E S KRISHNAMURTHY & ORS. versus M/S BHARATH HI TECH BUILDERS PVT. LTD. on 14 December 2021

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[2021] 12 S.C.R. 28

SUPREME COURT REPORTS

[2021] 12 S.C.R.

E S KRISHNAMURTHY & ORS.

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v.

M/S BHARATH HI TECH BUILDERS PVT. LTD.

(Civil Appeal No 3325 of 2020)

BDECEMBER 14, 2021

[DR. DHANANJAYA Y CHANDRACHUD AND

A S BOPANNA, JJ]

Insolvency and Bankruptcy Code, 2016: s. 7 – Initiation ofCCorporate Insolvency Resolution Process by financial creditor –On facts, respondent defaulted in making re-payment of an amountof Rs 33 crores to the appellants – Petition u/s. 7 instituted by theappellants against respondents – Adjudicating Authority-NCLTdeclined to admit the petition and directed the respondent to settleall the remaining claims within three months – Appeal there againstDdismissed by the Appellate Authority-National Company LawAppellate Tribunal – On appeal, held: Order of the AdjudicatingAuthority, and the directions issued, suffered from an abdication ofjurisdiction – Adjudicating Authority acted outside the terms of itsjurisdiction u/s. 7(5) – Adjudicating Authority cannot compel a partyEto the proceedings before it to settle a dispute – Such a course ofaction is not contemplated by the IBC – While, adjudicating Authorityand Appellate Authority can encourage settlements, they cannotdirect them by acting as courts of equity – Adjudicating Authority isempowered only to verify whether a default has occurred or not –Based thereupon, the Adjudicating Authority must then either admitFor reject an application – These are the only two courses of actionwhich are open to the Adjudicating Authority in accordance with s.7(5) – Furthermore, the Appellate Authority sought to make adistinction by observing that the directions of the AdjudicatingAuthority were at the ‘pre-admission stage’, and that the order wasGnot of such a nature which was prejudicial to the rights and interestof the stakeholders – Also, settlement has not been arrived at by therespondents with the appellants – Observation that the appeal wasnot maintainable is erroneous – Order passed by the NCLAT andNCLT set aside – Proceedings to be restored back to the adjudicatingauthority for afresh consideration.H

s. 7 – Corporate Insolvency Resolution Process under – Scopeand jurisdiction of the powers of the Adjudicating authority –Discussed.

Allowing the appeal, the Court

HELD: 1.1 Sub-Section (1) of Section 7 of the Insolvencyand Bankruptcy Code, 2016 enables the financial creditor to filean application for initiation of Corporate Insolvency ResolutionProcess-CIRP against the corporate debtor before theAdjudicating Authority “when a default has occurred”. Theexpression ‘default’ is defined in Section 3(12) of the IBC. Thedefinition of default adverts to the non-payment of a debt, when ithas become due and payable in whole or in part, by the debtor orthe corporate debtor. Since the definition of “default” incorporatesthe expression “debt”, it is necessary to advert to the definitionof the latter expression under Section 3(11) of the IBC. Thus, a“debt” is defined to be a liability or an obligation in respect of aclaim due from any person. This includes a financial debt and anoperational debt. If the above criteria are met, the financialcreditor can make an application under sub-Section (2) of Section7, in the manner prescribed, along with the necessary fees. Sub-Section (3) requires the financial creditor, inter alia, to furnish arecord of the default with the information utility or such otherrecord or evidence of default as may be specified along with theapplication. Under sub-Section (4), the Adjudicating Authoritymust, within 14 days of the receipt of the application under sub-Section (2), ascertain the existence of a default from the recordof an information utility or on the basis of other informationfurnished by the financial creditor under sub-Section (3).[Para 21, 22][49-B-H]

1.2 Sub-Section (5) of Section 7 is comprised in two parts:Clause (a), which is the first part, empowers the AdjudicatingAuthority to admit the application where it is satisfied that: (i) adefault has occurred; (ii) the application under sub-Section (2) iscomplete; and (iii) no disciplinary proceeding is pending againstthe proposed resolution professional; Clause (b), which is thesecond part, empowers the Adjudicating Authority to reject theapplication where it is satisfied that: (i) default has not occurred; A

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Aor (ii) the application under sub-Section (2) is incomplete; or (iii)a disciplinary proceeding is pending against the proposedresolution professional. Under sub-Section (7), the AdjudicatingAuthority has to communicate its order of acceptance or rejectionto the financial creditor and the corporate debtor or the financialcreditor, as the case may be. In accordance with sub-Section (6),Bthe CIRP process commences from the date of the admission ofthe application under sub-Section (5). Thus, a time limit for thecompletion of the CIRP within a period of 180 days (under sub-Section (1) of Section 12, subject to a further extension undersub-Section (3)) commences from the date of the admission ofCthe application to initiate the process. [Para 23][50-A-D]

1.3 On a bare reading of the provision, it is clear that both,Clauses (a) and (b) of sub-Section (5) of Section 7, use theexpression “it may, by order” while referring to the power of theAdjudicating Authority. In Clause (a) of sub-Section (5), theDAdjudicating Authority may, by order, admit the application or inClause (b) it may, by order, reject such an application. Thus, twocourses of action are available to the Adjudicating Authority in apetition under Section 7. The Adjudicating Authority must eitheradmit the application under Clause (a) of sub-Section (5) or itmust reject the application under Clause (b) of sub-Section (5).EThe statute does not provide for the Adjudicating Authority toundertake any other action, but for the two choices available.[Para 24][50-E-F]

