Hannu Steel Private Limited vs Rathi Powertech Global Private Limited

(Arising out of order dated 08.12.2025 passed by the National Company Law Tribunal, Delhi Bench-IV in CP (IB) No. 567/ND/2025)

IN THE MATTER OF:

Hannu Steels Private Limited Through its Authorized Signatory 505, Second Floor, FIE, Patparganj Industrial Area, Delhi-110092 ....Appellant Versus

Rathi Powertech Global Private Limited 24/lA, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi-110044 ....Respondent

Present:

For Appellant: Mr. Manan Batra, Mr. Abhishek Chhabra and Mr. Arun Bhattacharya, Advocates.

For Respondents: Mr. Karan Gandhi, Advocate.

J U D G M EN T (06th July, 2026)

INDEVAR PANDEY, MEMBER (T)

The present Appeal arose out of the order dated 08.12.2025 passed

by the Adjudicating Authority (National Company Law Tribunal, New

Delhi Bench-IV), in C.P.(IB) No.567/ND/2025. M/s Hannu Steels Pvt. Ltd., the Appellant herein is the Corporate Debtor, which is aggrieved by

the impugned order dated 08.12.2025 passed by Adjudicating Authority

in (C.P.(IB) No.567/ND/2025, whereby the Right to file reply of the

Appellant in the said proceedings was closed.

2. Brief facts of the case necessary to decide this Appeal are as under:

(i) The Appellant and Rathi Powertech Pvt. Ltd./Respondent

and Operational Creditor entered into a License User Agreement

dated 01.03.2022, under which the Respondent, which is the owner

of the trademark "POWERTECH" for manufacture and marketing of

TMT Bars, granted the Appellant, a licence to use the said

trademark for a monthly licence fee of Rs.23,00,000/- plus

applicable GST. The tenure of the agreement was for one year.

(ii) Clause 20 of the Agreement entitled the Appellant to

terminate the arrangement by giving three months' advance written

notice in the event of breach, non-feasibility, non-viability or any

other unforeseen reason, while continuing payment of royalty

during the notice period.

(iii) Prior to expiry of the original term, the parties executed an

Addendum dated 28.02.2023 extending the Agreement till

28.02.2025 and enhancing the monthly royalty/licence fee to

Rs.30,00,000/- plus applicable GST. All other terms and conditions

of the original Agreement remained unchanged.

Page 2 of 22

Company Appeal (AT) (Ins.) No. 124 of 2026

(iv) On 03.06.2024, the Commission for Air Quality Management

(CAQM), NCR and Adjoining Areas, directed closure of the

Appellant's manufacturing unit under Section 12(2)(xi) of the

Commission for Air Quality Management in National Capital Region

and Adjoining Areas Act, 2021. Consequent to the closure order,

the Appellant issued a termination notice dated 10.06.2024

invoking Clause 20 of the Agreement and intimating its intention to

terminate the Agreement after expiry of the stipulated three-month

notice period, i.e., with effect from 10.09.2024.

(v) The Respondent, however, alleged default in payment of

royalty/licence fee for part of September, 2024 and for the period

October, 2024 to February, 2025, and consequently filed an

application under Section 9 of the Insolvency and Bankruptcy

Code, 2016 (hereinafter referred to as "Code") being CP (IB) No.

567/ND/2025 before the Adjudicating Authority claiming

operational debt arising from unpaid licence fee.

(vi) The Company Petition was filed on 19.10.2025 and registered

on 29.10.2025. On 31.10.2025, the Adjudicating Authority noted

the non-filing of an affidavit under Section 63 of the Bharatiya

Sakshya Adhiniyam, 2023 regarding service of demand notice

under Section 8 of the Code and adjourned the matter. On

19.11.2025, a proxy counsel appeared on behalf of the Appellant

and accepted notice. The Adjudicating Authority granted one week's

Page 3 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 time to the Appellant to file its reply and listed the matter on

08.12.2025.

