TMI Blog2019 (8) TMI 1867X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise. From the plain reading of Section 7 of IBC it is clear that the Adjudicating Authority, on being satisfied and if the application is complete, after notice and hearing the Corporate Debtor, may either admit the application or reject it. The Hon ble Supreme Court also noticed the aforesaid mandate of law. In that view of the matter, there is no requirement for intervention of any Directors or shareholders of the Financial Creditor or any other party before admission of Application under Section 7 of IBC. If the application is admitted, it would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion without impleading them as party. 3. We have heard the learned Counsels for the Appellant/ Financial Creditor and Respondent. Objection has been raised as to how the Application under Section 7 of IBC is to be dealt with. How the Adjudicating Authority should consider the matter at the stage of admission fell for consideration of Hon ble Supreme Court in Innoventive Industries Ltd. Vs. ICICI Bank and Anr. (2018)1 SCC 407, when the Hon ble Supreme Court observed: 27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning nonpayment of a deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in part III, particulars of the financial debt in part IV and documents, records and evidence of default in part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate debtor can, within a period of 10 days of receipt of the demand notice or copy of the invoice mentioned in subsection (1), bring to the notice of the operational creditor the existence of a dispute or the record of the pendency of a suit or arbitration proceedings, which is pre-existing i.e. before such notice or invoice was received by the corporate debtor. The moment there is existence of such a dispute, the operational creditor gets out of the clutches of the Code. 30. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to sati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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