KSS Petron Private Limited vs Bhubaneshwar Expressways Private Limited

PER: SHRI ASHOK KUMAR BHARDWAJ, MEMBER (J)

IA-2392/2026:-The applicants viz. Feedback Highways OMT(P) LTD & Sayam Shares and Securities (P) Ltd have preferred the present application, making the following prayer:-

The conspectus which led to filing the present application as espoused in the IA itself can be summarized thus:-

I. The Feedback Highways OMT (p) LTD earlier known as Feedback Brisa Highways OMT (P) Ltd. is an operational creditor qua the corporate debtor, as its name has been so reflected in the audited balance sheet of the corporate debtor coming forward from 2015-16. The amount shown as outstanding in favour of the applicant no 1 viz. Feedback Highways OMT (p) Ltd. in the audited balance sheet as on 31-03-2022 as also as on 31-03-2023 etc. is Rs. 1,62,42,806.20p. The amount is disputed by the applicant no. 1 as the actual amount is closer to Rs. 3.30 crores in 2016 or thereabout, including the value of two unreasonably and illegally invoked and encashed back guarantees by the corporate debtor which has not been shown to the credit of the applicant no. 1. Further, the credit outstanding in favour of the applicant no. 1 is required to be updated with interest as per agreed clause in the contract up to 09-12-2024. However, the exact amount payable to the applicant no. 1 as an operational creditor is irrelevant for the purpose of IA-2392/ND/2026, partly because whether the amount due to the applicant no 1 is Rs. 1.62 crores or Rs. 3.30 crores, in either scenario, the fact remains that the applicant no. 1 is an operational creditor qua the corporate debtor and has locus to prefer IA-2392/ND/2026 viz. present IA. Besides, irrespective of being operational creditor, the applicant no.1 has locus-standi to file the application (viz. IA-2392/ND/2026). Even otherwise also any person who acquire knowledge of breach of law acquire right to approach this Tribunal and place the information in his possession regarding breach of law on record.

II. The Applicant No. 2 viz. Sayam Shares and Securities (P) Ltd. which is an assignee of the claim of Rs. 1.62 crores (precisely, Rs. 1,60,42,806.20p) payable by the corporate debtor to the Applicant No. 1 ( M/s. Feedback Highways OMT (p) Ltd.) turns creditor of the corporate debtor on the basis of such assignment.

III. It could be agreed between Applicant No.1 and Applicant No. 2 that the assignment of the claim by Applicant No.1 to Applicant No. 2 would be operative from the date the resolution professional qua the corporate debtor recognizes the claim of Applicant No,1 as an operational creditor of the corporate debtor. Till such time the claim of the Applicant No. 1 is recognized as operational creditor qua the CD by the Resolution Professional, in terms of the agreement entered into by means of a power of attorney dated 29-07-2025 the Applicant no.2 was to act as an attorney of the Applicant No. 1 in all dealings with the Resolution Professional involving the Respondent No. 1. On recognition by the Resolution Professional, the transfer of actionable claim in favor of Applicant No. 2, the power of attorney was to cease to have any further effect.

IV. On 25-05-2026, when IA-2268 of 2026 was listed before this Tribunal, after hearing the parties this Tribunal focused on IA-4254/2025 and directed the applicants to file a detailed description of each of 78 respondents to enable it to consider whether or not such respondents were either necessary or proper parties to the proceedings. Though the applicant needed only a day’s time, this Tribunal could list the matter two days later i.e. on Thursday, as Wednesday was holiday.

V. The stand of the Liquidator who represented the corporate debtor thrice earlier viz. vide affidavits dated 21-05-2025, 07-07-2025, 02-09-2025 and 19-03-2026. Similarly, the stand of the RP also has come on record vide written submissions dated 02-09-2025. Likewise, the stand of the BEPL RP came on record with written submissions dated 07-10-2025. Also the stand of AMNS Group came on record vide written submissions dated 02-09-2025. Additionally, AMNS filed IA Nos. 4380/2025 and 4387/2025, whereby they had sought dismissal of IA Nos. 4254/2025 and 2693/2025, respectively.

VI. The Applicant preferred IA No. 4623/2025 only because the Arcelor Mittal Group vide its IA Nos. 4380/2025 and 4387/2025 had sought dismissal and rejection of IA Nos. 4254/2025 and 2693/2025, respectively. By way of IA No. 4683/2025 (ibid.) the applicant had sought dismissal of IA Nos. 4380/205 and 4387/2025, respectively or in alternate treat the same (IA 4380/2025 and 4387/2025) as a replies to IA Nos. 4254/2025 and 2693/2025, on behalf of the Arcelor Mittal Group. The IA No. 4623/2025 is pending for adjudication. Thus it is clear that the position of all the parties has come on record, thereby facilitating this Tribunal to decide IA No. 4254/2025.

VII. While deciding IA 4254/2025, this Tribunal would undoubtedly take notice of the fact that in all their affidavits/written submissions placed on record, the parties refer to in Para 16 of the application have not commented upon the five core issues viz.:-(i) breach of the Stamp Act; (ii) breach of the Registration Act; (iii) breach of the SARFAESI Act; (iv) breach of the conditions on which the Hon’ble Supreme Court granted exemption from application of section 29A of IBC, 2016; (v) and breach of the Companies Act ( violation of the Memorandum of Association).

VIII. The relevance of examination of array of parties by any court or tribunal indicates that the Tribunal has already identified to its satisfaction the existence of a legitimate and lawfully-pursuable cause of action. Only when a lawful cause of action has been identified by a court or tribunal, the relief can be examined by it and on the basis of the relief sought, the rightful array of parties is determined. To say that a court or tribunal would first examine the array of parties before examining as to whether or not there is a lawful cause of action would be a classic case of putting the cart before the horse. Since this Tribunal has already directed some respondents to file their reply and is examining the array of parties, it transpires that the Tribunal is satisfied that a cause of action exists, even when it does not apply to all the prayers. Insofar as there is no rationale behind any court or tribunal issuing summons/notices only to certain defendants/respondents and not to the others. At the same time, not deleting the defendants/respondents to whom the Tribunal has not issued notice/summons, would be a practice tantamount to piece-meal adjudication.