1.4 The Adjudicating Authority noted that it had listed thepetition for admission on diverse dates and had adjourned it, interFalia, to allow the parties to explore the possibility of a settlement.Evidently, no settlement was arrived at by all the originalpetitioners who had instituted the proceedings. The AdjudicatingAuthority noticed that joint consent terms had been filed beforeit. But it is common ground that these consent terms did notGcover all the original petitioners who were before the AdjudicatingAuthority. The Adjudicating Authority was apprised of the factthat the claims of 140 investors had been fully settled by therespondent. The respondent also noted that of the claims of theoriginal petitioners who have moved the Adjudicating Authority, H

only 13 have been settled while, according to it “40 are in theprocess of settlement and 39 are pending settlements”.Eventually, the Adjudicating Authority did not entertain thepetition on the ground that the procedure under the IBC issummary, and it cannot manage or decide upon each and everyclaim of the individual home buyers. The Adjudicating Authorityalso held that since the process of settlement was progressing“in all seriousness”, instead of examining all the individual claims,it would dispose of the petition by directing the respondent tosettle all the remaining claims “seriously” within a definite timeframe. The petition was accordingly disposed of by directing therespondent to settle the remaining claims no later than withinthree months, and that if any of the remaining original petitionerswere aggrieved by the settlement process, they would be atliberty to approach the Adjudicating Authority again in accordancewith law. The Adjudicating Authority’s decision was also upheldby the Appellate Authority. [Para 26][52-D-H]

1.5 The Adjudicating Authority has acted outside the termsof its jurisdiction under Section 7(5). The Adjudicating Authorityis empowered only to verify whether a default has occurred or ifa default has not occurred. Based upon its decision, theAdjudicating Authority must then either admit or reject anapplication respectively. These are the only two courses of actionwhich are open to the Adjudicating Authority in accordance withSection 7(5). The Adjudicating Authority cannot compel aparty to the proceedings before it to settle a dispute. [Para 27][53-A-B]

1.6 Undoubtedly, settlements have to be encouragedbecause the ultimate purpose of the IBC is to facilitate thecontinuance and rehabilitation of a corporate debtor, as distinctfrom allowing it to go into liquidation. As the Statement of Objectsand Reasons accompanying the introduction of the Bill indicates,the objective of the IBC is to facilitate insolvency resolution “ina time bound manner” for maximisation of the value of assets,promotion of entrepreneurship, ensuring the availability of creditand balancing the interest of all stakeholders. What theAdjudicating Authority and Appellate Authority, however, haveproceeded to do in the instant case is to abdicate their jurisdiction AB

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Ato decide a petition under Section 7 by directing the respondentto settle the remaining claims within three months and leaving itopen to the original petitioners, who are aggrieved by thesettlement process, to move fresh proceedings in accordancewith law. Such a course of action is not contemplated by the IBC.[Para 28][53-C-E]

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1.7 The IBC is a complete code in itself. The AdjudicatingAuthority and the Appellate Authority are creatures of the statute.Their jurisdiction is statutorily conferred. The statutewhich confers jurisdiction also structures, channelises andcircumscribes the ambit of such jurisdiction. Thus, while theCAdjudicating Authority and Appellate Authority can encouragesettlements, they cannot direct them by acting as courts of equity.[Para 29][53-F]

1.8 The statement indicating the settlement process showsthat a settlement has admittedly not been arrived at by theDrespondent with all the appellants. Moreover, impleadmentapplications have also been filed on behalf of an additional set ofindividuals claiming non-payment of their dues by the respondent.[Para 31][55-F-G]

1.9 The order of the Adjudicating Authority, and theEdirections which eventually came to be issued, suffered from anabdication of jurisdiction. The Appellate Authority sought to makea distinction by observing that the directions of the AdjudicatingAuthority were at the ‘pre-admission stage’, and that the orderwas not of such a nature which was prejudicial to the rights andFinterest of the stakeholders. The Appellate Authority wascognizant of the fact that even the time schedule for settlementwhich had been indicated by the Adjudicating Authority hadelapsed, but then noted the impact of the COVID-19 pandemicon the real estate market, including on the respondent. Whileacknowledging that the consent terms were “filed by some ofGthe stake holders though may not be all encompassing”, theAppellate Authority nonetheless proceeded to dismiss the appealas not maintainable. The observation that the appeal was notmaintainable is erroneous. Plainly, the Adjudicating Authority H

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failed to exercise the jurisdiction which was entrusted to it. Aclear case for the exercise of jurisdiction in appeal was thus madeout, which the Appellate Authority then failed to exercise.[Para 32][55-G-H; 56-A-C]

1.10 Since there is inclination to restore the proceedingsback to the Adjudicating Authority for a fresh consideration, it isnot necessary for this Court to dwell on any other aspect, saveand except for what weighed with the Adjudicating Authority indisposing of the petition without adjudicating on other issues ofmaintainability or merits. It is left open all the rights andcontentions of the parties to be submitted before and decided bythe Adjudicating Authority. The impugned judgment and order ofthe NCLAT and of the NCLT is set aside. The petition underSection 7 is restored to the NCLT for disposal afresh. [Para 33,34][56-D-F]

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Manish Kumar v. Union of India (2021) 5 SCC 1;Embassy Property Developments (P) Ltd. v. State ofKarnataka (2020) 13 SCC 308 : [2019] 17 SCR 559;Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC407 : [2017] 8 SCR 33; Pratap Technocrats (P) Ltd.and Others v. Monitoring Committee of Reliance InfratelLimited and Another 2021 SCC OnLine SC 569; SwissRibbons Pvt Ltd and Anr. v. Union of India and Ors.(2019) 4 SCC 17 : [2019] 3 SCR 535; Arun KumarJagatramka v. Jindal Steel & Power Ltd. (2021) 7 SCC474 – referred to.

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Case Law Reference

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ACIVIL APPELLATE JURISDICTION: Civil Appeal No.3325 of2020.

From the Judgment and Order dated 30.07.2020 of the NationalCompany Law Appellate Tribunal, New Delhi in Company Appeal (AT)(Insolvency) No.649 of 2020.

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Srijan Sinha, Himanshu Chaubey, Ms. Parul Dhurvey, Advs. forthe Appellants.

Ms. Aakanksha Nehra, Sandeep Bajaj, Soayib Qureshi, Ms.Sangya Gupta, Siddharth Shukla, Advs. for the Respondent.

CThe Judgment of the Court was delivered by DR. DHANANJAYA Y CHANDRACHUD, J.