(vii) On 08.12.2025, the next date of hearing the Adjudicating

Authority declined the request for adjournment made by the proxy

counsel and closed the Appellant's right to file reply, as no reply

was filed by the Appellant by that time.

(viii) Thereafter, the Appellant engaged new counsel who appeared

before the Adjudicating Authority on 05.01.2026 and sought an

opportunity to place the Appellant's defence on record. However,

the Adjudicating Authority, noting that the right to file reply had

already been closed and no written submissions had been filed,

declined the request and reserved orders in the Company Petition.

(ix) Aggrieved by the impugned order dated 08.12.2025 closing

its right to file reply and contending that such closure resulted in

denial of a reasonable opportunity of hearing due to the negligence

of its previous counsel, the Appellant has preferred the present

Appeal.

Submissions of Appellant

3. Ld. Counsel for Appellant submits that the present Appeal has been

filed with a delay of only seven (7) days beyond the prescribed period of

limitation and the same falls well within the condonable period of fifteen

(15) days contemplated under the proviso to Section 61(2) of the Code.

Page 4 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026

4. He submits that the Appellant was prevented by sufficient cause

from filing the Appeal within the initial period of thirty days. The Appellant

came to know of the impugned order dated 08.12.2025 only on

26.12.2025 while independently checking the website of the Adjudicating

Authority after repeated attempts to contact its erstwhile counsel failed.

5. He further submits that the previous counsel neither informed the

Appellant about the passing of the impugned order nor disclosed that the

Appellant's right to file reply had already been closed by the Adjudicating

Authority. The Appellant was under the bona fide impression that the

matter was listed on 05.01.2026 and that its reply could still be filed.

6. Ld. Counsel submits that immediately upon acquiring knowledge

of the impugned order, the Appellant engaged the present counsel.

However, owing to the intervening winter vacations and the non-

availability of the present counsel, who was travelling during that period,

the Appeal could not be filed earlier. Appellant contended that the delay

is neither deliberate nor intentional and no prejudice would be caused to

the Respondent if the delay is condoned, whereas refusal to condone the

delay would deprive the Appellant of its valuable statutory right of appeal.

7. Appellant placed Reliance on the judgment of the Hon'ble Supreme

Court in Ramchandra Dallaram Choudhary v. Adani Infrastructure

& Developers Pvt. Ltd., Civil Appeal No. 5106 of 2025, wherein the

Court held that the expression "sufficient cause" deserves liberal

construction, particularly where the delay has occurred due to lapses on

Page 5 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 the part of counsel and where adjudication on merits would advance the

cause of justice.

8. Appellant further placed reliance on the decisions in Rafiq & Anr.

v. Munshilal & Anr. (Civil Appeal No. 1415 of 1981) and Dwarika

Prasad (Dead) through LRs v. Prithvi Raj Singh (SLP Civil No. 11259

of 2024), wherein the Hon'ble Supreme Court reiterated that a litigant

ought not to suffer for the fault, negligence or default of his advocate and

that disputes should ordinarily be decided on merits rather than on

technicalities.

9. Regarding the main matter in the appeal about delay in filing the

reply to Section 9 petition, Ld. Counsel submits that the Appellant had

acted diligently throughout the proceedings. All relevant documents,

instructions and material necessary for filing a reply to the Section 9

application had been supplied to the erstwhile counsel well in advance.

10. He submits that despite clear instructions from the Appellant, the

previous counsel failed to file the reply within the time granted by the

Adjudicating Authority and further failed to communicate the

consequences arising from the order dated 08.12.2025. The Appellant

cannot be penalised for acts and omissions attributable solely to its

counsel, particularly when there is no allegation that the Appellant itself

was negligent, careless or lacking in diligence. The principles of natural

justice require that a party be afforded a reasonable opportunity to place

its defence on record before any adverse order affecting its rights is

passed. Ld. Counsel contends that closure of the right to file reply has

Page 6 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 effectively deprived the Appellant of an opportunity to contest the Section

9 proceedings on merits and to place before the Adjudicating Authority

material facts which go to the root of the alleged operational debt.

