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Synopsis

The Supreme Court recently dismissed a review petition filed by Axis Bank challenging the order in the Corporate Insolvency Resolution Process for Vidarbha Industries Power Limited.

A bench of Justice Indira Banerjee (now retired) and Justice JK Maheshwari upheld its order stating that the National Company Law Tribunal cannot arbitrarily and in a strait jacket manner admit applications filed under section 7 of the Insolvency and Bankruptcy Code, 2016 as the legislative intent of section 7 (5) (a) of the Code confers discretionary power on NCLT to admit/reject an application of a Financial Creditor under section 7 of the Code as the legislature in its wisdom has chosen to use the expression ‘may’ in Section 7 (5) (a) of the Code. 

The Axis Bank had argued that the court erred in considering the true import and views of its earlier judgments wherein it was categorically held that the adjudicating authority only has to see whether there is a debt or default and whether the application filed under Section 7 is complete in all aspects or not.

Senior Advocate Jaideep Gupta along with Advocate Venkatesh (Managing Partner), Senior Advocate Suhael Buttan, Advocates Vikas Maini and Abhishek Nangia of SKV Law Offices represented Vidarbha Industries Power Ltd.

The bench while disposing of the Review Petition held that the Judgments cited by Axis Bank did not adjudicate upon the question so raised in the Civil Appeal, i.e., whether Section 7 (5) of the Code was mandatory or discretionary.

Case Title: AXIS BANK LIMITED Vs. VIDARBHA INDUSTRIES POWER LIMITED