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2023 (11) TMI 832 - AT - Insolvency and BankruptcyPrayer for clarification of the judgment dated 11.09.2023 - Rejection of Section 7 application - HELD THAT - The order dated 11.09.2023 does not preclude the Adjudicating Authority to consider the prayer of the Corporate Debtor if it is ready to pay the entire debt along with the interest to the Operational Creditor. It is open for the Adjudicating Authority to consider any such offer and if the entire debt is liquidated there may not be any necessity to admit Section 7 application. The Appellant submits that this application for clarification is not maintainable. The application is filed under Rule 11 of the NCLAT Rules, 2016, the application for clarification of the judgment can very well be entertained in exercise of power under Rule 11 and the submission of the Appellant that application is not maintainable cannot be accepted. Application disposed off.
Issues involved:
The issues involved in the judgment are the clarification of a previous order regarding the time period for a Corporate Debtor to tender the defaulted amount to a Financial Creditor, and the authority of the Adjudicating Authority to consider the Corporate Debtor's offer to liquidate the entire debt to an Operational Creditor. Issue 1: Clarification of Time Period for Defaulted Amount The Corporate Debtor filed an application seeking clarification of a previous judgment to extend the time period of 30 days mentioned in the order dated 11.09.2023 until the decision of the present application. The Corporate Debtor prayed for the order to be clarified so that it does not prevent them from tendering the entire defaulted amount to the Financial Creditor or hinder the Adjudicating Authority from passing appropriate orders if the defaulted amount is tendered. The Tribunal, in its judgment dated 11.09.2023, had allowed the Company Appeal and directed the Adjudicating Authority to admit the Section 7 application within 30 days from the pronouncement of the order. However, the Corporate Debtor requested clarification on the scope of the order to ensure flexibility in dealing with the defaulted amount. Issue 2: Authority of Adjudicating Authority to Consider Debt Liquidation Offer The Corporate Debtor, in a separate application, stated their readiness to liquidate the entire debt owed to the Operational Creditor and offered to make the payment by Bank Draft, which was not accepted. The Corporate Debtor requested the Tribunal to issue a clarification regarding the previous order, emphasizing that if the entire debt is paid, there might not be a need to admit the Section 7 application. The Tribunal clarified that its previous order did not prevent the Adjudicating Authority from considering the Corporate Debtor's offer to pay the entire debt along with interest to the Operational Creditor. The Adjudicating Authority retained the discretion to evaluate such offers, and if the debt is fully liquidated, there might be no requirement to proceed with admitting the Section 7 application. In conclusion, the National Company Law Appellate Tribunal, Principal Bench, New Delhi, addressed the Corporate Debtor's application for clarification regarding the time period for tendering the defaulted amount and the Adjudicating Authority's discretion in considering offers to liquidate debts. The Tribunal clarified the scope of its previous order and upheld the Adjudicating Authority's authority to assess debt repayment offers, ultimately disposing of the application while maintaining the original directions issued in paragraph 33 of the judgment.
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