11. Ld. Counsel submits that the parties had entered into a License

User Agreement dated 01.03.2022, subsequently extended by an

Addendum dated 28.02.2023. Under Clause 20 of the Agreement, the

Appellant possessed a contractual right to terminate the arrangement

upon issuance of a three months' prior notice in writing. After closure of

the Appellant's manufacturing unit pursuant to the order dated

03.06.2024 issued by the Commission for Air Quality Management

(CAQM), the Appellant invoked Clause 20 and issued a termination notice

dated 10.06.2024. He further submits that upon expiry of the three

months' notice period on 10.09.2024 and payment of all amounts payable

during such notice period, no further royalty or licence fee remained due

and payable.

12. He submitted that the Respondent has failed to disclose the

termination notice before the Adjudicating Authority and has raised its

claim on the basis of alleged dues for a period subsequent to the effective

termination of the Agreement.

13. It is further submitted that the Section 9 application is founded

merely upon proforma invoices and not upon final tax invoices, thereby

giving rise to serious disputes requiring adjudication. These issues

constitute substantial and bona fide disputes which deserve

Page 7 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 consideration by the Adjudicating Authority and cannot be shut out

without permitting the Appellant to place its defence on record.

14. Ld. Counsel submits that no irreversible prejudice would be caused

to the Respondent, if the Appellant is granted a final opportunity to file

its reply subject to appropriate conditions. Conversely, refusal to restore

the Appellant's right would result in serious civil consequences and may

culminate in admission of a Section 9 application without consideration

of the Appellant's defence.

15. Closing his submissions, Ld. Counsel submits that the impugned

order dated 08.12.2025 deserves to be set aside and the Appellant be

granted one effective opportunity to file its reply before the Adjudicating

Authority within a time frame fixed by this Appellate Tribunal.

Submissions of Respondent

16. Ld. Counsel submits that the only issue arising for consideration

in the present Appeal is whether the order dated 08.12.2025 passed by

the Adjudicating Authority, whereby the Appellant's right to file reply in

CP (IB) No. 567/ND/2025 was closed, suffers from any legal infirmity

warranting interference by this Appellate Tribunal.

17. He submits that the present Appeal does not arise out of any

adjudication on the merits of the claim of the Operational Creditor nor

does it concern the maintainability of the Section 9 Application.

Consequently, the various factual assertions and substantive defences

sought to be raised by the Appellant relating to the alleged termination of

Page 8 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 the License User Agreement, existence of disputes, liability to pay royalty,

validity of invoices and other contractual issues are wholly extraneous to

the controversy involved in the present Appeal.

18. It is submitted that such issues were never adjudicated by the

Adjudicating Authority and cannot be permitted to be introduced for the

first time in the present appellate proceedings. The scope of the Appeal

cannot be enlarged beyond the challenge to the procedural order dated

08.12.2025.

19. Ld. Counsel submits that the Appellant was duly served with the

Company Petition and had complete knowledge of the proceedings before

the Adjudicating Authority. On 19.11.2025, the Appellant entered

appearance through counsel, accepted notice and acknowledged receipt

of the petition. The Adjudicating Authority, in the interest of justice,

granted one week's time to file a reply.

20. Ld. Counsel submits that despite the specific judicial direction

contained in the order dated 19.11.2025, no reply whatsoever was filed

by the Appellant within the period granted by the Adjudicating Authority.

On the next date of hearing, i.e., 08.12.2025, the Appellant again

appeared through counsel and merely sought an adjournment without

assigning any sufficient or cogent reason explaining non-compliance of

the earlier order.

21. Respondent reiterated that neither any draft reply was placed on

record nor any application seeking extension of time was filed. No

Page 9 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 exceptional circumstances were disclosed before the Adjudicating

Authority which could justify the Appellant's failure to comply with the

order dated 19.11.2025. He submits that the Adjudicating Authority was

therefore fully justified in exercising its discretion and closing the

Appellant's right to file reply.

