Aditya Birla Finance Ltd vs Sintex Prefab And Infra Ltd

Aditya Birla Finance Ltd. ...Appellant

Versus

Sintex Prefab and Infra Ltd. ...Respondent

Present: For Appellant: Mr. Gopal Jain, Sr. Advocate with Mr. R. Sudhinder, Mr. Ranjit Shetty, Ms. Astha, Mr. Luckyraj Indorkar, Ms. Ekta Bhasin and Ms. Himani Chabra, Advocates. For Respondent:

ORDER

(Through Virtual Mode)

22.02.2021: Heard Shri Gopal Jain, Senior Advocate representing the Appellant.

2. It is brought to our notice that the application under Section 7 of the

Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'I&B Code') is

pending at the pre-admission stage before the Adjudicating Authority (National

Company Law Tribunal) Ahmedabad Bench Ahmedabad Court No. 2 which in

terms of impugned order dated 12th January, 2021 has listed the matter for 'final

hearing'. The application is stated to be pending since July, 2020. It is not

understandable as to how it can be listed for 'final hearing' at the pre-admission

stage. All that the Adjudicating Authority was required to do was to ascertain

Cont'd....../ -2-

existence of debt and default within 14 days from the receipt of application as

mandated under Section 7(4) of I&B Code and on being satisfied that there is debt

and default and the application is complete, the Adjudicating Authority was

required to pass order of admission of the application on merit.

3. This view has already been taken by this Appellate Tribunal in "The South

Indian Bank Ltd. vs. Gold View Vyapaar Pvt. Ltd., Company Appeal (AT)

(Insolvency) No. 40 of 2021 decided on 3rd February, 2021". The extract

thereof is reproduced hereinbelow:-

"2. After hearing Mr. Raghav Chadha, Advocate for the Appellant,

we find that the application under Section 7 has been filed in

December, 2019 and time has been granted to Respondents to file

reply umpteen times, three weeks' time granted in terms of the

impugned order being as a last chance. This approach cannot be

supported as the Adjudicating Authority is statutorily bound to pass

an order of admission or rejection on being satisfied in respect of debt,

default and completeness of the application within 14 days from the

date of filing of such application. It appears that the matter is now

fixed for 18th February, 2021 "for final hearing" which appears to be

based on a wrong premise as pre-admission hearing with limited

notice to the Corporate Debtor is only to derive satisfaction in regard

Company Appeal (AT) (Insolvency) No. 121 of 2021 -3-

to the existence of debt, occurrence of default and completeness of the

application. On being satisfied, the Adjudicating Authority is required

to pass an order of admission. Therefore, it can safely be stated that

no final hearing was postulated at pre-admission stage. The

Adjudicating Authority will be well advised to be alive to the

phraseology/ terminology to be employed at different stages of the

CIRP proceedings and not give impression of a final hearing at the

pre-admission stage. Be that as it may, now looking to the fact that

the matter is posted for 18th February, 2021, we expect the

Adjudicating Authority to address the issue at the pre-admission

stage and pass an order of admission or rejection as warranted

without granting any adjournment."

4. In view of the aforesaid, we dispose off this appeal by directing the

Adjudicating Authority to address the issue at pre-admission stage with utmost

expedition, preferably within one week and pass an order of admission or

otherwise as warranted under law without adjourning the matter. Copy of this

order be communicated to the Adjudicating Authority.

[Justice Bansi Lal Bhat] Acting Chairperson

[Dr. Ashok Kumar Mishra] Member (Technical) am/gc

Company Appeal (AT) (Insolvency) No. 121 of 2021