IX. A distinction was drawn between a “necessary party” and a “proper party”, emphasizing that a necessary party need not necessarily be a wrongdoer. A necessary party is one against whom effective directions are sought and whose presence is essential for complete and effective adjudication of the issues involved.

X. The challenge to the maintainability of an application seeking its rejection at the threshold was explained through principles analogous to Order VII Rule 11 of the Code of Civil Procedure, 1908. The maintainability challenge was required to be examined solely on the basis of the facts pleaded by the applicant, without introducing any new facts or documents. If even one of the reliefs sought was legally maintainable, the application could not be rejected at the threshold and was required to proceed for adjudication.

XI. The distinction between an application seeking rejection and one seeking dismissal was also highlighted. While rejection concerns a legal bar apparent from the pleadings, dismissal involves adjudication on merits and may operate as res judicata. An application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 seeking dismissal of another application before issuance of notice was characterized as substantially forming part of the respondent’s reply, particularly where it introduces additional facts, disputes the applicant’s assertions, or relies upon fresh documents.

XII. An approach permitting separate applications to challenge every pending application was described as leading to an endless chain of interlocutory proceedings and unnecessary delay. Reference was made to orders of the NCLT, Ahmedabad Bench, where parties were directed to raise all objections, including those relating to maintainability, in their replies rather than through piecemeal challenges. The filing of such applications solely to prevent issuance of notice and avoid dealing with the substantive assertions raised in the main application was described as an abuse of the process of law. Questions were also raised regarding the validity of certain affidavits relied upon by the opposing parties, and it was asserted that objections analogous to those under Order VII Rule 11 CPC could be argued without requiring a detailed factual rebuttal.

XIII. A necessary party was described as a party against whom directions are sought, irrespective of whether such directions are adverse to its interests, or a party whose direct interests are affected by the reliefs sought. Reliance was placed on Order I Rule 5 of the Code of Civil Procedure to contend that every defendant need not be interested in all the reliefs claimed in a proceeding.

XIV. A proper party was described as a party whose interests may be indirectly affected by the directions sought against a necessary party, or whose conduct and interests may fall for consideration while adjudicating the dispute, thereby facilitating a complete and effective determination of all questions involved. By way of illustration, reference was made to a situation where a shareholder challenges a contract entered into by a company, in which case the company would constitute a necessary party, while the contracting counterparty would constitute a proper party.

XV. It was emphasized that a proceeding would not fail merely because a party was wrongly impleaded or omitted, save and except in cases involving non-joinder of a necessary party. Reliance was also placed on Order I Rule 9 of CPC, 1908 to contend that while non-joinder of a proper party is not fatal, non-joinder of a necessary party may render the proceedings defective. Reference was further made to Order I Rule 10 of CPC, 1908 to highlight the power of the Tribunal to strike out improperly joined parties and to add parties whose presence is necessary for complete and effective adjudication of the issues involved.

XVI. A distinction was also drawn between the rights available to a necessary party and those available to a proper party at the pre-notice stage. A necessary party was stated to possess a limited right of audience before issuance of notice, particularly where ex parte or interim reliefs are sought against it. Such audience, however, was confined to pure questions of law arising from the pleadings and documents already placed on record and could not extend to introducing new facts or altering the nature of the dispute.

XVII. The possibility of respondents attempting to divert the proceedings from the issues originally raised was also highlighted. In this context, reference was made to arguments advanced on behalf of certain respondents contending that the proceedings were intended to cast a cloud over the resolution of Essar Steel India Ltd., notwithstanding the assertion that no such challenge to the concluded resolution process was involved.

XVIII. In contrast, a proper party was stated to possess no right of audience before issuance of notice for the purpose of opposing such issuance. At the highest, a proper party could seek deletion from the array of parties. A proper party could not claim a right to oppose issuance of notice to all respondents or canvass the case of other respondents at the pre-notice stage.

XIX. Details of the respondents as arrayed in IA NO. 4254 of 2025, reads thus:-

Out of a total of 78 respondents, 12 were categorized as necessary parties and the remaining respondents as proper parties. Their inclusion was stated to be necessary to avoid any challenge on the ground of non-joinder of parties and to ensure complete and effective adjudication of all issues involved in the proceedings. Reliance was placed upon the principles laid down by the Hon’ble Supreme Court in Udit Narayan Singh Malpaharia v. Additional Member, Board of Revenue, Bihar and Prabodh Verma v. State of Uttar Pradesh regarding the proper array of parties in judicial proceedings.

The inclusion of a large number of respondents was explained as a measure adopted to comply with the legal requirements governing necessary and proper parties, notwithstanding the additional burden and expense involved. The possibility of objections being raised on the ground that the proceedings were vexatious merely because of the large number of respondents was also addressed. The array of parties was stated to have been prepared after considering the causes of action, the reliefs sought, and the principles governing necessary and proper parties, with a view to safeguarding the proceedings from any future challenge based on non-joinder. At the same time, it was expressed that if any respondent, upon being served and made aware of the allegations and reliefs sought, chose not to participate in the proceedings or sought deletion from the array of parties, no objection would be raised so long as such absence did not impede the grant of reliefs sought, give rise to future challenges on the ground of non-participation, or permit subsequent rebuttal of the facts asserted in the application.

Reliance was further placed upon the judgment of the Hon’ble NCLAT in Directorate of Enforcement v. Gaurav Misra (RP) & Ors., wherein the necessity of impleading all relevant necessary and proper parties was emphasized. While maintaining that respondents numbered 1 to 12 constituted necessary parties, the determination of whether respondents numbered 13 to 78 should continue as proper parties was left to the discretion of the Tribunal. Such an approach was stated to eliminate any scope for obstruction of the proceedings by prospective respondents on the issue of impleadment.