22. It is further submitted that even after the order dated 08.12.2025

was passed, the Appellant failed to take any legally recognized step for

seeking recall or modification of the said order. The Adjudicating

Authority had simultaneously directed both parties to file written

submissions within one week. The Appellant admittedly failed to comply

even with the said direction.

23. Ld. Counsel contends that if the Appellant was genuinely aggrieved

by closure of its right to file reply, it ought to have filed a formal

application seeking recall, modification or reconsideration of the order

dated 08.12.2025. Instead, the Appellant merely sought an oral

indulgence on 05.01.2026 without filing any application supported by

affidavit or documentary material, such oral mention cannot substitute a

properly instituted legal proceeding and the Adjudicating Authority

rightly declined to entertain the same.

24. He submits that the entire case of the Appellant rests upon an

attempt to shift the blame upon its erstwhile counsel. No documentary

material has been placed on record to substantiate the allegation that the

previous counsel failed to communicate the orders passed by the

Adjudicating Authority or that repeated efforts were made to contact him.

Page 10 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 No emails, letters, messages, call records, instructions, engagement

documents or any contemporaneous correspondence have been produced

by the Appellant in support of its allegations.

25. It is further submitted that the Appellant's own pleadings reveal

that all documents required for preparation of the reply were already

available with the Appellant and its counsel. The Appellant was therefore

fully aware of the proceedings and cannot now plead ignorance of events

occurring before the Adjudicating Authority. The explanation furnished

by the Appellant is self-serving, unsupported by evidence and lacks bona

fides.

26. He submits that even the present Appeal has not been filed within

the prescribed period and an application seeking condonation of delay of

seven days has been preferred. Condonation of delay under Section 61(2)

of the Insolvency and Bankruptcy Code is not automatic and can be

granted only upon proof of "sufficient cause".

27. Ld. Counsel submits that the Appellant has failed to establish any

sufficient cause explaining either its conduct before the Adjudicating

Authority or the delay in filing the present Appeal. The explanation

regarding non-availability of counsel during winter vacations is vague and

unsupported by any material particulars. It is further argued that the

conduct of the Appellant must be assessed cumulatively. The repeated

defaults before the Adjudicating Authority coupled with the delayed filing

of the present Appeal demonstrate a consistent pattern of negligence and

lack of diligence.

Page 11 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026

28. Ld. Counsel submits that the settled position of law is that a litigant

cannot avoid the consequences of its own inaction merely by attributing

fault to its advocate. Reliance is placed on the judgment of the Hon'ble

Supreme Court in Salil Dutta v. T.M. & M.C. (P) Ltd., (1993) 2 SCC

185, wherein it was held that an advocate acts as an agent of the litigant

and that there is no absolute rule permitting a party to disown its

advocate and seek relief. Reliance is also placed on the judgment of the

Hon'ble Supreme Court in Rajneesh Kumar v. Ved Prakash, 2024 SCC

OnLine SC 3380, wherein it was observed that litigants have an

independent obligation to remain vigilant regarding proceedings affecting

their rights and cannot routinely seek condonation by alleging negligence

on the part of counsel.

29. He further submits that the Appellant is a private limited company

managed by commercial entities and cannot be equated with an illiterate

or uninformed litigant. Such a commercial entity is expected to diligently

monitor proceedings and ensure compliance with judicial directions.

Reliance is further placed on the decision of the Delhi High Court in

Moddus Media Private Ltd. v. Scone Exhibition Pvt. Ltd. 2017 SCC

OnLine Del 8491, wherein it was held that a litigant cannot go into deep

slumber after engaging a lawyer and subsequently seek to shift the entire

blame upon the advocate.

30. Ld. Counsel also relies upon the decision of this Appellate Tribunal

in R Mall Developers Pvt. Ltd. v. Lemon Chilli Veg Gourmet Foods

LLP, Company Appeal (AT) (Insolvency) No. 527 & 528 of 2025,

Page 12 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 wherein it was held that a litigant cannot create a smoke-screen by

attributing all defaults to counsel and must demonstrate its own diligence

in pursuing the proceedings.

