ValkyaEditorial

Tagged “admission-discretion”

1 article on admission-discretion.

Landmark JudgmentSupreme Court of India

Vidarbha Industries v. Axis Bank: a textual reading of 'may admit' under Section 7(5)(a) and the course-correction that followed

On 12 July 2022 a two-judge bench of the Supreme Court, in Vidarbha Industries Power Ltd v. Axis Bank Ltd, read the word 'may' in Section 7(5)(a) of the Insolvency and Bankruptcy Code as conferring discretion on the adjudicating authority to refuse admission of an otherwise-eligible Section 7 application — an apparent dilution of the Innoventive 'mandatory-admission-on-proof-of-debt-and-default' rule. The reception was sharp; the review was dismissed; a coordinate bench in Maganlal Daga flagged the inconsistency; and a coordinate bench in M. Suresh Kumar Reddy v. Canara Bank confined Vidarbha to its facts. A close reading of the textual contrast between Sections 7(5)(a) and 9(5)(a), the APTEL-award factual matrix, and the doctrinal arc that has, in operational terms, restored Innoventive to its place.

Valkya Editorial··12 min