1. Admit.

2. The present appeal under Section 62 of the Insolvency andDBankruptcy Code 2016[1 ]has arisen from a judgment of the NationalCompany Law Appellate Tribunal[2] dated 30 July 2020, which upheld anorder dated 28 February 2020 of the National Company Law Tribunal[3]at its Bengaluru Bench.

3. On a petition[4] which was instituted by the appellants (and others)Eunder Section 7 of the IBC for initiating the Corporate InsolvencyResolution Process[5 ]in respect of the respondent, the NCLT declined toadmit the petition and instead directed the respondent to settle the claimswithin three months. The NCLAT found no merit in the appeal[6] againstthe NCLT’s order.

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4. The issue which arises for adjudication before this Court iswhether, in terms of the provisions of the IBC, the Adjudicating Authoritycan without applying its mind to the merits of the petition under Section7, simply dismiss the petition on the basis that the corporate debtor hasinitiated the process of settlement with the financial creditors.

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1 “IBC”

2 “NCLAT”/“Appellate Authority”

3 “NCLT”/“Adjudicating Authority”

4 C.P(IB)No. 188/BB/2019

5 “CIRP”

H6 Company Appeal (AT) (Insolvency) No 649 of 2020

5. The genesis of the case arises from a Master Agreement toSell[7 ]which was entered into between the respondent, IDBI TrusteeshipLimited and Karvy Realty (India) Limited[8 ]on 22 June 2014, in order toraise an amount of Rs.50 crores for the development of 100 acres ofagricultural land. Under the terms of the Master Agreement, the FacilityAgent was to sell the plots to prospective purchasers against the paymentof a lumpsum amount. The respondent was then required to pay interestat the rate of 25 per cent per annum compounded annually to thepurchaser, under the Master Agreement. It has been stated that infurtherance of the Master Agreement, the ninth appellant was allotted aplot in the project being developed by the respondent on the payment ofa sum of Rs 12,50,000. Thus, the respondent was obligated to conveyand register the plots to the ninth appellant within 21 months from thedate of execution of the Master Agreement (i.e., by 21 March 2016).

6. Since the requisite funds could not be generated through theMaster Agreement, a Syndicate Loan Agreement[9] was entered intobetween the respondent, IDBI Trusteeship Limited and the Facility Agenton 22 November 2014 for availing a term loan of Rs18 crores fromprospective lenders. Such prospective lenders were to lend moneys byexecuting a Deed of Adherence. In accordance with the terms of theLoan Agreement, the respondent had to utilise the funds raised fordeveloping the proposed residential layout in its project and it was to payan assured return at the rate of 20 per cent annum on the principalamount. Further, the tenure of the loan was to be 24 months from theexecution of the Loan Agreement, and in the event of default, therespondent was liable to pay an additional interest of one per cent forevery month.

7. The case of the appellants is that during the year 2015-2016,the Facility Agent acting through its sister concern (Karvy Private Wealth)advised its clients to extend loans to the respondent. The appellants claimthat they (with the exception of the ninth appellant), along with severalothers, extended term loans to the respondent acting on the advice ofthe Facility Agent and its sister concern. Thus, requisite Deeds ofAdherence were signed. It is alleged by the appellants that through the 7 “Master Agreement”

8 “Facility Agent”

9 “Loan Agreement”

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ALoan Agreement, the respondent raised over Rs 15 crores from nearly300 investors in the first tranche of loans.

8. By a letter dated 29 February 2016, addressed to one of theoriginal petitioners in the petition before the NCLT who was allotted aplot under the Master Agreement, the respondent sought an extensionBof time till 31 October 2016 for conveying the plots. It has been allegedthat in its letter, the respondent undertook that in the event of its failureto convey the plots by 31 October 2016, the entire amount which waspaid would be returned, together with interest as agreed in the MasterAgreement itself.

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C9. Further, on 30 November 2016, the respondent is stated to haveextended the term of the Loan Agreement, due to its alleged inability torefund the principal amount along with interest. The respondent is alsoalleged to have sought an extension of the loan period by 12 months,with an assurance that the principal amount would be repaid in threeequal instalments in the 13[th], 14[th ]and 15[th ]months.D

10. However, on 26 April 2019, 11 out of the 17 appellants beforethis Court (together with 72 other petitioners) instituted a petition underSection 7 of the IBC before the Adjudicating Authority, due to therespondent’s default in making the re-payment of an amount of Rs33,84,32,493.E

11. On 11 September 2019, the Adjudicating Authority adjournedthe proceedings on the ground that the parties were attempting to resolvethe dispute. A further extension of time for exploring the possibility of asettlement was sought on 24 October 2019 by the respondent, whichFwas granted by the Adjudicating Authority and the petition was postedfor 5 November 2019. On 22 November 2019, the respondent informedthe Adjudicating Authority that it was exploring the possibility of asettlement, following which it was observed that any proposal forsettlement should be furnished to the petitioners well before the nextdate of hearing. On 20 December 2019, with the respondent havingGfailed to resolve the issue, the Adjudicating Authority posted the petitionfor admission on 29 January 2020. On 29 January 2020, on therespondent’s request, the Adjudicating Authority granted a furtheropportunity to the respondent to settle the dispute with the petitionersbefore it. On 27 February 2020, the respondent filed a memo before theHAdjudicating Authority stating that it had reached a settlement with 140

investors. According to the appellants, however, out of 83 petitionerswho were before the Adjudicating Authority in the petition, a settlementhad been arrived at only with 13 petitioners. There was, in other words,no settlement with the other 70 petitioners before the NCLT.

12. Eventually, by its order dated 28 February 2020, the NCLTdisposed of the petition. The Adjudicating Authority noted that “both thelearned Counsels have filed Joint Consent Terms dated 12.02.2020”.Admittedly, however, these consent terms were arrived at by therespondent with only one of the petitioners before the AdjudicatingAuthority, and not with all of the petitioners (including the appellants).Before the Adjudicating Authority, the respondent submitted that“subsequently they have settled the claims of about 140 Creditors” andcounsel for the respondent also filed a memo indicating the steps thatthey had taken to settle the claims of “various others creditors and clients”.In this backdrop, the Adjudicating Authority observed:

“6. It is not in dispute that the Corporate Debtor with bona fideintention is exploring the possibility of the settlement in questionand the project is in advanced stage of completion, and if theCompany is put under CIRP, interest of all the Home Buyers aswell as other Creditors will be in jeopardy. He further submitsthat the Corporate Debtor is taking all steps to settle the remainingclaims of the Petitioners as well as other Creditors within a timeframe. Lists showing the number of cases settled and thoseremaining have been filed.