31. Ld. Counsel submits that the impugned order is a procedural order

passed in exercise of judicial discretion after the Appellant repeatedly

failed to comply with directions issued by the Adjudicating Authority. No

perversity, illegality, jurisdictional error or violation of principles of

natural justice is demonstrated in the impugned order. On the contrary,

the record establishes that adequate opportunity was granted to the

Appellant and that the consequences ultimately visited upon it were a

direct result of its own failure to act diligently.

32. Ld. Counsel further submits that permitting restoration of the right

to file reply in such circumstances would encourage non-compliance and

frustrate the objective of expeditious adjudication under the Insolvency

and Bankruptcy Code, 2016.

33. Ld. Counsel placed reliance on the decision of this Appellate

Tribunal in SCB Steels Pvt. Ltd. vs ---- Company Appeal (AT)

(Insolvency) No.1210 of 2025, wherein interference was declined where

the consequences complained of arose due to the party's own deliberate

negligence and non-compliance with judicial directions.

Page 13 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 Analysis and Findings

34. We have heard Ld. Counsels appearing for the Appellant and

Learned Counsel appearing for the Respondent and have carefully

perused the material available on record.

35. We first take up the prayer seeking condonation of delay. The

impugned order was passed on 08.12.2025. The present Appeal has been

filed beyond the prescribed period of thirty days by a delay of seven days.

The delay admittedly falls within the outer limit of fifteen days

contemplated under the proviso to Section 61(2) of the Code.

36. The Appellant has explained that the impugned order was never

communicated by its erstwhile counsel. According to the Appellant,

despite repeated attempts to contact the counsel, no information

regarding the proceedings was furnished. It is the case of the Appellant

that it became aware of the impugned order, only on 26.12.2025 after

independently verifying the status of the matter from the website of the

Adjudicating Authority. Immediately thereafter, steps were taken to

engage present counsel and initiate appellate proceedings.

37. The Respondent has opposed the application on the ground that

the explanation is vague and unsupported by documentary evidence and

that the Appellant has demonstrated a pattern of negligence both before

the Adjudicating Authority and before this Appellate Tribunal.

38. The expression "sufficient cause" occurring in limitation statutes

has repeatedly received liberal interpretation from the Hon'ble Supreme

Page 14 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 Court where refusal to condone delay would result in denial of

adjudication on merits. The Hon'ble Supreme Court In Ramchandra

Dallaram Choudhary v. Adani Infrastructure & Developers Pvt. Ltd.,

Civil Appeal No.5106 of 2025, reiterated that the expression "sufficient

cause" should receive a justice-oriented interpretation and courts must

examine whether refusal to condone delay would defeat substantial

justice, particularly where the delay is attributable to lapses on the part

of legal representatives and not deliberate conduct of the litigant.

39. Having regard to the explanation furnished by the Appellant and

considering that the delay is only of seven days and falls within the

condonable period prescribed by statute, we are satisfied that sufficient

cause has been shown. Accordingly, the delay of seven days in filing the

Appeal deserves to be condoned and is hereby condoned.

40. We now take up the matter under consideration in the present

Appeal, which arises from an interlocutory procedural order, whereby the

Adjudicating Authority closed the Appellant's right to file reply in the

pending proceedings Section 9 of Code.

41. The record indicates that notice was accepted on behalf of the

Appellant on 19.11.2025. One week's time was granted to file a Reply. It

is also not disputed that no Reply came to be filed before the next date of

hearing i.e. 08.12.2025. The Adjudicating Authority, finding that the

Reply had not been filed despite opportunity, closed the right of the

Appellant to file Reply.

Page 15 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026

42. It is well settled that regulation of proceedings and case

management ordinarily fall within the procedural discretion of the

Adjudicating Authority and such discretion should not be lightly

interfered with by an appellate forum. However, the exercise of such

discretion must always remain consistent with the principles of natural

justice and the requirement of affording parties a fair and meaningful

opportunity to present their case.

