Adjudicating Authority Cannot Presume Waiver of Oral Hearing When Pass Over Is Requested: NCLAT
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REEDLAW Legal News Network reports: In a pivotal ruling, the National Company Law Appellate Tribunal underscored that when a party merely requests a pass over and does not express unwillingness to argue, the Adjudicating Authority cannot infer a waiver of oral hearing. The Tribunal emphasised that a fair opportunity to present submissions is an essential facet of natural justice, and any decision taken without such an opportunity would be legally unsustainable.
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), while adjudicating a batch of two Company Appeals, held that when a party merely seeks a pass over and does not express unwillingness to argue, the Adjudicating Authority cannot presume waiver of oral hearing and must afford a fair opportunity to present submissions before deciding the matter. The Appellate Tribunal thus reaffirmed the centrality of procedural fairness and reasoned adjudication within the framework of insolvency proceedings.
The Appellate Tribunal dealt with a challenge against the order dated 27 October 2025, whereby the Adjudicating Authority had rejected the application filed by the Appellant seeking recall of an earlier order dated 15 September 2025. The Appellant contended that on 15 September 2025, several avoidance applications filed by the Resolution Professional were listed for hearing, and a request was made to pass over the matter as the Senior Counsel for the Appellant was engaged before another Bench. However, the Adjudicating Authority declined the request and, under the impression that both parties did not wish to argue, directed them to file written submissions instead. Subsequently, the Appellant filed an application on 8 October 2025 seeking a recall of the said order, which was dismissed on 27 October 2025.
It was argued on behalf of the Appellant that no statement was ever made indicating unwillingness to argue the matter and that the request for a short pass over was only to facilitate effective representation. The Appellant asserted that denial of oral submissions would cause serious prejudice, as the pleadings were already complete and the matters were ripe for hearing. The counsel for the Resolution Professional did not dispute that the Appellant had requested a pass over and confirmed that written submissions had been filed by both sides.
Upon examining the record, the Appellate Tribunal observed that the Adjudicating Authority failed to consider the specific pleadings of the Appellant, stating that only a request for pass over was made. It noted that there was no material to suggest any attempt by the Appellant to delay the proceedings or seek repeated adjournments. The Tribunal held that the Adjudicating Authority erred in recording that both parties did not wish to argue the matter and in denying the Appellant an opportunity to present oral submissions.
Accordingly, the Appellate Tribunal set aside the order dated 27 October 2025 and modified the order dated 15 September 2025 by deleting the observation that “both parties do not wish to argue the matter.” As written submissions had already been filed, no further submissions were required. The Tribunal directed the Adjudicating Authority to grant both parties an opportunity to make oral submissions and decide the matter on the merits, clarifying that neither party shall seek any adjournment in this regard. The appeals were disposed of with these directions.
Mr. Rajat Joneja, Ms. Sakshi Kapoor and Ms. Tina Aneja, Advocates, represented the Appellants.
For the Respondent/ Defendant: Mr. Abhirup Dasgupta, Mr. Rahul Gupta, Mr. Rahul Dadhich and Ms. Vagksha Tiwari, Advocates, appeared for the Respondent.
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