Punjab National Bank Vs Aban Offshore Ltd (NCLT Chennai)
NCLT Chennai held that discretionary power on NCLT u/s. 7(5)(a) of the Insolvency and Bankruptcy Code cannot be used to impel financial creditor to consider settlement proposed by Corporate Debtor. Accordingly, CIRP against Aban Offshore Limited admitted.
Facts- This petition has been filed by Punjab National Bank, financial creditor on 21.08.2024 under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 through Mr. C.J. Ranjith , Chief Manager for initiating Corporate Insolvency Resolution Process in respect of Aban Offshore Limited, the Corporate Debtor (CD).
Conclusion- The current position of law is that while there exists some level of discretion vested on the Adjudicating Authority under Section 7(5)(a), the same must be exercised cautiously. Such discretionary power cannot be used to impel the financial creditor to consider the settlement proposed by the Corporate Debtor.
Held that in view of the fact the ‘financial debt’ is proved by the Financial Creditor and the ‘default’ having been committed on the part of the Corporate Debtor, this Tribunal admits the present petition and initiates the Corporate Insolvency Resolution Process in relation to the Corporate Debtor viz., Aban Offshore Limited.