43. We are in agreement with the Respondent that the merits of the

underlying contractual disputes are not required to be adjudicated in the

present Appeal. Nevertheless, while examining whether denial of

opportunity has caused prejudice warranting appellate interference, it

becomes necessary to ascertain whether the defence sought to be raised

is prima facie substantial and deserving of consideration, without

expressing any opinion on its ultimate merits.

44. Insolvency proceedings under the Code carry serious civil

consequences upon admission of an application under Section 9,

including commencement of the corporate insolvency resolution process,

declaration of moratorium and displacement of the management of the

Corporate Debtor. It is therefore imperative that a party is not denied an

effective opportunity to place its defence before such consequences ensue.

45. The Appellant has consistently maintained that all documents and

necessary instructions had been supplied to its erstwhile counsel and

that the failure to file the reply was solely attributable to the negligence

of the counsel. The Respondent, on the other hand, contends that these

Page 16 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 allegations are unsupported by documentary evidence and do not

constitute sufficient cause.

46. While the Respondent is correct in contending that mere allegations

against counsel cannot, by themselves, justify restoration of procedural

rights, the issue cannot be decided solely on that basis. Courts are

required to balance two equally important considerations; first, the

judicial proceedings must be conducted with diligence and discipline, and

secondly, that substantive justice should not be defeated merely on

account of procedural lapses where no irreparable prejudice is caused to

the opposite party.

47. In Rafiq & Anr. v. Munshilal & Anr., (1981) 2 SCC 788, the

Hon'ble Supreme Court observed that a litigant who has done everything

expected of him should not be penalized for the default of his advocate.

The Court famously observed that the judicial system should not permit

a party to suffer merely because of the mistake of his counsel. The same

principle was reiterated recently in Dwarika Prasad (Dead) through LRs

v. Prithvi Raj Singh, SLP (Civil) No.11259 of 2024, wherein the Hon'ble

Supreme Court emphasized that adjudication on merits should ordinarily

prevail over technicalities and procedural defaults, unless mala fides or

deliberate negligence are established.

48. The Respondent has relied upon the judgment of Hon'ble Supreme

Court in Salil Dutta v. T.M. & M.C. (P) Ltd., (1993) 2 SCC 185. In this

case, the Hon'ble Supreme Court held that there is no absolute

proposition that every mistake of counsel must necessarily result in relief

Page 17 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 being granted to the litigant. The Court observed that an advocate acts as

an agent of the party and, therefore, in appropriate circumstances, the

acts of the advocate may bind the litigant. However, the said judgment

does not lay down an inflexible rule that relief can never be granted where

counsel is negligent. On the contrary, the decision recognizes that each

case must be examined on its own facts and that courts retain discretion

to prevent injustice.

49. The Respondent has also relied upon the judgment of Hon'ble

Supreme Court in Rajneesh Kumar v. Ved Prakash, 2024 SCC OnLine

SC 3380. The said decision reiterates the principle that litigants have an

obligation to remain vigilant and cannot entirely absolve themselves of

responsibility by blaming their advocates. We agree with the said

proposition. However, vigilance expected from a litigant cannot be

elevated into a standard of continuous supervision of every procedural

step taken by counsel. The doctrine of diligence cannot be stretched to

such an extent that substantive rights are defeated despite the existence

of bona fide explanations.

50. Lastly, the Respondent has relied upon the judgment of the Delhi

High Court in Moddus Media Private Ltd. v. Scone Exhibition Pvt.

Ltd., 2017 SCC OnLine Del 8491. In the said case, the Court observed

that a litigant cannot engage a lawyer and thereafter completely abandon

responsibility for the litigation. The proposition is unexceptionable.

However, the present case concerns a single procedural default resulting

in closure of the right to file reply in insolvency proceedings carries

Page 18 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 serious consequences, which may include initiation of CIRP Proceedings

against the appellant.

51. We further note that the Appellant has not remained absent from

the proceedings altogether. Appearance had been entered before the

Adjudicating Authority. Subsequently, a new counsel also appeared

before the Adjudicating Authority on 05.01.2026 seeking an opportunity

to place the defence on record. These circumstances indicate that the

Appellant was interested in contesting the proceedings and had not

abandoned the litigation.