7. It is a settled position of law that this procedure under the Codeis contemplated to be summary in nature, and it cannot manage ordecide upon each and every case of individual homebuyers. Listsof Individual cases have been placed on record which show that140 investors have been fully settled by the Corporate Debtorand an amount of Rs.27.25 crore has been paid to them. 13 claims/Petitioners before us have been settled, 40 are in the process ofsettlement and 39 pending settlement. Thus the process ofsettlement appears to be progressing in all seriousness. Instead ofexamining all the individual claims in detail, we would like to disposeof the instant case by directing the Corporate Debtor to settle allthe remaining claims sincerely within a definite lime frame.”

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AThus, the Adjudicating Authority decided to dispose the petitionbased on the following factors: (i) that respondent’s efforts to settle thedispute were bona fide, as evinced by the fact that they had alreadysettled with 140 investors, including 13 petitioners before it; (ii) thesettlement process was underway with 40 other petitioners; (iii) theprocedure under the IBC was summary in nature, and could not be usedBto individually manage the case of each of the 83 petitioners before it;and (iv) initiation of CIRP in respect of the respondent would put injeopardy the interests of home buyers and creditors, who have investedin the respondent’s project, which was in advanced stages of completion.In disposing of the petition, the Adjudicating Authority issued the followingCdirections:

“a. The Corporate Debtor is directed to settle the remaining claimsas expeditiously as possible, but not later than 3 months, andcommunicate this decision to all the concerned parties.

b. If aggrieved by the settlement process of the Corporate Debtor,Dthe remaining Petitioners, if any, would be at liberty to approachthis Adjudicating Authority again, in accordance with law.”

13. The order of the Adjudicating Authority was challenged inappeal before the NCLAT by 7 of the original petitioners, all of whomare appellants before this Court as well, along with certain other allotteesEwho were not original petitioners before the NCLT. By its impugnedjudgment 30 July 2020, the Appellate Authority dismissed the appeal,noting thus:

“3. It is manifestly clear that the application under Section 7 ofFthe l&B Code came to be disposed of at the pre-admission stageand no order of admission or rejection of application was passedby the Adjudicating Authority keeping in view the nature of claimswhich admittedly were relatable to a Housing Project. TheAdjudicating Authority appears to have been influenced by thefact that claims of the maximum number of stakeholders haveGbeen settled which included some claims settled at pre-admissionstage before the Adjudicating Authority. In so far as the remainingclaims were concerned, the Adjudicating Authority allowed adefinite time frame viz. 3 months giving liberty to the claimant(s}whose claims would remain unsettled after expiry of the giventime frame, to come back and re-agitate the matter.H

4. Viewed in these circumstances, it cannot be said that theimpugned order is of such a nature which is prejudicial to therights and interests of any of the stakeholders. The claimant(s)who may be dissatisfied or whose claims remain unsettled duringthe given time frame can approach the Adjudicating Authoritywho has not shut its doors. Assailing of the impugned order inappeal would not be the appropriate course.

5. It is a fact that the given time frame has already elapsed butwe take judicial notice of the fact that normal business operationshad been adversely affected by the imposition of lockdown due tooutbreak of COVID-19 which has been declared pandemic. Evenafter unlocking, the pace of business operations is far from normal.In these circumstances, some concession has to be given inadherence to the timelines set in terms of the impugned order.Be-that-as-it-may, this situation may also have to be addressedby the Adjudicating Authority, if approached by a claimant whoseclaim has not been settled so far. It is not disputed that theresolution of disputes relating to claims, more particularly of Allotteesin Housing Projects, has to be given primacy and pushing theCorporate Debtor into liquidation would only be the last option.

6. In view of the foregoing discussion and also bearing in mindthat the settlement process set in motion at the pre-admissionstage is supported by the Consent Terms filed by some of thestakeholders, though it may not be all encompassing, this appealwould not lie. We accordingly hold that the appeal is notmaintainable. There being no legal infirmity in the impugned order,the appeal is dismissed.”

The Appellate Authority’s decision to dismiss the appeal and upholdthe Adjudicating Authority’s order was thus based upon the followingconsiderations: (i) the NCLT decided to dismiss the petition under Section7 at the ‘pre-admission stage’ itself, since the settlement process wasunderway; (ii)the NCLT protected the rights of all the appellants/petitioners by setting a time-frame for settlement by the respondent, andleaving them open the option of approaching it in case their claimsremained un-settled; (iii) while the timeframe for settlement had elapsed,the respondent had to be shown leniency due to the effects of the COVID-19 pandemic on businesses; and (iv)in disputes of this nature, the claimsof the home buyers have to be given priority, and the respondent shouldnot be pushed into liquidation, until as the last resort.

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A14. The NCLAT’s judgment and order dated 30 July 2020 hasnow been challenged before this Court by a variety of individuals –some of whom were original petitioners before the NCLT and went inappeal before the NCLAT, some who joined the appeal before the NCLATdirectly, some who were original petitioners before the NCLT but didnot join the appeal before the NCLAT and others who have joined theBcause before this Court for the first time. A tabular representation isprovided below:

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FDuring the course of the appeal, there have also been twoapplications[10] seeking impleadment in the proceedings by ten individualswho are similarly placed to the appellants. Some of these individualswere also original petitioners before the NCLT.

