Can NCLT reject an application filed under Section 9 of IBC on the grounds that no proper explanation given on the date of invoice, default and limitation period to ascertain the due date, without providing opportunity to rectify the defects as per proviso to Section 9(5)(ii) of IBC – Shiv Glitz Hotels and Resorts LLP Vs. Oravel Stays Ltd. – NCLAT New Delhi
Hon’ble NCLAT held that:
(i) When the Adjudicating Authority has proceeded to dismiss the Application as defective, it was obligatory as per Proviso to Section 9(5)(ii) to give a notice to the Applicant to rectify the defect in the Application within seven days from the date of receipt of such notice. The Adjudicating Authority having not issued a notice under Proviso, the order impugned is unsustainable on this ground alone.
(ii) Adjudicating Authority having not adverted on the issue of pre-existing dispute, it is appropriate that said issue be gone into and considered by the Adjudicating Authority in accordance with law.