Adjudicating Authority May Decide Section 7 Application Maintainability Separately: NCLAT
- Case Name: Pioneer Urban Land & Infrastructure Ltd. vs. Presidia Residents Welfare Assn.
- Judge(s): Justices Mr. Ashok Bhushan, Mr. Arun Baroka
- Advocate(s): Mr. Nikhil Nayyar, Mr. Vivek Kumar
The NCLAT New Delhi bench ruled that the maintainability of a Section 7 application under the Insolvency and Bankruptcy Code can be decided separately or alongside substantive issues, as per the Adjudicating Authority’s discretion.
The corporate debtor appealed against the NCLT order, which upheld the application’s maintainability, arguing that deciding other merits precluded further objections.
The NCLAT held that the Adjudicating Authority was not obligated to address maintainability separately but clarified that other issues like debt and default remain open for arguments.
It directed the Adjudicating Authority to decide these issues on merits after providing both parties an opportunity to present evidence.
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