15. We have heard Mr Srijan Sinha, Counsel for the appellantsGand Ms Aakanksha Nehra, Counsel for the respondent.16. On behalf of the appellants, the principal challenge is on theground that:

H10 IA No 4783 of 2021 and IA No 97193 of 2021

(i) The Appellate Authority as well as the Adjudicating AuthorityAhave acted beyond the scope of their jurisdiction under theIBC, and thus their orders are liable to be set aside sincethey were coram non judice. Reliance has been placedupon the judgment of this Court in Embassy PropertyDevelopments (P) Ltd. v. State of Karnataka[11 ]in supportBof this proposition;

(ii) The impugned orders are contrary to the mandate of Section7 of the IBC. This ground has been sought to be substantiatedby urging as follows:

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(a) The orders of the Adjudicating Authority and theCAppellate Authority are contrary to the principlesenunciated in the judgment of this Court inInnoventive Industries Ltd. v. ICICI Bank[12](“Innoventive Industries”), with respect to thescope and extent of the enquiry which has to be madeDin a petition under Section 7 of the IBC. This Courthas held that while entertaining the petition underSection 7, the Adjudicating Authority has to merelysatisfy itself whether a default has occurred. As such,Section 7(5) only provides the Adjudicating Authoritywith two options – to pass an admission order underESection 7(5)(a) or reject the petition under Section7(5)(b). Thus, unless the debt has not become due oris interdicted by some law, the Adjudicating Authoritymust admit a petition under Section 7; F

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(b) Admittedly, in the present case, the respondent hascommitted an act of default as understood in theprovisions of Section 3(12) of the IBC. This is evidentfrom the fact that it is willing to settle the debt owedto the appellants, which was also noted by theAdjudicating Authority. Further, the dispute betweenthe respondent and as many as 70 original petitionershad not been settled, at the time when the AdjudicatingAuthority passed its order. In spite of this, the G

11 (2020) 13 SCC 308

12 (2018) 1 SCC 407, paras 28 and 30

[2021] 12 S.C.R.

AAdjudicating Authority failed to act in accordancewith the provisions of Section 7(5)(a) and issue anorder admitting the application; and

(c) Further, the Appellate Authority has also erred inobserving that the petition under Section 7 wasBdisposed of at a ‘pre-admission stage’ by theAdjudicating Authority. Where the AdjudicatingAuthority is not satisfied that the financial debt isowed and a default has occurred, Section 7(5)(b)provides that it shall reject the application. Thus, anoption to dispose at a ‘pre-admission stage’ is notCavailable to the Adjudicating Authority;

(iii) The Adjudicating Authority and Appellate Authority haveacted beyond the scope of their jurisdiction in ‘directing’the parties to settle with the respondent. To substantiateDthis argument, it has been urged:

(a) The Adjudicating Authority as well as the AppellateAuthority are creatures of the statute – the IBC –and are bound by its provisions. Thus, their jurisdictionis limited by the provisions of the IBC; E

(b) Hence, once there is an admitted default by therespondent, the Adjudicating Authority was statutorilybound to admit the petition and has acted patentlybeyond its jurisdiction in not entertaining it on theground that there was a possibility of a settlement.FThe Appellate Authority has merely placed its stampof approval on the judgment of the AdjudicatingAuthority. In doing so, Adjudicating Authority andAppellate Authority have acted as courts of equity,which is not prescribed by the IBC. In support ofthis proposition, reliance has been placed upon theGjudgment of this Court in Pratap Technocrats (P)Ltd. and Others v. Monitoring Committee ofReliance Infratel Limited and Another[13](“Pratap Technocrats”); H13 2021 SCC OnLine SC 569, paras 37, 47 and 50

(c) In any case, out of 83 petitioners before theAAdjudicating Authority, only 13 had entered into asettlement. As a result, there was no settlement withthe remaining 70 petitioners. Moreover, even inrespect of the financial creditors with whom therespondent had entered into a settlement, theBrespondent had failed to comply with the settlementeven before the passing of the impugned order; (d)Further, the direction by the Adjudicating Authorityto the respondent to settle all individual claims isbeyond its jurisdiction, as a judicial authority cannotCdispose of a petition with a direction to settle adispute. At the highest, a proceeding may beadjourned in order to enable the parties to explorethe possibility of a settlement. In the present case, asmany as four opportunities were granted to therespondent to resolve the dispute with the petitioners,Dbut to no avail. Hence, once the parties failed to arriveat a settlement, the judicial authority was duty boundto decide the case on merits alone; and (e)Finally, the admission of the petition by theAdjudicating Authority would not have automaticallyEnullified any potential for settlement. This Court hasheld in its judgment in Swiss Ribbons Pvt Ltd andAnr. v. Union of India and Ors.[14]that even after apetition under Section 7 of the IBC is admitted andbefore the Committee of Creditors[15] is formed, theFparties can settle the dispute. Further, even after theCoC is formed, Section 12A of the IBC does providefor a mechanism through which the petition can bewithdrawn (if the parties were to reach a settlement);

(iv) The IBC envisages two classes of creditors – financial andoperational creditors. Except some differences in their rightsand role in the CIRP, the IBC confers equal rights uponboth the classes of creditors. However, through the G

Aimpugned judgment, the Appellate Authority has created asub-class within the class of financial creditors by observingthat in the resolution of disputes relating to claims of allotteesin housing projects, their rights have to be given primacyand the project entity/corporate debtor should not be sentinto liquidation only at the behest of the other investors; and B

(v) The threshold requirement of 10 per cent allotees of ahousing project filing a petition under Section 7 of the IBChas been upheld by this Court in Manish Kumar v. Unionof India[16](“Manish Kumar”). However, in paragraph 181,this Court has held that such a requirement only needs toCbe assessed at the threshold while admitting the petition.Hence, if subsequent to the admission, withdrawalapplications are preferred and the 10 per cent threshold isreduced, it shall not affect the maintainability of the originalpetition. Thus, in the present case, the 83 original petitionersDdid meet the 10 per cent threshold and the petition shouldhave been admitted.

Based on the above submissions, the appellants have prayed thatthe orders of the NCLAT and NCLT be set aside, and the original petitionunder Section 7 of the IBC be restored for a decision on its admissibilityEunder Section 7(5) of the IBC.