52. The Respondent's reliance upon the decision of this Appellate

Tribunal in R Mall Developers Pvt. Ltd. v. Lemon Chilli Veg Gourmet

Foods LLP, Company Appeal (AT) (Insolvency) Nos.527 & 528 of

2025. The said judgment emphasizes that a litigant cannot create a

smoke-screen by merely blaming counsel and must demonstrate its own

diligence. On the contrary, we note that appellant has been very prompt

in follow-up action whenever any delay on the part of his counsel has

come to his notice. The appellant himself checked the status of the case

from the NCLT portal and took follow-up action. Therefore, the reliance

on the aforesaid case by the respondent does not support his case.

53. The Respondent has lastly relied upon the decision of this Appellate

Tribunal in SCB Steels Pvt. Ltd. vs ---- Company Appeal (AT)

(Insolvency) No.1210 of 2025. The said decision turned upon facts

where the Tribunal found deliberate negligence and repeated non-

compliance attributable to the party itself. The facts of the present case

Page 19 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 do not disclose any such conduct. We are therefore unable to hold that

the ratio of the said decision operates as a bar to grant of relief in the

present matter.

54. The defence sought to be raised by the Appellant cannot, at least

prima facie, be characterised as sham or frivolous. The Appellant asserts

that the License User Agreement stood validly terminated in accordance

with its contractual terms and that no royalty remained payable

thereafter, apart from raising disputes regarding the invoices forming the

basis of the Operational Creditor's claim.

55. We clarify that we express no opinion whatsoever on the merits of

these contentions. Their correctness shall be examined independently by

the Adjudicating Authority. However, the very existence of such a defence

reinforces the necessity of affording the Corporate Debtor an opportunity

to place its reply on record before the matter is finally adjudicated.

56. Any inconvenience occasioned by the delay can be adequately

compensated by costs. On the contrary, if the impugned order is allowed

to stand, the Section 9 application may proceed to adjudication without

consideration of the defence sought to be raised by the Corporate Debtor.

Such a course would not advance the cause of justice.

57. The objective of the Code is undoubtedly expeditious resolution.

However, such expeditious resolution cannot be at the cost of fairness

and natural justice. Speed of adjudication and observance of natural

justice are complementary and not conflicting objectives. The principles

Page 20 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 of natural justice require that before serious civil consequences ensue, a

party should ordinarily be afforded a meaningful opportunity to present

its defence as the doctrine of audi alteram partem remains embedded in

insolvency jurisprudence.

58. It is a settled principle that procedural laws are intended to

facilitate adjudication and not to obstruct it. The Supreme Court has

consistently held that unless gross negligence, mala fides or abuse of

process are established, courts should ordinarily lean in favour of

adjudication on merits. Applying the aforesaid principles to the facts of

the present case, we are of the considered opinion that the interests of

justice require that the Appellant be afforded one final opportunity to

place its Reply on record.

59. We are also of the view that no irreversible prejudice would be

caused to the Operational Creditor, if one final opportunity is granted to

the Corporate Debtor to place its reply on record.

60. We are, accordingly, of the view that the order dated 08.12.2025

closing the right of the Appellant to file Reply cannot be sustained and

deserves to be set aside.

61. The Appellant is entitled to one final opportunity to file its Reply

before the Adjudicating Authority subject to appropriate conditions and

within a time-bound schedule so that the objective of expeditious

insolvency adjudication is not defeated. The Adjudicating Authority shall

thereafter consider the matter on merits and in accordance with law

Page 21 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026 without being influenced by any observations contained in this

Judgment. We clarify that all rights and contentions of the parties on

merits remain open for adjudication before the Adjudicating Authority.

62. Accordingly, the Appeal is allowed. Pending IA's, if any, are closed.

Parties to bear their own costs.

[Justice N. Seshasayee] Member (Judicial)

[Indevar Pandey] Member (Technical)

Place: New Delhi Harleen

Page 22 of 22 Company Appeal (AT) (Ins.) No. 124 of 2026