The categorisation of the Respondents arrayed in IA 4254/2025 reads thus:-

Reference was also made to earlier proceedings in which objections had been raised by entities belonging to the ArcelorMittal group regarding their inclusion as respondents. In certain proceedings, such entities were not impleaded on the basis of legal advice that no reliefs had been sought against them and that they did not constitute either necessary or proper parties. However, after their exclusion from the array of parties, applications seeking impleadment were filed by them on the ground that they were necessary and proper parties. Against this backdrop, emphasis was placed on the principle that the applicant, being dominus litis, is entitled to determine the array of parties, subject to the approval of the Tribunal, and that any party seeking intervention or impleadment ought to do so through a formal application under the applicable provisions of law.

Reference was also made to an order dated 13.06.2025 passed by the NCLT, New Delhi, wherein parties seeking audience in the proceedings were directed to seek impleadment through an appropriate application. It was stated that despite the availability of such a course, an impleadment application was filed only at a later stage, resulting in adjournment of the matter and delay in the proceedings.

Reliance was placed upon the judgment of the Hon’ble Supreme Court in Mumbai International Airport Pvt. Ltd. v. Regency Convention Centre & Hotels Pvt. Ltd. & Ors., wherein the distinction between a necessary party and a proper party was elaborately discussed. The judgment was cited to emphasize that a necessary party is one in whose absence no effective order can be passed, whereas a proper party is one whose presence may facilitate complete and effective adjudication of all issues involved, although no relief may be sought either by or against such party. It was further highlighted that a person cannot insist upon impleadment merely on the basis of claiming to be a proper party and that impleadment may be declined where it would alter the nature of the proceedings or introduce a new cause of action.

Further reliance was placed on Razia Begum v. Sahebzadi Anwar Begum and the English decision in Moser v. Marsden to draw a distinction between a direct legal interest in the subject matter of litigation and a future contingent commercial interest. The facts of Moser v. Marsden were referred to illustrate that a person having only a possible future commercial interest in the outcome of a proceeding cannot claim to be either a necessary or a proper party merely on that basis. Reference was also made to a judgment of the Hon’ble NCLAT dated 24.07.2025 in Company Appeal (AT) (Ins.) No. 1043 of 2025, wherein a similar distinction between direct interest and contingent commercial interest was stated to have been recognized.

Since no direct reliefs had been sought against the ArcelorMittal group in the present proceedings, they were stated to have been arrayed only as proper parties and not as necessary parties. It was emphasized that the mere fact that a party’s interests may be affected by the outcome of the proceedings does not elevate it to the status of a necessary party. Consequently, while such parties may seek deletion from the array of respondents if they dispute their classification as proper parties, they cannot oppose issuance of notice in that capacity. Reference was also made to applications filed by the ArcelorMittal group before the NCLT, New Delhi and NCLT, Mumbai in August 2025, wherein they were stated to have claimed the status of both necessary and proper parties, which was described as contrary to the distinction sought to be drawn between the two categories. It was ultimately asserted that if such parties continue to oppose issuance of notice despite being arrayed only as proper parties, their names may be deleted from the array of respondents.

A distinction was drawn between the procedure followed before civil courts and proceedings before the NCLT. While acknowledging that service of a copy of the proceedings upon the opposite side prior to issuance of notice is generally contemplated under the NCLT Rules, it was emphasized that such prior service does not automatically confer an unrestricted right of audience upon every respondent or participant in the proceedings. Given the time-bound nature of proceedings under the Insolvency and Bankruptcy Code, 2016 and the Companies Act, 2013, it was asserted that court time is a scarce public resource and cannot be consumed through unlimited pre-notice hearings at the instance of parties seeking audience on every conceivable issue.

The principles of natural justice were stated to require a distinction between the rights of a necessary party and a proper party at the pre-notice stage, as well as a distinction between arguments on questions of law and disputes on questions of fact. Reference was also made to the concept of a demurrer and the juridical principles underlying Order VII Rule 11 of the Code of Civil Procedure. The position advanced was that any audience granted before issuance of notice should ordinarily be confined to issues analogous to those contemplated under Order VII Rule 11 CPC, namely whether the proceedings disclose a cause of action, suffer from defects relating to valuation or court fees, appear to be barred by law, or suffer from similar threshold infirmities warranting rejection rather than dismissal of the proceedings.

Reference was made to Section 424 of the Companies Act, 2013 to emphasize that although the Tribunal is not bound by the procedure prescribed under the Code of Civil Procedure, it nevertheless remains guided by principles of natural justice and must regulate its procedure in a consistent and principled manner. It was argued that freedom from the strict application of the CPC does not imply departure from established principles of adjudicatory jurisprudence or permit procedures to vary arbitrarily between benches, cases, or regions. Reliance was placed upon the observations of the Hon’ble Delhi High Court in Prem Kumar Gupta v. Bank of India, wherein it was observed that a tribunal vested with the power to regulate its own procedure cannot act according to individual preferences or unfettered discretion.

XX. The petitioners gave the details of the 78 respondents in IA No. 4254 of 2025. At the same time, it was reiterated that the Tribunal remains empowered to add or delete parties from the array of respondents as it may deem appropriate. However, any deletion of parties was stated to be subject to the conditions previously set out in IA No. 4254 of 2025, namely that such deletion should not restrict the Tribunal’s ability to grant the reliefs sought, should not subsequently enable the deleted parties to challenge the proceedings on the ground that they were not heard, and should not permit them to later dispute or rebut the facts pleaded in the application. The details of 78 respondents in IA No. 4254 of 2025, given in the present application, reads thus:-

XXI. The applicants in the present application put forth the details of the respondents arrayed in IA No. 5800/2025, which reads thus:-

XXII. Reference was also made to paragraph 17 of IA No. 5800 of 2025, wherein it was reiterated that the Tribunal is empowered to add or delete parties from the array of respondents as it may deem appropriate in the facts and circumstances of the case. However, any deletion of parties was stated to be subject to the conditions previously set out in the application, namely that such deletion should not curtail the Tribunal’s ability to grant the reliefs sought, should not subsequently enable the deleted parties to challenge the proceedings on the ground that they were not afforded an opportunity of hearing, and should not permit them to later dispute or rebut the facts asserted in the application.

