Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 2016 Insolvency and Bankruptcy Code |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Insolvency and Bankruptcy Code, 2016 (31 of 2016) |
Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Insolvency and Bankruptcy Code, 2016: s. 7 – Initiation of Corporate Insolvency Resolution Process by financial creditor – On facts, respondent defaulted in making re-payment of an amount of Rs 33 crores to the appellants – Petition u/s. 7 instituted by the appellants against respondents – Adjudicating Authority-NCLT declined to admit the petition and directed the respondent to settle all the remaining claims within three months – Appeal there against dismissed by the Appellate Authority-National Company Law Appellate Tribunal – On appeal, held: Order of the Adjudicating Authority, and the directions issued, suffered from an abdication of jurisdiction – Adjudicating Authority acted outside the terms of its jurisdiction u/s. 7(5) – Adjudicating Authority cannot compel a party to the proceedings before it to settle a dispute – Such a course of action is not contemplated by the IBC – While, adjudicating Authority and Appellate Authority can encourage settlements, they cannot direct them by acting as courts of equity – Adjudicating Authority is empowered only to verify whether a default has occurred or not – Based thereupon, the Adjudicating Authority must then either admit or reject an application – These are the only two courses of action which are open to the Adjudicating Authority in accordance with s. 7(5) – Furthermore, the Appellate Authority sought to make a distinction by observing that the directions of the Adjudicating Authority were at the ‘pre-admission stage’, and that the order was not of such a nature which was prejudicial to the rights and interest of the stakeholders – Also, settlement has not been arrived at by the respondents with the appellants – Observation that the appeal was not maintainable is erroneous – Order passed by the NCLAT and NCLT set aside – Proceedings to be restored back to the adjudicating authority for afresh consideration.s. 7 – Corporate Insolvency Resolution Process under – Scope and jurisdiction of the powers of the Adjudicating authority – Discussed. |
Judge | Hon'ble Dr. Justice D.Y. Chandrachud |
Neutral Citation | 2021 INSC 884 |
Petitioner | E S Krishnamurthy & Ors. |
Respondent | M/s Bharath Hi Tech Builders Pvt. Ltd. |
SCR | [2021] 12 S.C.R. 28 |
Judgement Date | 2021-12-14 |
Case Number | 3325 |
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