Supreme Court: In a review petition filed by Axis Bank against Supreme Court’s judgment in Vidarbha Industries Power Ltd. v. Axis Bank Ltd., (2022) 8 SCC 352, the division bench of Indira Banerjee and J.K. Maheshwari, JJ. has dismissed the review petition and reaffirms that the National Company Law Tribunal (‘NCLT’) under section 7(5) of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) has discretionary power to admit/reject an application.
In the said judgment, it was held that NCLT cannot arbitrarily and in a strait jacket manner admit applications filed under Section 7 of the Code, as the legislative intent of Section 7(5)(a) of the Code confers discretionary power on the NCLT to admit/reject an application of a financial creditor, as the Legislature in its wisdom has chosen to use the expression ‘may’ in the said section.
The main ground for review raised by Axis Bank was that the Court has erred in considering the true import and views of its earlier judgments such as E.S. Krishnamurthy v. Bharath Hi-Tecch Builders (P) Ltd., (2022) 3 SCC 161, wherein it was categorically held that the adjudicating authority must only see whether there is a debt, default and whether the application filed under Section 7 is complete in all aspects or not.
The Court observed that the question of whether Section 7(5) was mandatory or discretionary was not in issue in any of the judgments cited by the applicant and the issue in Krishnamurthy’s case (supra) was, whether the adjudicating authority could foist a settlement on unwilling parties, and that issue was answered in the negative. Thus, there were no grounds for review of the judgment and order.
[Axis Bank Limited v. Vidarbha Industries Power Limited, 2022 SCC OnLine SC 1339, decided on 22.09.2022]
Advocates who appeared in this case:
Senior Advocate K.V. Vishwanathan, Advocate-On-Record Sanjay Kapur, Advocate Megha Karnwal, Advocate Arjun Bhatia, Advocate Rahul Sangwan, Advocate Akhila Nambiar, Advocate Akshata Joshi, Advocate Shubhra Kapur, Solicitor General Tushar Mehta, Advocate-On-Record Sanjay Kapur, Advocate Megha Karnwal, Advocate Arjun Bhatia, Advocate Akshata Joshi, Additional Solicitor General Madhavi Divan, Advocate Vikas Mehta, Advocate Apoorv Khator,Senior Advocate Jaideep Gupta, Advocate Venkatesh, Advocate Kanika Chugh, Advocate-On-Record Nitin Saluja, Advocate Suhael Buttan, Advocate Vikas Maini, Advocate Abhishek Nangia, Advocate Kartikaj Trivedi, Advocate Prateek Sakseria, Advocate Simran Saluja