Adjudicating Authority is vested with the discretion and is legally bound to consider all relevant aspects, including the financial health and viability of the corporate debtor, while taking a decision on the application filed by the financial creditor – Mango Meadows Agricultural Pleasure Land (Pvt. Ltd.) Vs. Union of India – Kerala High Court
Hon’ble High Court held that recently, in Vidarbha Industries Power Ltd v Axis Bank [2022 SCC OnLine SC 841] (2022) ibclaw.in 91 SC, the Apex Court clearly delineated the legal position and declared that the adjudicating authority should examine the expediency of initiating the CIRP after taking into account all relevant facts and circumstances, including the overall financial help and viability of the corporate debtor. The legal position emanating from the above decisions leaves no room for doubt that the adjudicating authority is vested with the discretion and is legally bound to consider all relevant aspects, including the financial health and viability of the corporate debtor, while taking a decision on the application filed by the financial creditor. As such, the contention that Section 7 is a draconian provision loaded against the corporate debtor, cannot be countenanced. Therefore, the challenge against constitutional validity of section 7 of IBC on the ground that the provision is arbitrary and discriminatory, is liable to be rejected. The writ petition is accordingly dismissed, with the above directions.