2023 (11) TMI 110 - AT - Insolvency and Bankruptcy

Admissibility of section 7 application - time limitation - HELD THAT - The Adjudicating Authority did not commit any error in allowing the Amendment Application permitting the State Bank of India to amend the Part IV of Form-1 in so far as date of default is concerned - With regard to the observation made in Para 12, it is observed that it was for the purposes of allowing the Amendment Application. At the time of hearing of the Section 7 application filed by the State Bank of India, the Adjudicating Authority shall consider the submissions of the parties on the question of limitation being uninfluenced by any observation made while allowing the Amendment Application. With these observations, the appeal is disposed off.

Summary

Issues involved:
Condonation of delay in filing the appeal, Amendment application for date of default in Section 7 application, Observations made by Adjudicating Authority regarding limitation in Amendment Application.

Condonation of delay in filing the appeal:
An application (I.A. No. 5026 of 2023) was filed for condonation of a 15-day delay in filing the appeal. The reason cited for the delay was the need to review records from the Adjudicating Authority and collate DRT proceedings from Nagpur. The delay was deemed sufficient and condoned, leading to the disposal of the application.

Amendment application for date of default in Section 7 application:
The appeal was filed against an order deciding on two amendment applications (I.A. No.127/CB/2023 and I.A. No.187/CB/2023) related to a Section 7 application by the State Bank of India. The State Bank of India sought to amend the date of default in the application, which was allowed by the Adjudicating Authority. The Corporate Debtor also filed an application praying for rejection of the State Bank's amendment. The Adjudicating Authority permitted the amendment and allowed the amended Part IV of Form-1 to be considered.

Observations made by Adjudicating Authority regarding limitation in Amendment Application:
The Appellant challenged the order, arguing that the Adjudicating Authority prematurely expressed an opinion on the limitation of the Section 7 application during the amendment process. The Respondent contended that the Corporate Debtor initiated the discussion on limitation, justifying the Authority's observations. The Tribunal found no error in allowing the Amendment Application but emphasized that the question of limitation should be addressed separately during the Section 7 application hearing, unaffected by previous observations. The Appellant was granted permission to file an Additional Reply to the amended application within one week.