Supreme Court: The full bench of Dr. D.Y. Chandrachud C.J., P.S. Narasimha and J.B Pardiwala J.J., issued notice in a civil appeal after taking cognizance of the inconsistent position taken in Vidarbha Industries Power Limited v. Axis Bank Limited, (2022) 8 SCC 352 (‘Vidarbha Industries’) with catena of previous judgments of the Supreme Court such as in Innoventive Industries Limited v. ICICI Bank, (2018) 1 SCC 407 (‘Innoventive Industries’).
In 2022, the Vidarbha Industries had held that the National Company Law Tribunal cannot admit applications filed by the financial creditor under Section 7 of Insolvency and Bankruptcy Code, 2016 (‘The Code’) in a strait jacket manner, as the legislative intent of Section 7(5)(a) of the Code conferred discretionary and not a mandatory power, since the legislature in its wisdom had chosen to use the expression ‘may’ in the said section.
In the review petition of Axis Bank Limited v. Vidarbha Industries Power Limited, (2022) 8 SCC 352, Axis Bank had raised its grievance stating that the Supreme Court had erred in considering its earlier judgements such as E.S. Krishnamurthy v. Bharath Hi-Tecch Builders (P) Ltd., (2022) 3 SCC 161 (‘E.S. Krishnamurthy’) 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 not in consonance with the petitioner had held that there was no ground for review of the Vidarbha Industries (Supra) judgement.
The petitioner, in the present case alleged that the National Company Law Appellate Tribunal had relied upon the decision of Vidarbha Industries, which even though was clarified in review petition of Axis Bank but was still contrary to the settled position in law laid down in Innoventive Industries. Tushar Mehta, Solicitor General contended that the principle enunciated in Vidarbha Industries would be liable to dilute the substratum of the Code.
Therefore, the Court issued notice to the respondents. The matter is further listed for hearing on 06-02-2023.
[Maganlal Daga HUF v. Jag Mohan Daga, 2023 SCC OnLine SC 87, decided on 16-01-2023]
Advocates who appeared in this case:
For the Petitioners: Senior Advocate A.M Singhvi, Senior Advocate Dhruv Mehta, Advocate on Record Aman Raj Gandhi, Advocate Parthasarathy Bose, Advocate Nidhiram Sharma. Advocate Saloni Kumar and Advocate Pranay Tuteja;
For the Respondents: Advocate on Record Anirudh Sanganeria, Advocate Patitha Paban Biswal, Solicitor General Tushar Mehta.
*Simran Singh, Editorial Assistant has put together this brief.