2020 (12) TMI 454 - AT - Insolvency and Bankruptcy

De-reserving/ reopening the matter for further hearing - Section 10 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - It is manifestly evident that the procedure adopted by the Adjudicating Authority does not conform to the provisions of law under the I B Code . Applications under Sections 7, 9 10 are required to be disposed of by admitting or rejecting the same within 14 days of filing. It appears that the Adjudicating Authority has adopted the procedure which runs parallel to the statutory provisions and despite reserving the order, the matter has been practically reopened on the ground of further clarification. The impugned order is couched in ambiguous terms as it does not specify what clarification is to be sought from the Appellant. The matter has been adjourned for 17th December, 2020 overlooking the statutory requirements of passing an order of admission or rejection of application within the prescribed time limit of 14 days. Appeal disposed off.

Summary

Issues involved:
Improper procedure followed by Adjudicating Authority in an insolvency matter under the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

The judgment delivered by the National Company Law Appellate Tribunal, New Delhi, addressed the issue of procedural irregularities in an insolvency matter under the Insolvency and Bankruptcy Code, 2016. The Appellate Tribunal noted that the Adjudicating Authority had reserved the Appellant's application under Section 10 of the I&B Code for orders but subsequently adjourned the matter for further clarification, effectively de-reserving and reopening the case. This action was deemed to be in violation of the statutory provisions of the I&B Code, which mandate that applications under Sections 7, 9, and 10 must be disposed of within 14 days of filing.

The judgment highlighted that the Adjudicating Authority's actions were not in line with the prescribed procedures under the I&B Code. Despite reserving the order, the matter was reopened for further hearing, deviating from the statutory requirement of disposing of applications within the stipulated time frame. The impugned order was criticized for its ambiguity in failing to specify the nature of clarification required from the Appellant, resulting in a procedural lapse.

In light of these procedural irregularities, the Appellate Tribunal directed the Adjudicating Authority to expedite the resolution of the matter. The Tribunal ordered the Adjudicating Authority to prepone and list the case promptly, ensuring that a decision on the application is made based on merit within one week from the date of the judgment. This directive aimed to uphold the principles of timely disposal of insolvency applications as mandated by the I&B Code.

The judgment concluded by instructing that a copy of the order be communicated to the Adjudicating Authority, emphasizing the importance of adhering to the statutory requirements and procedural fairness in insolvency proceedings. The decision underscored the significance of following the prescribed timelines and procedures outlined in the I&B Code to maintain the integrity and efficiency of the insolvency resolution process.