17. On the other hand, the respondent counters by submitting that:

(i) The present appeal has been filed by the appellants to obviatethe procedural requirements of Section 7 of the IBC. It hasbeen urged:F

(a) The petition under Section 7 was instituted by thefirst appellant on behalf of himself and 82 otherpetitioners/proposed purchasers. Out of these 83petitioners, only 7 of the original petitioners (includingthe first appellant) approached the NCLAT in appeal.GThe present appeal has been filed by the first appellanton behalf of the following persons:

i.First to seventh appellants, who were partiesbefore the NCLT and the NCLAT; H16 (2021) 5 SCC 1

ii.Eight and ninth appellants, who were notAparties to the original petition under Section 7but had filed an appeal before the NCLAT;

iii.Tenth, eleventh, fifteenth and sixteenthappellants, who were parties before the NCLTbut not before the NCLAT; andB

iv.Twelfth to fourteen and seventeenthappellants, who were neither parties beforethe NCLT nor the NCLAT; The reduced number of litigants establishes that therespondent has made efforts to settle the disputeswith many of the proposed purchasers; (b)Further, the Parliament has amended Section 7 witheffect from 28 December 2019, which was upheldby the judgment of this Court in Manish Kumar(supra). The amendment has introduced the thresholdrequirement (of 10 per cent or 100 home buyers) forfiling a petition under Section 7, with the objective ofprotecting a corporate debtor from being dragged intoinsolvency proceedings by an isolated set of creditors;

(c) Thus, the present appeal being a continuation of theoriginal proceedings under Section 7, the thresholdrequirement would have to be met. Evidently, withthe reduced number of litigants, it is not met; and (d)Further, if the appellants have to file a freshproceeding before the Adjudicating Authority or iftheir proceedings are restored before the AdjudicatingAuthority at this stage, they would still have to fulfilthe mandatory requirement of bringing together 100creditors in the same class or 10 per cent of the totalnumber of such creditors;

(ii) The present proceedings have only been filed by theappellants to arm-twist the respondent, instead of taking upthe settlements offered to them:

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A(a)The first appellant preferred a petition on behalf of82 home buyers. The Adjudicating Authority in itsorder dated 28 February 2020 recorded that therespondent had fully settled with 140 investors againsta payment of Rs 27.25 crores. Further, it was notedthat the claims of 13 petitioners before the NCLTBwere settled, 40 were in the process of settlementand 39 were pending settlements. It was in thisbackdrop that the NCLT disposed of the petition, withspecific directions that the appellants could approachit if the respondent did not settle their claims withinCthree months; (b)Even after the disposal of the proceedings by theNCLT, the respondent has continued to settle withproposed purchasers. However, while numerousefforts have been made to arrive at a settlement withDthe appellants, none of the options offered wereagreeable to them;

(c) During the pendency of the appeal, agreed amountshave been paid in full to the eighth, fourteenth andsixteenth appellants in November 2020. With respectEto the tenth, twelfth, thirteenth and seventeenthappellants, a settlement was arrived at and chequeshave been handed over by the respondent to them,which have not been encashed; and (d)The respondent reiterates its commitment to settleFwith the proposed purchasers, despite the real-estateindustry being severely affected due to the COVID-19 pandemic; and

(iii) The respondent should not be pushed to insolvency merelybecause a few of its alleged creditors are not willing toGsettle. In any case, the appellants are merely speculativeinvestors and are not allottees within the meaning of Section5(8)(12) of the IBC, and thus they have no claim underSection 7 of the IBC.

On the above hypothesis, it has been submitted that the appellantsHare utilising the process to facilitate recovery whereas the primary focus of IBC is to ensure revival and continuation of the corporate debtor, andto protect it from corporate death by liquidation.

18. The rival submissions will now be considered.

19. At the very outset, there is a factual question in relation to thesettlements which have been made by the respondent with the presentappellants. The respondent has alleged that settlements have been reachedwith the eighth, fourteenth and sixteenth appellants and agreed amountshave been paid in full. Further, settlements were arrived at with tenth,twelfth, thirteenth and seventeenth appellants and cheques have beenhanded over to them, but they have not been encashed. However, theappellants note that while a settlement amount was agreed between therespondent and the fourteenth appellant, it was never actually paid beforethe appeal was filed. Further, upon the filing of the present appeal, whenthe respondent offered a new settlement amount, it was rejected by thefourteenth appellant. Similarly, no settlement has been arrived at withthe sixteenth appellant. In respect of the tenth, twelfth, thirteenth andseventeenth appellants, it is submitted that the cheques were issued inJune 2020 but the respondent itself in October 2020 told them not toencash them till the outcome of the present appeal. Presently, theappellants acknowledge that final settlements have been reached betweenthe respondent and the eighth, tenth and twelfth appellants. This positionhas not been controverted by the respondent.

20. The central question in this appeal then is whether the NCLTand the NCLAT were correct in their approach of rejecting the appellants’petition under Section 7 of the IBC at the ‘pre-admission stage’, anddirecting them to settle with the respondent within 3 months. Section 7of the IBC provides for the initiation of CIRP by a financial creditor or aclass of financial creditors. Section 7, as it stood prior to its amendmentsin 2019[17], is reproduced below:

“7. Initiation of corporate insolvency resolution process byfinancial creditor.—(1) A financial creditor either by itself orjointly with other financial creditors, or any other person on behalfof the financial creditor, as may be notified by the CentralGovernment, may file an application for initiating corporateinsolvency resolution process against a corporate debtor beforethe Adjudicating Authority when a default has occurred:

17 Through Act 26 of 2019 and Act 1 of 2020

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AExplanation.—For the purposes of this sub-section, a defaultincludes a default in respect of a financial debt owed not only tothe applicant financial creditor but to any other financial creditorof the corporate debtor.

(2) The financial creditor shall make an application under sub-Bsection (1) in such form and manner and accompanied with suchfee as may be prescribed.

(3) The financial creditor shall, along with the application furnish—

(a) record of the default recorded with the information utility orsuch other record or evidence of default as may be specified;C(b) the name of the resolution professional proposed to act as aninterim resolution professional; and

(c) any other information as may be specified by the Board.

