Only two alternative courses of action are available to Adjudicating Authority under Sec. 7(5) of IBC which is to either admit the application u/s 7(5)(a) or reject the petition u/s 7(5)(b) – Sudhir Darode Suspended Director, Darode Jog Realties Pvt. Ltd Vs. ICICI Bank Ltd. and Anr. – NCLAT New Delhi
January 27, 2024
In the appeal against Sec. 7 application, Hon’ble NCLAT holds that the Hon’ble Apex Court in the case of Innoventive Industries Ltd. v. ICICI Bank & Anr. (2017) ibclaw.in 02 SC, has laid down the guiding principles to admit or reject an application filed under Section 7 of the IBC. Under the ambit of Section 7 of the Code, the Adjudicating Authority is to only determine whether a default has occurred and whether the debt, which may still be disputed, was due and remained unpaid. It is a well settled proposition of law that only two alternative courses of action are available to the Adjudicating Authority under Section 7(5) of the IBC which is to either admit the application under Section 7(5)(a) or reject the petition under Section 7(5)(b). The moment the Adjudicating Authority is satisfied that a default has occurred, the Application is to be admitted unless it is incomplete.