Is NCLAT precluded from scrutinizing the tenability and reasonability of the grounds on which re-filing delay condonation has been sought? | Period of 7 days prescribed in NCLAT Rule 26(2) with respect to removal of defects is directory in nature or mandatory? – CA Ramchandra Dallaram Choudhary, Liquidator of Anil Ltd. Vs. Adani Infrastructure & Developers Pvt. Ltd. – NCLAT New Delhi
The Hon’ble NCLAT held that no quarrel with the proposition canvassed by the Applicant that the period of seven days stipulated under NCLAT Rules for rectification of defects is directory and not mandatory. It is also in agreement with the finding in Mr. V R Ashok Rao v. TDT Copper Ltd. (2022) ibclaw.in 598 NCLAT judgment that on removal of defects notified by the Registry within a reasonable period, a liberal approach should be adopted to condone the delay. Be that as it may, it is equally important to note that the same judgment also observes that justifiable cause must be shown for the delay. More importantly, in adopting a liberal and flexible approach, the Tribunal cannot allow any compromise of the well settled precept of “timeliness” which constitutes one of the cardinal cornerstones of the statutory framework of IBC.