(4) The Adjudicating Authority shall, within fourteen days of theDreceipt of the application under sub-section (2), ascertain theexistence of a default from the records of an information utility oron the basis of other evidence furnished by the financial creditorunder sub-section (3):

(5) Where the Adjudicating Authority is satisfied that—

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(a) a default has occurred and the application under sub-section(2) is complete, and there is no disciplinary proceedings pendingagainst the proposed resolution professional, it may, by order, admitsuch application; or F(b) default has not occurred or the application under sub-section(2) is incomplete or any disciplinary proceeding is pending againstthe proposed resolution professional, it may, by order, reject suchapplication:

Provided that the Adjudicating Authority shall, before rejectingGthe application under clause (b) of sub-section (5), give a noticeto the applicant to rectify the defect in his application within sevendays of receipt of such notice from the Adjudicating Authority.

(6) The corporate insolvency resolution process shall commencefrom the date of admission of the application under sub-sectionH(5).

(7) The Adjudicating Authority shall communicate—

(a) the order under clause (a) of sub-section (5) to the financialcreditor and the corporate debtor; (b) the order under clause (b) of sub-section (5) to the financialcreditor, within seven days of admission or rejection of suchapplication, as the case may be.”

21. Sub-Section (1) of Section 7 enables the financial creditor tofile an application for initiation of CIRP against the corporate debtorbefore the Adjudicating Authority “when a default has occurred”. Theexpression “default” is defined in Section 3(12) of the IBC in the followingterms:

“(12) “default” means non-payment of debt when whole or anypart or instalment of the amount of debt has become due andpayable and is not paid by the debtor or the corporate debtor, asthe case may be;”

The definition of default adverts to the non-payment of a debt,when it has become due and payable in whole or in part, by the debtor orthe corporate debtor. Since the definition of “default” incorporates theexpression “debt”, it is necessary to advert to the definition of the latterexpression under Section 3(11) of the IBC:

“(11) “debt” means a liability or obligation in respect of a claimwhich is due from any person and includes a financial debt andoperational debt;”

Thus, a “debt” is defined to be a liability or an obligation in respectof a claim due from any person. This includes a financial debt and anoperational debt.

22. If the above criteria are met, the financial creditor can makean application under sub-Section (2) of Section 7, in the mannerprescribed, along with the necessary fees. Sub-Section (3) requires thefinancial creditor, inter alia, to furnish a record of the default with theinformation utility or such other record or evidence of default as may bespecified along with the application. Under sub-Section (4), theAdjudicating Authority must, within 14 days of the receipt of the applicationunder sub-Section (2), ascertain the existence of a default from the recordof an information utility or on the basis of other information furnished bythe financial creditor under sub-Section (3).

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A23. Sub-Section (5) of Section 7 is comprised in two parts: Clause(a), which is the first part, empowers the Adjudicating Authority to admitthe application where it is satisfied that : (i) a default has occurred;(ii)the application under sub-Section (2) is complete; and (iii)nodisciplinary proceeding is pending against the proposed resolutionprofessional; Clause (b), which is the second part, empowers theBAdjudicating Authority to reject the application where it is satisfiedthat:(i)default has not occurred; or (ii)the application under sub-Section(2) is incomplete; or (iii)a disciplinary proceeding is pending against theproposed resolution professional. Under sub-Section (7), the AdjudicatingAuthority has to communicate its order of acceptance or rejection to theCfinancial creditor and the corporate debtor or the financial creditor, asthe case may be. In accordance with sub-Section (6), the CIRP processcommences from the date of the admission of the application under sub-Section (5).Thus, a time limit for the completion of the CIRP within aperiod of 180 days (under sub-Section (1) of Section 12, subject to afurther extension under sub-Section (3)) commences from the date ofDthe admission of the application to initiate the process.

24. On a bare reading of the provision, it is clear that both, Clauses(a) and (b) of sub-Section (5) of Section 7, use the expression “it may,by order” while referring to the power of the Adjudicating Authority. InEClause (a) of sub-Section(5), the Adjudicating Authority may, by order,admit the application or in Clause (b) it may, by order, reject such anapplication. Thus, two courses of action are available to the AdjudicatingAuthority in a petition under Section 7. The Adjudicating Authority musteither admit the application under Clause (a) of sub-Section (5) or itmust reject the application under Clause (b) of sub-Section (5). TheFstatute does not provide for the Adjudicating Authority to undertake anyother action, but for the two choices available.

25. In Innoventive Industries (supra), a two-judge Bench ofthis Court has explained the ambit of Section 7 of the IBC, and held thatthe Adjudicating Authority only has to determine whether a “default”Ghas occurred, i.e., whether the “debt” (which may still be disputed) wasdue and remained unpaid. If the Adjudicating Authority is of the opinionthat a “default” has occurred, it has to admit the application unless it isincomplete. Speaking through Justice Rohinton F Nariman, the Courthas observed:H

“28. When it comes to a financial creditor triggering the process,Section 7 becomes relevant. Under the Explanation to Section7(1), a default is in respect of a financial debt owed to any financialcreditor of the corporate debtor — it need not be a debt owed tothe applicant financial creditor. Under Section 7(2), an applicationis to be made under sub-section (1) in such form and manner as isprescribed, which takes us to the Insolvency and Bankruptcy(Application to Adjudicating Authority) Rules, 2016. Under Rule4, the application is made by a financial creditor in Form 1accompanied by documents and records required therein. Form 1is a detailed form in 5 parts, which requires particulars of theapplicant in Part I, particulars of the corporate debtor in Part II,particulars of the proposed interim resolution professional in PartIII, particulars of the financial debt in Part IV and documents,records and evidence of default in Part V. Under Rule 4(3), theapplicant is to dispatch a copy of the application filed with theadjudicating authority by registered post or speed post to theregistered office of the corporate debtor. The speed, within whichthe adjudicating authority is to ascertain the existence of a defaultfrom the records of the information utility or on the basis of evidencefurnished by the financial creditor, is important. This it must dowithin 14 days of the receipt of the application. It is at the stageof Section 7(5), where the adjudicating authority is to besatisfied that a default has occurred, that the corporatedebtor is entitled to point out that a default has not occurredin the sense that the “debt”, which may also include adisputed claim, is not due. A debt may not be due if it is notpayable in law or in fact. The moment the adjudicatingauthority is satisfied that a default has occurred, theapplication must be admitted unless it is incomplete, in whichcase it may give notice to the applicant to rectify the defectwithin 7 days of receipt of a notice from the adjudicatingauthority. Under sub-section (7), the adjudicating authority shallthen communicate the order passed to the financial creditor andcorporate debtor within 7 days of admission or rejection of suchapplication, as the case may be.

