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2017 (6) TMI 254 - AT - Insolvency and BankruptcyInitiation of insolvency resolution process - Incomplete application - Held that:- As a judicial authority, in case the application is incomplete, it is also empowered to decide whether to grant 7 days' time to rectify the defects. In case the applications are admitted and resolution process starts, the Adjudicating Authority is required to pass judicial order under sections 13 and 14 of the 'Code' and may order for public announcement in terms section 15 and then to oversee the resolution process and finally, if so required, to pass order for liquidation. The time period of 14 days prescribed under sub-section (4) of section 7, sub-section (5) of section 9 and sub-section (4) of section 10 are to be counted from the date of receipt of application. The word 'date of receipt of application' cannot be treated to be 'date of filing of the application'. We have noticed that the Registry is required to find out whether the application is in proper form and accompanied with such fees as may be prescribed. So, the Registry will take certain time and during such period, the applications are not brought to the notice of the 'Adjudicating Authority'. Therefore, 14 days' period granted to the Adjudicating Authority under the provisions of the Code cannot be counted from the 'date of filing of the application' but from the date when such application is presented before the Adjudicating Authority i.e. 'the date on which it is listed for admission/order. In the present scenario, the Insolvency Bankruptcy Code do not bar or render the Adjudicating Authority powerless to admit an application or rejecting the application. We hold that the proviso to sub-section (5) of section 7 or proviso to sub-section (5) of section 9 or proviso to sub-section (4) of section 10 to remove the defect within 7 days are mandatory, and on failure applications are fit to be rejected. Further, we find that the application was defective, and for the said reason the application was not admitted within the specified time. Even if it is presumed that 7 days additional days time was to be granted to the operational creditor, the defects having pointed out on 16th February 2017 and having not taken care within time, we hold that the petition under section 9 filed by respondent/operational creditor being incomplete was fit to be rejected. For the reasons aforesaid, we direct the Adjudicating Authority to reject and close the Petition preferred by Respondents. After we reserved the judgment if any order has been passed by the Adjudicating Authority, except order of dismissal, if any, are also declared illegal.
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