2019 (1) TMI 1629 - AT - Insolvency and Bankruptcy

Admissibility of application for intervention - application under section 7 of the I B Code is pending before the Adjudicating Authority (National Company Law Tribunal) since May, 2018 - HELD THAT - In the present case, as we find that the matter is pending since May, 2018, we direct the Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench, Ahmedabad to pass appropriate order on the application u/s 7 immediately not beyond three weeks, after hearing the Financial Creditor (Appellant) and Corporate Debtor. Intervener is not required to be heard at the stage of admission. If the Corporate Debtor intends to settle the matter, then no order be passed. This Appellate Tribunal may pass the order on the application u/s 7 filed by the Appellant after notice to the Corporate Debtor. Appeal disposed off.

Summary

Issues involved:
1. Application for intervention under section 60(5) at the stage of admission.
2. Delay in passing an order of admission under section 7 of the I&B Code.
3. Directing the Adjudicating Authority to pass an order on the application u/s 7.
4. Requirement of hearing the Financial Creditor and Corporate Debtor.
5. Disposal of the appeal with specific directions.

Analysis:
1. The judgment addresses the issue of an application for intervention under section 60(5) at the stage of admission. The counsel for 'IDBI' admitted that no order for admission had been passed, allowing for the consideration of an intervention application. However, since there was no existing order, the Tribunal declined to interfere with the impugned order dated 19.11.2018.

2. The delay in passing an order of admission under section 7 of the I&B Code was highlighted in the case. The Senior Counsel for 'IDBI' pointed out that an application under section 7 had been pending before the Adjudicating Authority since May 2018, with no admission order issued even after nine months. This delay prompted the Tribunal to direct the Adjudicating Authority to promptly decide on the application within three weeks, after hearing both the Financial Creditor (Appellant) and the Corporate Debtor.

3. The judgment further focused on directing the Adjudicating Authority to pass an order on the application u/s 7 without unnecessary delays. Emphasizing the importance of a timely resolution, the Tribunal instructed the Authority to hear the concerned parties and make a decision promptly. Additionally, the intervention of a third party was deemed unnecessary at the stage of admission, unless the Corporate Debtor aimed to settle the matter.

4. Regarding the requirement of hearing the Financial Creditor and Corporate Debtor, the Tribunal stressed the need for a fair hearing and consideration of all relevant parties' perspectives before reaching a decision. The order highlighted the significance of due process and ensuring that all involved parties have the opportunity to present their arguments before a final determination is made.

5. Finally, the judgment concluded by disposing of the appeal with specific directions. The Tribunal outlined the steps to be taken by the Adjudicating Authority and instructed the office to communicate the order to the relevant members of the National Company Law Tribunal. By providing clear directives and ensuring effective communication, the Tribunal aimed to streamline the resolution process and facilitate a prompt decision on the pending application.