Documents Not Filed Before NCLT Cannot Be Entertained As Evidence By NCLAT For Deciding Appeal: NCLAT Chennai

The CIRP of the corporate debtor was initiated, and due to the failure to receive the resolution plan, a liquidation order was passed by the NCLT Kochi. The liquidator was appointed, who discovered that certain transactions were allegedly designed to siphon off funds. Therefore, the liquidator filed an application under section 66(1) of the IBC to recover the amount of Rs. 1.2 Cr. from the suspended directors.

The NCLT found the directors guilty of fraudulent transactions and admitted the liquidator's application. Therefore, against the impugned order, the present appeal was preferred.

The directors contended that the liquidator has not produced sufficient evidence to prove that the directors acted with the intent to defraud the creditors or had committed fraudulent transactions. Relying on the rulings of Jayesh Sanghrajka v. Divine Investments MA/1061/201946, it was contended that in the absence of a forensic audit report, the transactions could not be declared void.

Further, it was argued that the NCLT didn't provide ample opportunity to produce all the evidence.

Per contra, the respondent argued that the directors misrepresented before the former RP that the vehicle was scrapped; instead, it was actually sold by them. This itself establishes the fraudulent intentions.

Further, it argued that the directors didn't request NCLT to provide time to produce the documents, which they are producing for the first time before this tribunal.

The NCLAT discussed the ruling of Union of India v. Ibrahim Uddin & Another, (2012) 8 SCC 148, where the new documents that were sought to be produced for the first time for appreciation were the documents that were available during the proceedings before the learned NCLT, and yet they were not filed by the appellants.

In the said judgment the same documents were not entertained by the appellate tribunal, as they don't fall under any of the exceptions culled out under Order 41 Rule 27 of CPC, the principles of which would be appreciated as per subsection 2 of Section 424 of the Companies Act, 2013.

With the above observations, the NCLAT upheld the NCLT's decision.

Case Name: Anish Lawrence & Anr. v. Mr. Renahan Vamakesan, Liquidator of Axiomata Elevators Pvt. Ltd

Case No.: Company Appeal (AT) (CH) (Ins) No.377/2023 (IA No.1150/2023)

For Appellate: Mr. M. Krishna Dath, Advocate For Mr. MS. Viswanathan, Advocate

For Respondent: Mr. Chandramouli Prabhakar, Advocate

Coram: Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical),

Judgment Date: 23.09.2025