New Delhi: In an important decision Insolvency and Bankruptcy Code (IBC), Supreme court ruled on Tuesday that the National Company Law Tribunal (NCLT) to the creditors a . have no right to ask to settle with Guilty Though it has the power to either dismiss it summarily or consider the arguments for the commencement of insolvency proceedings,
A bench of Justices DY Chandrachud and AS Bopanna concurred with the submission of advocate Srijan Sinha, appearing for several investors who had filed bankruptcy proceedings against realtor Bharat Hitech Builders, saying, “The IBC is a complete code in itself. The Jurisdictional Authority (NCLT) and the Appellate Authority (NCLAT) are the creatures of law. Their jurisdiction is statutorily granted. The statute that confers jurisdiction, structures, channelizes and operates the scope of such jurisdiction. Thus, while judicial authorities and appellate authorities may encourage settlements, they cannot direct them by acting as courts of equity.”
Justices Chandrachud and Bopanna observed that the NCLT has clearly acted outside the terms of its jurisdiction. The bench said that the NCLT is only empowered to verify whether there has been any lapse or if there has been no lapse. On a petition set up by ES Krishnamurthy and 16 others, the NCLT had refused to accept the petition and instead directed the builder to settle the claims within three months. NCLAT upheld the order of NCLT.
A bench of Justices DY Chandrachud and AS Bopanna concurred with the submission of advocate Srijan Sinha, appearing for several investors who had filed bankruptcy proceedings against realtor Bharat Hitech Builders, saying, “The IBC is a complete code in itself. The Jurisdictional Authority (NCLT) and the Appellate Authority (NCLAT) are the creatures of law. Their jurisdiction is statutorily granted. The statute that confers jurisdiction, structures, channelizes and operates the scope of such jurisdiction. Thus, while judicial authorities and appellate authorities may encourage settlements, they cannot direct them by acting as courts of equity.”
Justices Chandrachud and Bopanna observed that the NCLT has clearly acted outside the terms of its jurisdiction. The bench said that the NCLT is only empowered to verify whether there has been any lapse or if there has been no lapse. On a petition set up by ES Krishnamurthy and 16 others, the NCLT had refused to accept the petition and instead directed the builder to settle the claims within three months. NCLAT upheld the order of NCLT.
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