Corporate Law

SC on Adjudicating Authority have Discretionary power to admit application of Financial Creditor for initiation of CIRP: SC

By Editor Corporate Law Judiciary July 16, 2022

TaxGuru Citation: 2022 taxguru.in 3188
Case Name: Vidarbha Industries Power Limited Vs Axis Bank Limited (Supreme Court of India)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: Supreme Court of India

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Vidarbha Industries Power Limited Vs Axis Bank Limited (Supreme Court of India)

Insolvency and Bankruptcy Board of India

7th Floor, Mayur Bhawan, Connaught Place, New Delhi – 110001

14^th July, 2022

Subject: Judgment¹ dated 12^th July, 2022 of the Hon’ble SC in the matter Vidarbha Industries Power Limited Vs. Axis Bank Limited [Civil appeal No. 4633 of 2021].

The Hon’ble Supreme Court vide its order dated 12^th July, 2022 held that section 7(5)(a) of Insolvency and Bankruptcy Code, 2016 (the Code), confers discretionary power on the Adjudicating Authority (AA) to admit an application of a Financial Creditor (FC) under section 7 of the Code for initiation of Corporate Insolvency Resolution Process (CIRP). The Hon’ble SC made some important findings and observations as under:

Sl. No.

Subject / Issue

Ruling

Para / Page No.

Objectives of the Code

(a) The framework that had existed prior to the Code, for insolvency and bankruptcy was inadequate, ineffective and resulted in undue delay.

(b) The new Insolvency and Bankruptcy framework has been designed, inter alia, to facilitate the assessment of viability of an enterprise at a very early stage, and to ensure a time bound Insolvency Resolution Process to preserve the economic value of the enterprise.

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