High Time Adjudicators Discard 'Heavens Would Not Fall' Approach, Deferment Of Each Day Matters: Delhi High Court

The Delhi High Court has observed that it is high time the adjudicators shift paradigm and discard the “heavens would not fall” approach, underscoring that each day's deferment, unless unavoidable, matters.

Justice Girish Kathpalia was dealing with a plea filed by Parsvnath Developers Limited, a Corporate Debtor, challenging an order passed by the National Company Law Tribunal (NCLT) allowing the application filed by the Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code for revival of the Company Petition.

It was Parsvnath's case that the impugned order for revival of the Company Petition was passed in violation of principles of natural justice to the extent that it was not granted an opportunity to file formal reply to the application.

Its counsel submitted that the impugned order was not sustainable because had the company been given opportunity to file formal reply, the same would have established that there was complete and concluded settlement of the dispute.

Parsvnath's counsel concluded the arguments, submitting that the impugned order must be set aside granting opportunity to the company to file a formal reply to the application under Section 7 of the IBC as “heavens would not fall” if a fair opportunity to file formal reply was granted.

On the other hand, the counsel representing the Financial Creditor strongly supported the impugned order.

It was submitted that there was no violation of any principles of natural justice insofar as Parsvnath was heard at length by the NCLT before passing the impugned order.

Dismissing the plea, the Court noted that notice of revival proceedings on the application was duly served on Parsvnath, directing that reply, if any, may be filed within one week, which would follow rejoinder, if any, before the next date.

“Also admittedly, despite service of the said notice of NCLT on 01.08.2025, neither reply to the application under Section 7 of the Code nor even any application seeking enlargement of time to file reply to the application was filed by the present petitioner till 20.08.2025,” the Court said.

On the “heavens would not fall argument”, Justice Kathpalia said:

“Coming to the “heavens would not fall” argument of learned counsel for petitioner, it is high time, the adjudicators shift paradigm, discarding the “heavens would not fall” approach. Deferment, unless unavoidable of each day matters.”

It added that notice of the application under Section 7 of the IBC was duly served on the Prasvnath and the impugned order after detailed arguments was passed.

“Where the court comes to a conclusion that the defaulting party is deliberately protracting the proceedings in one or the other manner with the intention to frustrate the other party into abandoning the lis, “heavens would certainly fall”. The learned NCLT in the impugned order has narrated in detail the entire record of the dispute, reflecting that somehow the proceedings were being protracted,” the Court said.

It added that not even a whiff of reason was advanced by counsel for Parsvnath for not having preferred an appeal against the impugned order.

Observing that it is only a matter of self-restraint for the High Court where despite availability of appellate remedy, a litigant seeks to invoke supervisory jurisdiction, the Court said:

“But the petitioners should at least spell out a reason for not having availed appellate remedy, which has wider scope, as compared to the supervisory jurisdiction. The absence of such reasoning gives credence to the stand taken by the Corporate Creditor that the petitioner is trying to protract proceedings by leaving scope of further delay in the matter by approaching NCLAT, if this petition is rejected.”

Counsel for Petitioner: Mr. Tanmay Mehta, Mr. Manoranjan Sharma, Mr. Arpit Dwivedi and Ms. Sakshi Kapoor, Advocates

Counsel for Respondents: Mr. Rajiv Nayar, Senior Advocate with Mrs. Meghna Mishra, Mr. Karan Luthra, Mr. Siddharth Joshi, Ms. Ujjwala Gupta and Mr. Shubham Madan, Advocates

Title: PARSVNATH DEVELOPERS LIMITED v. UNION OF INDIA & ANR

Citation: 2025 LiveLaw (Del) 1166

Click here to read order