. In contrast, proviso to Section 9(5)(ii)(a) of the IBC makes it mandatory to provide an opportunity to the applicant for rectifying the defects of the application. The Adjudicating Authority has erred in dismissing the Application for want of Authorisation, without even providing an opportunity to rectify the defects in compliance with Section 9(5)(ii)(a) of the IBC. Impugned Order is set aside. Appeal allowed.</td> </tr> <tr> <td align="left" valign="top" ></td> </tr> <tr> <td align="left" valign="top" >Tags : Proper Authorisation, Application, Maintainability</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr>  <td align="left" valign="top">Source : newsroom.manupatra.com</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> </table> </div> </body> </html>