XXIII. IA No. 4254 of 2025 was stated to have been filed in or around August 2025 and to involve issues substantially overlapping with those raised in IA No. 2012 of 2025 and IA No. 2693 of 2025. It was pointed out that the issues arising therein had already been considered over a large number of hearings, with the matters having been listed on approximately seventy-nine occasions, seven of which preceded the present challenge. IA No. 5800 of 2025 was stated to have been filed on or about 25.11.2025 and had remained pending for more than six months. The case history downloaded from the website of the Tribunal was relied upon in support of these assertions.

XXIV. A distinction was sought to be drawn between the burden resting upon the applicant at the pre-notice stage and the burden resting upon the respondents. The applicant was stated to be required only to establish a prima facie case on facts and law, whereas the respondents, particularly the necessary parties, were required only to demonstrate the existence of a legal bar preventing the Tribunal from proceeding further or issuing notice, on principles analogous to Order VII Rule 11 of the Code of Civil Procedure. It was further reiterated that a proper party, against whom no direct relief is sought, possesses no independent right to demand a substantive hearing at the pre-notice stage except for seeking deletion from the array of parties.

XXV. A further proposition was advanced that the concepts of a prima facie case and a cause of action are substantially synonymous. On that basis, it was argued that once a cause of action is shown, the existence of a prima facie case necessarily follows.

XXVI. Reference was placed on the order dated 08.08.2025 passed by the Hon’ble President and on the order dated 29.08.2025 passed by this Tribunal, which was stated to have limited the aggregate time available to the respondents for oral submissions. It was asserted that the allocation of approximately twenty minutes per respondent had also been accepted in proceedings before the NCLT, Mumbai Bench and was reflected in the transcripts of hearings held on 24.09.2025 and 14.10.2025. These transcripts were subsequently placed before the Tribunal, and it was pointed out that the only objection raised thereto was that they did not constitute official transcripts. No dispute was stated to have been raised regarding the accuracy or completeness of the contents recorded therein.

XXVII. The objection raised to the transcripts of the proceedings conducted before the NCLT, Mumbai was stated to be confined to the contention that the transcripts were not official transcripts. At the same time, no challenge was stated to have been raised regarding the correctness, completeness, or accuracy of the contents recorded therein.

XXVIII. Reliance was placed on the judgment of the Hon’ble Supreme Court in D.P. Chadha v. Triyugi Narain Mishra, wherein the sanctity of judicial records and proceedings was emphasized. The judgment was referred to for the principle that the record of proceedings maintained by a court is conclusive as to what transpired before it and that any request for correction, modification, or clarification of such record must be made before the same court and the same judicial officer who recorded the proceedings. It was further noted that where a party believes that any event, submission, or development that transpired during a hearing has not been correctly recorded, the appropriate course is to approach the same forum for rectification while the matter remains fresh in the mind of the presiding officer. The judgment was also referred to for the proposition that such rectification may be sought even where the concerned judicial officer has subsequently been transferred.

XXIX. The purpose and scope of oral hearings were also discussed. Reliance was placed on the judgment of the Hon’ble Delhi High Court in DCM Ltd. v. Municipal Corporation of Delhi, wherein the importance of oral hearings was highlighted on the ground that oral exchanges between the Bar and the Bench assist in clarification of issues and enable resolution of doubts that may arise during adjudication. Oral hearings were described as facilitating meaningful dialogue and assisting the adjudicatory process beyond what may be contained in written submissions alone.

XXX. The scope of reliance on judicial precedents not cited during oral arguments was also addressed. A view was advanced that where a court proposes to rely upon a judicial precedent while deciding a matter, the parties should have an opportunity to address the applicability, distinguishability, precedential value, or correctness of such precedent before it forms the basis of the decision. The opportunity to make submissions on such judgments was stated to be an aspect of the principles of natural justice, particularly where the judgment may materially influence the outcome of the proceedings.

XXXI. Reliance was placed upon the decision of the Hon’ble Kerala High Court in Delta Foundations and Constructions, Kochi v. Kerala State Construction Corporation Ltd., wherein reliance upon decisions not cited at the Bar was considered a sufficient ground for review. The principle emerging from the said judgment was stated to be that parties should be afforded an opportunity to address judicial precedents that are proposed to be relied upon against them before a final decision is rendered.

XXXII. Reference was further made to the definition of “civil contempt” under Section 2(b) of the Contempt of Courts Act, 1971 and the definition of “judgment” under Section 2(9) of the Code of Civil Procedure, 1908. The expression “judgment” occurring in the Contempt of Courts Act was discussed in the context of compliance with the principles laid down in judicial decisions. On that basis, a view was expressed regarding the significance of adherence to the ratio of judicial precedents and the consequences that may arise from deliberate disregard of binding judicial pronouncements.

XXXIII. Further reliance was placed on the judgment of the Hon’ble Supreme Court in Girish Mittal v. Parvati V. Sundaram & Anr., wherein observations were made regarding the maintainability of contempt proceedings in cases involving violation of directions of a general nature. The judgment was referred to for the proposition that where directions issued by the Hon’ble Supreme Court are general in character and operate in rem, an aggrieved person may seek appropriate remedies in the event of an alleged violation, irrespective of whether such person was a party to the original proceedings.

XXXIV. The meaning and scope of the expressions “course of judicial proceedings” and “due course of judicial proceedings” were also discussed. A distinction was sought to be drawn between the ordinary progression of proceedings based upon the facts and circumstances of a case and any departure from that progression resulting from external influences or conduct alleged to affect the adjudicatory process. On that basis, submissions were advanced regarding the manner in which certain actions undertaken during the course of the proceedings were alleged to have influenced or interfered with the conduct of the case.

