NCLAT Sets Aside NCLT’s Rejection, Affirms Rectification under Rule 154 Maintainable Within Two Years of Final Order

The NCLAT set aside the NCLT’s rejection and affirmed that a rectification application under Rule 154 of the NCLT Rules, 2016, is maintainable if filed within two years from the date of the final order.

On 22 July 2025, the National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising Justice N. Sesha Sayee (Judicial Member) and Mr. Barun Mitra (Technical Member), while adjudicating a company appeal, held that the rectification of a final order under the IBC is governed by Rule 154(2) of the NCLT Rules, 2016, which allows such applications to be filed within two years. Accordingly, the Adjudicating Authority erred in rejecting the Resolution Professional’s rectification plea on the ground of limitation, as it was filed merely after three months.

The National Company Law Appellate Tribunal allowed the appeal filed by the erstwhile Resolution Professional of the Corporate Debtor, challenging the rejection of his rectification application by the Adjudicating Authority. The appeal arose from the approval of the resolution plan by the NCLT on 30.07.2024, wherein certain financial figures—though earlier approved by the Committee of Creditors—were omitted from the resolution plan as presented to the Tribunal. The RP had subsequently filed I.A. No. 5446 of 2024 in October 2024 seeking rectification of those inadvertent omissions, which was rejected on the ground of limitation, as the application was filed beyond 30 days from the date of the approval order.

The Appellant contended that the rejection was erroneous, submitting that no specific limitation is prescribed under the IBC for filing rectification applications, and instead, Rule 154(2) of the NCLT Rules, 2016 allows such applications to be filed within two years from the date of the final order. Since the rectification plea was moved within approximately three months, it was argued to be well within the prescribed period under the said Rule.

The Respondent-Successful Resolution Applicant did not contest the appeal. After examining the record and hearing the submissions, the Appellate Tribunal held that the NCLT had not referred to any provision of the IBC while rejecting the rectification application. It found merit in the RP’s contention that Rule 154 of the NCLT Rules was applicable and that the application had been filed well within the permissible period. Accordingly, the Tribunal set aside the NCLT’s order dated 09.05.2025 and directed the Adjudicating Authority to hear and dispose of the rectification application on merits, preferably within four weeks.

Mr. Ankur Mittal and Ms. Sabhya Jain, Advocates, represented the Appellant.

Mr. Kunal Godhwani, Advocate, appeared for the Successful Resolution Applicant (SRA).

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