Kerala High Court on Filing Additional Objections in Section 7 IBC Matters

Background of the Dispute

The Kerala High Court, in BPL Limited Vs National Company Law Tribunal, examined whether the National Company Law Tribunal (NCLT), Kochi Bench, could refuse permission to accept additional objections and documents in a Section 7 application under the Insolvency and Bankruptcy Code, 2016 (IBC).

The case arose out of financial facilities allegedly availed by the corporate debtor (BPL Limited) from the financial creditor (2nd respondent). When the assessee allegedly defaulted on its obligations, the 2nd respondent initiated insolvency proceedings under Section 7 of the IBC before the NCLT, Kochi.

The controversy did not relate to the merits of the debt itself, but to a procedural question:

Can a corporate debtor be prevented from filing additional objections and documents after having already filed an initial reply in a Section 7 IBC proceeding?

The High Court ultimately held that additional objections can indeed be entertained, subject to the discretion of the NCLT, and that the Tribunal’s contrary view was unsustainable in law.

Chronology of Events Before NCLT

Initial Proceedings

  1. The assessee company is registered under the Companies Act, 1956.
  2. The 2nd respondent initiated proceedings under Section 7 of the IBC (referred to as Ext.P3) before the NCLT (1st respondent).
  3. The assessee entered appearance before the NCLT on 17.04.2026.
  4. The NCLT allowed only 96 hours for filing objections.
  5. The assessee complied and filed its reply/objection on 20.04.2026.

Initially, the matter was taken up by a single member of the NCLT on 27.04.2026 (Ext.P2D). However, pursuant to an administrative order (Ext.P6), the matter, being covered by that order, was required to be heard by a Division Bench. Consequently, the Section 7 petition was placed before a Division Bench and arguments were heard over two days.

Application for Additional Objections

Subsequently, on 06.05.2026, the assessee filed an application (Ext.P7) invoking:

  • Rule 11 of the National Company Law Tribunal Rules, 2016 (inherent powers), and
  • Rule 55 of the same Rules

and sought permission to:

  • place additional objections on record, and
  • produce supporting documents along with those objections.

The assessee explained that the extremely tight time frame of 96 hours had compelled it to file an initial reply in haste and that further objections and documents were necessary for complete and effective adjudication.

Impugned NCLT Order

By order dated 04.06.2026 (Ext.P1), the NCLT rejected the request for additional objections, recording, inter alia, the following reasoning:

  • There was no provision either in the IBC or in the NCLT Rules, 2016, which permitted filing of additional objections after submission of the original reply.
  • The documents filed along with the application for additional objections were already in the knowledge and possession of the corporate debtor at the time of filing the original objections, and therefore should have been produced earlier.

However, the Tribunal then proceeded to make a qualified concession:

The additional documents would be entertained only to a limited extent, and only insofar as they supported the pleadings already contained in the objections filed on 20.04.2026, and this was made subject to payment of ₹2,500 per document to the National Defence Fund. The Tribunal clarified that these documents would be read at the time of hearing on admission, subject to these limitations.

Thus, while emphatically stating there was no power to accept additional objections, the NCLT allowed the documents in part, but not the additional pleadings.

Aggrieved by this order, the assessee approached the Kerala High Court under Article 226 of the Constitution.

Proceedings Before the Kerala High Court

Interim Relief

On 05.06.2026, the High Court, noting the key contention that the NCLT had wrongly concluded that no provision existed for entertaining additional objections, granted an interim order:

All further proceedings in the Section 7 application (Ext.P3) were stayed.

Meanwhile, the 2nd respondent entered appearance before the High Court and filed an interlocutory application seeking vacation of the interim stay.