XXXV. The binding nature of judicial precedents and their application by subordinate courts and tribunals was also discussed. Reliance was placed on the judgment of the Hon’ble Supreme Court in United Bank of India v. Abhijit Tea Co. Pvt. Ltd. & Ors. for the proposition that a court is duty-bound to take notice of changes in law and apply the prevailing legal position while adjudicating pending proceedings. Reliance was also placed on the decision of the Hon’ble Delhi High Court in Court on Its Own Motion v. Central Bureau of Investigation, wherein the importance of adherence by subordinate courts to the law declared by superior courts was emphasized as an essential component of the rule of law and judicial discipline.

XXXVI. Another issue identified for consideration related to the scope of proceedings under Section 7 of the Insolvency and Bankruptcy Code and the extent to which the existence of debt and default alone is sufficient for admission of an application. In that context, questions were raised regarding the effect of alleged procedural and jurisdictional defects, including issues relating to service of notice, execution and verification of pleadings, authority of persons instituting proceedings, limitation, authenticity of documents relied upon, and payment of prescribed fees. The further question raised was whether such requirements are mandatory or directory in nature and whether non-compliance can be condoned by the Adjudicating Authority.

XXXVII. The proceedings were also stated to raise questions concerning the distinction between recall of an order admitting a petition under Section 7 and recall of a subsequent order constituting the Committee of Creditors. In that context, consideration was sought on whether challenges directed against the constitution of the Committee of Creditors can survive independently of challenges directed against the original admission order and whether allegations relating to defects in the underlying documents relied upon by a financial creditor have any bearing on such issues.

XXXVIII. Further questions were framed regarding the legal effect of under-stamped and unregistered instruments. These included whether judicial precedents permitting reliance on under-stamped agreements in insolvency proceedings require reconsideration in light of subsequent judgments of the Hon’ble Supreme Court; whether the Adjudicating Authority is under a mandatory obligation to impound an instrument that appears to be insufficiently stamped and forward it to the competent authority under the applicable stamp laws; and whether orders passed on the basis of such instruments are liable to be regarded as orders passed without jurisdiction or merely as orders containing errors in the exercise of jurisdiction.

XXXIX. The distinction between void and voidable orders was also identified as a central issue. Consideration was sought on whether non-compliance with a mandatory statutory condition renders an order a nullity from its inception, or whether such non-compliance merely results in an error capable of correction in appellate or revisional proceedings. These questions were stated to arise in the context of determining the legal consequences of alleged procedural and statutory infirmities affecting the proceedings under consideration.

XL. Additional questions of law were identified concerning the forum and manner in which orders alleged to be without jurisdiction may be challenged. Consideration was sought on whether an order regarded as a nullity, being void ab initio, may be subjected to challenge through collateral proceedings before any competent forum, including by way of recall before the same adjudicating authority, or whether such challenge must necessarily be confined to appellate or revisional remedies exercised within the time and manner prescribed by law.

XLI. Issues were raised as to whether the existence of debt and default alone is sufficient for admission of a petition or whether the Adjudicating Authority is also required to consider whether the underlying agreement is unenforceable by reason of illegality, violation of statutory provisions, public policy considerations, fraud, or other factors contemplated under Section 23 of the Indian Contract Act, 1872.

XLII. Particular emphasis was placed on the effect of alleged violations of the SARFAESI Act in relation to a loan assignment agreement and whether such alleged violations would affect the enforceability of the underlying transaction for the purposes of proceedings under Section 7 of the Code. The issue was framed as one concerning the relationship between the concepts of “debt” and “default” under the Insolvency and Bankruptcy Code and the broader requirement that the obligation sought to be enforced must be legally enforceable.

XLIII. Further questions were raised regarding agreements that may otherwise be valid and enforceable but are alleged to require compulsory registration under Section 17 of the Registration Act, 1908. Consideration was sought on whether, in proceedings under Section 7, the Adjudicating Authority is required to examine the effect of non-registration of such documents and whether the existence of debt and default alone would suffice where the underlying instrument is alleged to be compulsorily registrable but remains unregistered.

XLIV. The issue of premature enforcement of rights under a loan assignment agreement was also identified for consideration. In that regard, reference was made to the legal consequences flowing from payment of deficit stamp duty and penalty and the point in time from which rights under the relevant agreement could be asserted. The applicants sought consideration of the effect, if any, of this issue on subsequent actions and orders, including decisions relating to liquidation, appointment of a liquidator, institution of insolvency proceedings, admission of the Section 7 petition, and approval of the constitution of the Committee of Creditors.

XLV. A distinction was sought to be drawn between issuance of notice and a mandatory direction to file a reply. The position advanced was that an order directing issuance of notice should ordinarily be understood as affording an opportunity to respond rather than imposing an obligation enforceable through contempt proceedings. It was suggested that the consequence of non-participation by a party who has been afforded such opportunity may be the drawing of appropriate inferences in accordance with law.

XLVI. Reliance was further placed on the order dated 24.03.2025 passed by the Hon’ble Supreme Court in K. Vidhya v. CBI, wherein observations were made regarding the purpose and effect of issuance of notice. Particular emphasis was placed on the observation that the object of issuing notice is to secure the presence of a party before the court and that a party which is already represented and actively participating in the proceedings cannot ordinarily claim prejudice solely on the ground that a formal notice has not been issued.

XLVII. The proposition advanced was that the primary purpose of issuance of notice is to bring a party before the court and afford an opportunity of participation in the proceedings. Once a party has already entered appearance, is represented by counsel, and is actively participating in the adjudicatory process, the objective underlying issuance of notice stands substantially fulfilled.

XLVIII. Reliance was further placed on observations made by the Hon’ble Delhi High Court in Swarupi Devi & Ors. v. Suresh Nagar (RFA 209/2013), wherein concern was expressed regarding delays caused when parties who had already received advance service failed to appear, resulting in repeated issuance of notices and consequent adjournments. The observations were referred to in support of the proposition that advance service is intended to facilitate expeditious adjudication and that proceedings need not invariably await a formal order of notice where the concerned parties are already aware of and participating in the matter.

