No other person has a right to be heard at the stage admission of the application under Section 7 and 9 of the Code including the shareholders or the personal guarantor etc. – Axis Bank Ltd. Vs. Lotus Three Developments Ltd. & Ors. – NCLAT New Delhi
Initiation of CIRP under Section 7 or 9 or 10 of the I&B Code is not an adversary litigation. It is not a recovery proceedings nor can be treated to be a suit or case pending for decision on merit. The Adjudicating Authority on the application filed under Section 7 of the I&B Code is required to consider whether the application is complete or not and if not complete to reject the application. But before rejecting the application, if not complete, time is to be allowed to the applicant to remove the defects.
From the Innoventive Industries Ltd. Vs. ICICI Bank and Ors., decision, it is clear that the Adjudicating Authority is only to satisfy that the default has occurred and that the ‘Corporate Debtor’ is entitled to point out that the default has not been occurred in the sense that the debt is not due. No other person has a right to be heard at the stage admission of the application under Section 7 and 9 of the I&B Code including the ‘shareholders’ or the ‘personal guarantor’ etc.
