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SUPREME COURT OF INDIA
S.J. Mukhopadhaya Chairperson, Bansi Lal Bhat Member (Judicial)
Vidarbha Industries Power Ltd. – Appellant
Versus
Axis Bank Ltd. – Respondent
Company Appeal (AT) (Insolvency) No. 389 of 2020
For the Appellants/Petitioners: Abhijeet Sinha, Ankur Kashyap, Hasan Murtaza, Alok Kumar
The Adjudicating Authority must consider pending Miscellaneous Applications and allegations of malicious intent under Section 65 of the I&B Code before admitting a Section 7 insolvency application.
Headnote:(A) Insolvency and Bankruptcy Code - Section 7 Application - Adjudication Process - The Adjudicating Authority should consider pending Miscellaneous Applications (MA) filed by the Corporate Debtor before admitting an insolvency application to ensure a fair hearing. (Para 2)
(B) Malicious Initiation of Proceedings - Section 65 - Allegations regarding the intent of the application - When a party alleges that an insolvency application is filed with malicious intent rather than for resolution or liquidation, such claims must be considered by the Adjudicating Authority in accordance with law. (Para 2)
Issues: Whether the Adjudicating Authority can admit a Section 7 application without considering a pending Miscellaneous Application filed by the Corporate Debtor.
Legal Category Hierarchy
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insolvency and bankruptcy
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insolvency resolution and liquidation
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initiation of corporate insolvency resolution process
- application by financial creditor under section 7
- admission of application
- miscellaneous application
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application with malicious intent
- penal action under section 65
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initiation of corporate insolvency resolution process
-
appellate tribunal
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appellate jurisdiction
- appeal against interlocutory order
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appellate jurisdiction
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insolvency resolution and liquidation
O R D E R
04.03.2020
Axis Bank Ltd. has moved an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short the 'I&B Code') against Vidarbha Industries Power Limited ('Corporate Debtor' - Appellant herein). The matter is pending consideration and posted for hearing today, i.e., on 4th March, 2020. In the said case, the Appellant has moved a Miscellaneous Application (MA), which has not been ordered to be listed on 4th March, 2020 by the impugned order dated 13th February, 2020 passed by the Adjudicating Authority (National Company Law Tribunal), Court -5, Mumbai Bench, Mumbai.
Learned Counsel for the Appellant submits that the Adjudicating Authority should not admit the Application under Section 7 filed by the Axis Bank Ltd. without hearing the MA filed by the Appellant herein. Learned Counsel for the Appellant further submits that the Axis Bank Ltd. has moved before the Appropriate Forum and the matter is pending and the application under Section 7 of the I&B Code has been filed with malicious intent not for 'Resolution' or 'Liquidation' and thereby calls for penal action under Section 65 of the I&B Code.
In the present case, as we find that no specific order has been passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, we are not inclined to make any observation with regard to claims and counter claims of the parties. The Appellant is given liberty to raise the issue before the Adjudicating Authority as raised before this Appellate Tribunal as noted above. The Adjudicating Authority will consider the same in accordance with law after notice to the parties. However, in the meantime, if any order is passed by the Adjudicating Authority without considering the stand taken in the MA by the Appellant herein, it will be open to the Appellant to move before this Appellate Tribunal against such order.
The Appeal stands disposed of.