XLIX. Further reference was made to Form NCLT-5, the prescribed format for issuance of notice, to contend that the information communicated through such notice substantially overlaps with the contents of an application already served through advance service. According to the applicants, the only additional information ordinarily conveyed through the notice is the date fixed for appearance before the Tribunal.

L. It was pointed out that where a party has already received advance service of the application and has voluntarily appeared before the Tribunal, such party is already aware of both the contents of the application and the subsequent dates of hearing. On that basis, it was argued that the principal object of a formal notice stands fulfilled once a party has entered appearance and participated in the proceedings.

LI. It was argued that the decision to issue notice ordinarily rests upon a prima facie assessment of the material placed before the Court. Such assessment was stated to involve consideration of the factual assertions made on oath, the legal grounds relied upon, and the nature and reasonableness of the reliefs sought. On that basis, issuance of notice was described as an indication that the matter merits further consideration, without amounting to any final determination on the rights and contentions of the parties.

LII. In light of the material already placed on record, it was contended that the Tribunal was in a position to determine whether the concerned applications were liable to be rejected at the threshold or whether the appearance and participation of the respondents should be treated as sufficient compliance with the requirement of notice, thereby warranting filing of detailed replies on affidavit.

LIII. Despite the various affidavits and submissions already filed, certain core issues raised by the applicant had not been substantively addressed. These issues were stated to concern alleged violations relating to stamp duty, registration requirements, the SARFAESI Act, conditions attached to the concession granted by the Hon’ble Supreme Court under Section 29A of the Code, and provisions of the Companies Act, including matters relating to the Memorandum of Association.

The written submissions are being filed on behalf of Bhubaneswar Expressways Private Limited (“BEPL/ Respondent No. 1”) represented through Ms. Monika Agarwal, Resolution Professional of BEP espousing thus:-

Mr. Vineet Chaudhary, the Liquidator of KSS Petron Private Limited (“Respondent No. 4”), has also filed written submissions pursuant to the Order dated 27.05.2026 passed by this Tribunal. The submissions made on behalf of Respondent No. 4 read thus:-

We have heard the Learned Counsel appearing for the Applicants and the Respondents, perused the averments made in the present application, considered the written submissions filed on behalf of Respondent Nos. 1 and 4 and examined the documents placed on record.

The principal controversy arising for consideration in the present application is whether the Applicants have made out a case for impleadment of the 78 respondents in IA No. 4254/2025 and the 49 respondents in IA No. 5800/2025 as necessary and/or proper parties and for issuance of formal notice to them. Ancillary thereto, the question also arises as to whether the order dated 25.05.2026, whereby notice was directed to be issued only to Respondent Nos. 1 and 2, warrants recall or modification. A further issue requiring consideration is whether this Adjudicating Authority ought to exercise powers analogous to Order I Rule 10(2) of the Code of Civil Procedure, 1908, for striking out or retaining parties and thereafter determining the respondents, if any, to whom notice is required to be issued.

Before adverting to the rival contentions, it would be appropriate to examine the legal principles governing the concepts of necessary and proper parties, as the determination of the issues raised in the present application substantially depends upon the application of these principles. The doctrine of necessary and proper parties is intended to secure effective adjudication of disputes while simultaneously ensuring compliance with the principles of natural justice and avoiding multiplicity of proceedings. The doctrine seeks to balance the rights of persons who may be affected by the outcome of litigation with the need for orderly and efficient administration of justice.

A necessary party is one in whose absence no effective or enforceable order can be passed by the Court or Tribunal. Such a party is indispensable to the adjudication and any decision rendered in its absence would either be ineffective or incapable of complete enforcement. In contrast, a proper party is one whose presence, though not indispensable for passing an effective order, may nevertheless assist the Court or Tribunal in completely, effectively and finally adjudicating upon all questions involved in the proceedings. While the absence of a proper party does not render the proceedings defective, its presence may facilitate comprehensive adjudication and obviate the possibility of subsequent litigation.

In this regard, reference may be made to the judgment of the Hon'ble Bombay High Court in Kalpana Vijaysinh Savant v. Barkha Amir Haldive, 2022 SCC OnLine Bom 11761, wherein the distinction between a necessary party and a proper party has been succinctly explained. The Hon'ble Court observed that a necessary party is one in whose absence no effective decree can be passed, whereas a proper party is one whose presence enables the Court to completely and effectively adjudicate upon the issues involved. Also the Hon'ble Supreme Court in Ramesh Hirachand Kundanmal v. Municipal Corporation of Greater Bombay, (1992) 2 SCC 524, further clarified that a person does not become a necessary or proper party merely because he possesses relevant evidence or may assist the Court in arriving at a correct conclusion. Such a person may at best be a witness. The determinative test is whether the person sought to be impleaded possesses a direct and legally enforceable interest in the subject matter of the proceedings and whether the questions involved can be effectually and completely adjudicated in his absence. The relevant excerpt of the judgement of Kalpana Vijaysinh Savant (ibid) reads thus:-

Having discussed the principles governing necessary and proper parties, it is also necessary to examine the doctrine of dominus litis, upon which considerable emphasis has been placed by the Applicant. The doctrine of dominus litis recognizes the right of a plaintiff or applicant to choose the persons against whom relief is sought and to frame the lis in the manner considered appropriate. However, such right is not unfettered and remains subject to the applicable procedural framework and the satisfaction of the Court that the parties sought to be impleaded possess a direct and substantial interest in the subject matter of the proceedings. In Premanand Gajanan Naik v. Sachit Gajanan Naik, 2014 SCC OnLine Bom 406, the Hon'ble Bombay High Court observed as follows:

The aforesaid principle makes it abundantly clear that the doctrine of dominus litis does not confer an unrestricted right upon a litigant to implead any number of persons as respondents merely because the litigant considers their presence desirable. The mere act of arraying a person as a respondent does not automatically render such person a necessary or proper party. The party seeking impleadment must show that the respondents has a direct, legal and substantial interest in the controversy under consideration and that such presence is necessary for effective and complete adjudication of the issues involved.

