NCLAT Rejects Repeat Insolvency Filing: Cites Limitation Bar and Res Judicata [Read Order]

The National Company Law Appellate Tribunal (NCLAT) has upheld the dismissal of a personal insolvency application filed under Section 94 of the Insolvency and Bankruptcy Code, 2016, reiterating that once an application has been rejected on merits, refiling the same matter under the name of correcting typographical errors is impermissible.

In the appeal, the applicant, Saurabh Premprakash Chugh had challenged the order of the Adjudicating Authority dated February 24, 2025, by which his Section 94 application was dismissed. The tribunal noted that the appellant had already filed a similar application earlier which had been rejected on January 9, 2025, after finding inconsistencies in the date of default and invocation of guarantees, as well as an apparent attempt to extend the limitation period improperly.

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According to the earlier NCLT order, the applicant had misrepresented the due dates of debt in order to bring the application within the limitation period. While the loan was originally defaulted in 2016, and demand notices were served in 2017 and 2018, the applicant claimed that default occurred only in 2020 and again stated a different date which is December 28, 2024, within the application. The tribunal found this to be misleading, with the intention of securing interim moratorium relief.

The Adjudicating Authority had clearly recorded that the contradictions in the default dates and the failure to produce relevant documents, including the guarantee deed or the original demand notices, rendered the application both barred by limitation and factually inconsistent.

Despite this dismissal, the appellant filed a fresh application under Section 94, arguing that the new filing was necessary to correct earlier typographical mistakes. The NCLAT held that a dismissal on merits bars refiling of the same matter, and typographical errors could not be the basis for filing a fresh application. The tribunal observed that the subsequent filing amounted to an abuse of the process, especially since the underlying cause of action and grounds remained identical.

The Appellate Bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member – Technical), concluded that when the earlier application was dismissed on merits... it was not open for the appellant to file a fresh application under Section 94. Correction of any typographical error... is inconsequential. As a result the Appeal was dismissed.

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