The Application filed under Section 7 of the IB code has been admitted by the National Company Law Tribunal. The Corporate Debtor has challenged the said order of admission on the ground that impugned order has been passed in complete disregard to the provisions of Section 7(5)(a) of the I&B Code’, as per which the admission of application under Section 7 is not contemplated in all cases where default has occurred. The discretion vests with the Adjudicating Authority to admit or reject the application, even if the default has occurred, keeping in mind the object of the ‘I&B Code’
The above plea has been rejected by the National Company Law Appellate Tribunal by relying upon the decision of the Hon’ble Apex Court in the case of Innoventive Industries Ltd. v. ICICI Bank Ltd.
It is held by the NCLAT that “if the ‘Financial Creditor’ satisfies all the requirements, the Adjudicating Authority has no discretion to reject the application or defer it unless the ‘Corporate Debtor’ submits that they intend to settle the claim. Only if such request is made to settle the claim, the Adjudicating Authority may give one opportunity to the ‘Corporate Debtor’ to do so instead of admitting the application”
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