Consequently, the Applicant cannot seek impleadment of numerous parties solely on the basis of a perceived connection with the subject matter of the dispute, without establishing how their legal rights are likely to be affected by the outcome of the proceedings or how their presence is indispensable for effective adjudication. The burden to establish such necessity rests upon the Applicant, and the doctrine of dominus litis cannot be invoked to circumvent the requirement of showing the relevance and necessity of each proposed party in the context of the reliefs sought.

We are also not oblivious to the fact that proceedings before the Adjudicating Authority are governed by Section 424 of the Companies Act, 2013, whereby this Tribunal is not strictly bound by the procedure prescribed under the Code of Civil Procedure, 1908 and is guided by the principles of natural justice while regulating its own procedure. Nevertheless, wherever procedural issues arise and no specific provision exists under the Companies Act, 2013, the Insolvency and Bankruptcy Code, 2016 or the Rules framed thereunder, the principles underlying the Code of Civil Procedure may be usefully relied upon for guidance. In this regard, reference may be made to the judgment of the Hon'ble NCLAT in SREI Multiple Asset Investment Trust v. Arcelormittal India Pvt. Ltd. & Ors., (2025) ibclaw.in 543 NCLAT, wherein it was observed that although the provisions of the Code of Civil Procedure do not apply in their strict sense to proceedings before the NCLT and NCLAT, the principles embodied under Order I Rule 10 CPC may be usefully followed while considering applications relating to impleadment of parties. The Hon'ble Appellate Tribunal, after considering the judgments of the Hon'ble Supreme Court in Razia Begum, Ramesh Hirachand Kundanmal, Kasturi and Mumbai International Airport Pvt. Ltd., reiterated that a person seeking impleadment must establish a direct and legal interest in the subject matter of the proceedings and not merely a commercial, indirect or peripheral interest. It was further held that the Court cannot permit adjudication of collateral matters and that impleadment ought not to be allowed where it would unnecessarily widen the scope of the proceedings or introduce issues foreign to the controversy involved. The relevant excerpt of judgement of SREI Multiple Asset Investment Trust (ibid), reads thus:-

Having discussed the legal principles governing impleadment of parties, it would be appropriate to examine the factual backdrop in which the present application has been filed. In this regard, reference may be made to the orders passed by this Adjudicating Authority on 18.02.2026 and 25.05.2026, which form the genesis of the present controversy. The order dated 18.02.2026 reads thus:-

At this juncture, it would also be apposite to refer to the Order dated 25.05.2026. In the said order, this Tribunal took note of its earlier Order dated 18.02.2026, wherein it had been made clear that Respondent Nos. 1 and 2 were on notice and that no formal notice had been issued to any other party. The Tribunal further observed that, in terms of the aforesaid order, which was upheld by the Hon'ble NCLAT vide Order dated 19.03.2026, Respondent Nos. 1 and 2 stood duly notified and the issuance of formal notice could be dispensed with, as both the respondents had been participating in the proceedings. It was also clarified that the primary purpose of issuance and service of notice is to secure the appearance of the concerned parties before the Court and to afford them an opportunity of being heard. Where the parties are already appearing and participating in the proceedings, the requirement of formal service of notice may be waived. The relevant portion of the Order dated 25.05.2026 reads as under:-

From the aforesaid orders, it is clear that Respondent Nos. 1 and 2, namely the Financial Creditor and the Corporate Debtor represented through the Liquidator and the Resolution Professional respectively, are already on notice and have been participating in the proceedings. It was also clarified by this Adjudicating Authority that, although formal notice had not been issued to the remaining respondents, oral submissions made on behalf of any interested party desirous of addressing the Tribunal would be duly considered.

The table of the respondents given by the Applicant in the captioned application has been perused. In IA No. 4254/2025, Respondent Nos. 1 to 12 have been categorized as necessary parties and Respondent Nos. 13 to 78 as proper parties. Similarly, in IA No. 5800/2025, Respondent Nos. 1 to 36 have been categorized as necessary parties and Respondent Nos. 37 to 49 as proper parties.

The mere classification of a party as a necessary party or a proper party by the Applicant cannot be determinative of its legal status. Whether a person is a necessary party or a proper party is a matter which must be examined on settled principles of law. As noticed hereinabove, the Hon'ble NCLAT in SREI Multiple Asset Investment Trust (Supra) has reiterated that a party seeking impleadment must demonstrate a direct and legal interest in the subject matter of the proceedings. Likewise, the Hon'ble Bombay High Court in Kalpana Vijaysinh Savant (Supra) has held that a person cannot be impleaded merely because such person may possess information or material which could assist the Court in arriving at a conclusion. Such a person may, at best, be a witness and not necessarily a party to the proceedings.

Having considered the table in the present application and the nature of the controversy involved in IA No. 4254/2025 and IA No. 5800/2025, we are not persuaded that issuance of formal notice to all the respondents arrayed therein is warranted. Prima facie, a substantial number of such respondents do not appear to possess such direct and legal interest in the subject matter of the proceedings as would necessitate their participation as parties for effective adjudication of the issues involved. Entertaining a request for issuance of notice to all such respondents would unnecessarily enlarge the scope of the proceedings and detract from the summary and time bound nature of adjudication contemplated under the Insolvency and Bankruptcy Code, 2016.

