An Adjudicating Authority is subjectively satisfied as to the existence of Default and in the event of the Section 7 application being complete in all respects, then no other criteria can be looked into by the Adjudicating Authority for admitting an application under the Insolvency Code – Nishit B Patel Shareholder of Peacock Construction Pvt. Ltd. Vs. Good Value Financial Services Pvt. Ltd. – NCLAT New Delhi
NCLAT holds that an Adjudicating Authority is subjectively satisfied as to the existence of Default and in the event of the Section 7 application being complete in all respects, then no other criteria can be looked into by the Adjudicating Authority for admitting an application under the I&B Code. To put it precisely, the function of the Adjudicating Authority is to decide whether the application is complete, whether there is any Debt or Default. An Adjudicating Authority as a first step is to take necessary steps for resolution of the Corporate Debtor. An Adjudicating Authority is not a Court of Law. The proceedings under I&B Code are summary in nature. A Financial Creditor is to establish the existence of the Debt and the Corporate Debtor’s Default. A cumulative reading of Section 7 of the Code alongwith Rule 4(1) of the Insolvency & Bankruptcy (Adjudicating Authority) Rule, 2016 exhibits that the form and manner of the application has to be the one specified.
