IBC — S. 7(5)(b) — Mandatory Notice Requirement — Consolidated Notice Not Sufficient (pp. 7–9) Proviso to S. 7(5)(b) IBC requires that “notice to rectify the defect in the application within seven days of the receipt of such notice” must be given to the applicant itself. A consolidated notice issued by the Joint Registrar of NCLT covering 26 defective petitions/applications does not satisfy the requirement of notice under the proviso to S. 7(5)(b). Compliance with the NCLT Rules cannot substitute statutory compliance under the IBC. Service on an authorised representative under Rule 38(5) NCLT Rules is not enough for meeting the mandate of the proviso to S. 7(5)(b). Held, no notice under S. 7(5)(b) was ever issued, and therefore rejection of the S.7 application without such notice was erroneous.

IBC — S. 7(5)(b) — Mandatory Notice Requirement — Consolidated Notice Not Sufficient

(pp. 7–9)
Proviso to S. 7(5)(b) IBC requires that “notice to rectify the defect in the application within seven days of the receipt of such notice” must be given to the applicant itself.
A consolidated notice issued by the Joint Registrar of NCLT covering 26 defective petitions/applications does not satisfy the requirement of notice under the proviso to S. 7(5)(b).
Compliance with the NCLT Rules cannot substitute statutory compliance under the IBC.
Service on an authorised representative under Rule 38(5) NCLT Rules is not enough for meeting the mandate of the proviso to S. 7(5)(b).
Held, no notice under S. 7(5)(b) was ever issued, and therefore rejection of the S.7 application without such notice was erroneous.

IBC — S. 7 — Defective Affidavit — Application Not Non Est — Defect Curable

(pp. 6–7, 9–10)
Filing of an S. 7 application in Form 1 does not require an affidavit under the IBC or the IBBI Regulations; the affidavit is required only by Rule 34(4) NCLT Rules.
A defective affidavit does not render the entire S. 7 application non est.
The defect is “neither an incurable nor a fundamental defect” and is therefore curable.
Objection of corporate debtor that the application was “non est” rejected — even their own additional affidavit called it merely “defective”.

IBC — Procedural Defects — Curability — Procedural Rules Not to Defeat Substantive Justice

(pp. 10)
Reaffirmed principles in Vidyawati Gupta v. Bhakti Hari Nayak, (2006) 2 SCC 777, and
Uday Shankar Triyar v. Ram Kalewar Prasad Singh, (2006) 1 SCC 75:
Rules of procedure are made “to further the cause of justice and not to prove a hindrance thereto”.
Procedural defects and irregularities which are curable should not defeat substantive rights or cause injustice.
Procedure, being a “handmaiden to justice,” should not be used oppressively to deny justice.

NCLAT Order — Partly Correct, Partly in Error — Restoration Without Curing Affidavit Improper

(pp. 7, 10–11)
NCLAT correctly held that absence of notice under the proviso to S. 7(5)(b) vitiated rejection of the S. 7 application.
However, NCLAT erred in restoring the company petition without directing the respondent-bank to cure the defective affidavit.
NCLAT ought to have required rectification at that stage.

NCLT Registry Action under Rule 28 NCLT Rules — Insufficient for S. 7(5)(b)

(pp. 7–9)
Issuance of consolidated notices under Rules 28(2), 28(3), 28(4) NCLT Rules and uploading on website/notice board does not amount to statutory notice under S. 7(5)(b).
Registry action cannot override explicit IBC requirement.

 Final Directions — Time-bound Cure of Defects

(p. 11)
Appeal disposed directing the respondent-bank to cure all defects, including the defective affidavit, within seven days;
NCLT, Ahmedabad Bench, to thereafter take up the matter for hearing “in accordance with law and due procedure”.
Parties to bear their own costs.