All said and done, as can be seen from the provisions of Section 7(5)(a) of IBC, 2016, while admitting an application, this Tribunal need to be satisfied a default has occurred;(i) the application preferred under sub-section 2 of Section 7 is complete and (ii) no disciplinary proceedings are pending against the Proposed Resolution Professional. The Section 7(5) has been further amended in terms of the provisions of Section 4 of the Insolvency and Bankruptcy Code (Amendment Act 2026). As per explanation 1 to amended sub-section 5, where the requirement under ‘clause a’ of sub-section 5 are met, no other ground shall be considered to reject an application filed under Section 7(1) & (2) of the Code. To satisfy itself about the default, this Tribunal need to look at record of the default recorded with the IU or such other record or evidence of default as may be specified. As per Regulation 2A of IBBI (CIRP) Regulations 2016, for the purposes of ‘clause a’ of sub-section 3 of Section 7 of the Code, the FC may furnish any of the following record or evidence of default:-

Once, on being satisfied about the fulfilment of requirement of sub-section 3 and 5 of Section 7 of IBC, 2016 read with Regulation 2A of IBBI (CIRP) Regulations, 2016, this Tribunal passed an order of admission, the order can neither be recalled nor reviewed. The only remedy in respect of the order can be an appeal before Hon’ble NCLAT. However, if an order is obtained by fraud, the same can be recalled. But the fraud should be with reference to the relevant evidence required to be adduced to establish debt and default. What relation the creditor has with other parties and how the debt emerged may not be an issue which can be looked into by this Tribunal while considering putting a Corporate Debtor back to its feet. In any case, in terms of the provisions of Section 65 of the Code, if any person initiates the Insolvency Resolution Process or liquidation proceedings fraudulently or with maliciously intent for any purpose other than for resolution of insolvency or liquidation as the case may be this tribunal may in addition to dropping the process, also impose penalty upon the person to initiate the process in such manner. For the purpose of establishing the fraud or malicious intention, the Applicants should adduce sufficient evidence on their own and such parties in whose custody the relevant record or documents required to be produced to prove fraud are there cannot be made parties to the proceedings, as witnesses or custodian of documentary evidence are neither proper nor necessary parties to the proceedings. In an application preferred under Section 65 of IBC, 2016, the Financial Creditor, Corporate Debtor and IRP/RP appointed by this Tribunal may be necessary and proper parties. However, if anyone else other than aforementioned three parties are impleaded as party to an application preferred for dropping the CIRP as fraudulent and advance copy is served upon them as per Rule 23(5) of NCLT Rules, 2016, if such parties choose/opt on their own to bring their version on record, irrespective of the ramification of their stand viz. whether it supports the application or oppose it, it would be in the interest of justice and fairness to consider their stand. However, they cannot be subjected to Court notice to participate in the proceedings as litigant or respondents. In the present proceedings this Tribunal has no jurisdiction to comment upon any other issue except regarding the scope of Section 65 of IBC, possibility of recall of admission order and fate of claim of the Operational Creditor. Thus, the scope of the application is examined with reference to the aforementioned issues. It is deemed uncalled for to comment upon any other issues raised in the two applications, the scope of issuance of notice to respondents in which is required to be examined in the present application.

As far as the prayer seeking recall of the order dated 25.05.2026 is concerned, the determination of this issue assumes importance as several consequential reliefs sought in the present application are predicated upon the recall or modification of the said order. It is apposite to refer the judgement of Hon’ble NCLAT in Chandar Narayan Chavan v. M. D. Devcon Pvt. Ltd. and Ors., (2026) ibclaw.in 627 NCLAT, wherein the appellate tribunal settled the principles governing recall of judicial orders. The relevant excerpt of the judgement reads thus:-

In view of the aforesaid judicial pronouncement, it is clear that the power of recall is a limited power and can be exercised only in exceptional circumstances, such as where the order suffers from an inherent lack of jurisdiction, has been obtained by fraud or collusion, has resulted from a mistake of the Court causing prejudice to a party, or where a necessary party was not served and consequently suffered a denial of opportunity.

Examined in light of the aforesaid principles, we find that none of the grounds warranting recall are attracted in the facts of the present case. The order dated 25.05.2026 was passed in exercise of the jurisdiction vested in this Adjudicating Authority after hearing the parties concerned. The said order neither suffers from any jurisdictional infirmity nor is there any allegation, much less any material, demonstrating fraud, collusion, misrepresentation or any procedural defect resulting in failure of justice.

On the contrary, the record reflects that this Adjudicating Authority, by orders dated 18.02.2026 and 25.05.2026, has consistently clarified the position regarding participation of parties in the proceedings. Respondent Nos. 1 and 2 were specifically treated as being on notice, and it was further clarified that although formal notice had not been issued to the remaining respondents, any party interested in addressing the Tribunal would be at liberty to place its stand on record and make submissions. Such liberty flows from Rule 23(5) of the NCLT Rules, 2016 and the principles of natural justice. Accordingly, any respondent desirous of filing a reply or making submissions shall remain at liberty to do so, and any reply or submission already filed or hereafter filed shall be considered on its own merits at the time of adjudication of the concerned applications. The purpose of issuance of notice is to secure the presence of a party before the Court and to afford such party an opportunity of hearing. Where a party is already aware of the proceedings and chooses to participate therein, the insistence on issuance of a formal notice loses much of its significance.

We are, therefore, unable to accept the contention that the order dated 25.05.2026 has resulted in any prejudice warranting its recall. Rather, adequate opportunity has been made available to all concerned parties to place their stand before this Adjudicating Authority.

We are also of the considered view that the mere possibility that a person may be incidentally or remotely affected by the outcome of the proceedings does not, by itself, render such person a necessary or proper party. The test is whether the presence of such person is indispensable for effective and complete adjudication of the issues involved. The issues involved in the said applications can be effectively examined on the basis of the pleadings and submissions already available on record and those that may be filed by parties who choose to participate in the proceedings.

Accordingly, we find no ground either to recall the order dated 25.05.2026 or to issue formal notice to Respondent Nos. 3 to 78 in IA No. 4254/2025 and Respondent Nos. 3 to 49 in IA No. 5800/2025. Nevertheless, it is clarified that any respondent who has been arrayed as a party by the Applicants and who opts to bring on record its stand either in support or in opposition of the IAs viz. IA-4254/2025 and/or IA-5800/2025 may do so. Any such pleadings already brought on record or will be brought on record hereafter shall be taken into account at the time of adjudication of the respective applications. Subject to aforementioned, the application is disposed of. No order as to costs.