[…]

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A30. On the other hand, as we have seen, in the case of acorporate debtor who commits a default of a financial debt,the adjudicating authority has merely to see the records ofthe information utility or other evidence produced by thefinancial creditor to satisfy itself that a default has occurred.It is of no matter that the debt is disputed so long as theBdebt is “due” i.e. payable unless interdicted by some lawor has not yet become due in the sense that it is payable atsome future date. It is only when this is proved to thesatisfaction of the adjudicating authority that theadjudicating authority may reject an application and notCotherwise.”

26. In the present case, the Adjudicating Authority noted that ithad listed the petition for admission on diverse dates and had adjournedit, inter alia, to allow the parties to explore the possibility of a settlement.DEvidently, no settlement was arrived at by all the original petitioners whohad instituted the proceedings. The Adjudicating Authority noticed thatjoint consent terms dated 12 February 2020 had been filed before it. Butit is common ground that these consent terms did not cover all the originalpetitioners who were before the Adjudicating Authority. The AdjudicatingEAuthority was apprised of the fact that the claims of 140 investors hadbeen fully settled by the respondent. The respondent also noted that ofthe claims of the original petitioners who have moved the AdjudicatingAuthority, only 13 have been settled while, according to it “40 are in theprocess of settlement and 39 are pending settlements”. Eventually, theAdjudicating Authority did not entertain the petition on the ground thatFthe procedure under the IBC is summary, and it cannot manage or decideupon each and every claim of the individual home buyers. The AdjudicatingAuthority also held that since the process of settlement was progressing“in all seriousness”, instead of examining all the individual claims, it woulddispose of the petition by directing the respondent to settle all theGremaining claims “seriously” within a definite time frame. The petitionwas accordingly disposed of by directing the respondent to settle theremaining claims no later than within three months, and that if any of theremaining original petitioners were aggrieved by the settlement process,they would be at liberty to approach the Adjudicating Authority again inaccordance with law. The Adjudicating Authority’s decision was alsoHupheld by the Appellate Authority, who supported its conclusions.

27. The Adjudicating Authority has clearly acted outside the termsof its jurisdiction under Section 7(5) of the IBC. The AdjudicatingAuthority is empowered only to verify whether a default has occurredor if a default has not occurred. Based upon its decision, the AdjudicatingAuthority must then either admit or reject an application respectively.These are the only two courses of action which are open to theAdjudicating Authority in accordance with Section 7(5).The AdjudicatingAuthority cannot compel a party to the proceedings before it to settle adispute.

28. Undoubtedly, settlements have to be encouraged because theultimate purpose of the IBC is to facilitate the continuance andrehabilitation of a corporate debtor, as distinct from allowing it to go intoliquidation. As the Statement of Objects and Reasons accompanying theintroduction of the Bill indicates, the objective of the IBC is to facilitateinsolvency resolution “in a time bound manner” for maximisation of thevalue of assets, promotion of entrepreneurship, ensuring the availabilityof credit and balancing the interest of all stakeholders. What theAdjudicating Authority and Appellate Authority, however, have proceededto do in the present case is to abdicate their jurisdiction to decide apetition under Section 7 by directing the respondent to settle the remainingclaims within three months and leaving it open to the original petitioners,who are aggrieved by the settlement process, to move fresh proceedingsin accordance with law. Such a course of action is not contemplated bythe IBC.

29. The IBC is a complete code in itself. The Adjudicating Authorityand the Appellate Authority are creatures of the statute. Their jurisdictionis statutorily conferred. The statute which confers jurisdiction alsostructures, channelises and circumscribes the ambit of such jurisdiction.Thus, while the Adjudicating Authority and Appellate Authority canencourage settlements, they cannot direct them by acting as courts ofequity. In Pratap Technocrats (supra), a two-judge Bench of this Court,speaking through Justice DY Chandrachud, held:

“47. These decisions have laid down that the jurisdiction of theAdjudicating Authority and the Appellate Authority cannot extendinto entering upon merits of a business decision made by a requisitemajority of the CoC in its commercial wisdom. Nor is there aresidual equity based jurisdiction in the AdjudicatingAuthority or the Appellate Authority to interfere in this A

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Adecision, so long as it is otherwise in conformity with theprovisions of the IBC and the Regulations under theenactment.

[…]

B50. Hence, once the requirements of the IBC have beenfulfilled, the Adjudicating Authority and the AppellateAuthority are duty bound to abide by the discipline of thestatutory provisions. It needs no emphasis that neither theAdjudicating Authority nor the Appellate Authority havean uncharted jurisdiction in equity. The jurisdiction arisesC”within and as a product of a statutory framework.

30. In Arun Kumar Jagatramka v. Jindal Steel & PowerLtd.[18], a two judge Bench of this Court issued a note of caution to theDAdjudicating Authorities and the Appellate Authority against judicialinterference with the framework created by the IBC. Speaking throughJustice DY Chandrachud, the Court held:

“95…we do take this opportunity to offer a note of caution forNCLT and NCLAT, functioning as the adjudicatory authority andEappellate authority under the IBC respectively, from judiciallyinterfering in the framework envisaged under the IBC. As wehave noted earlier in the judgment, the IBC was introduced inorder to overhaul the insolvency and bankruptcy regime in India.As such, it is a carefully considered and well thought out piece ofFlegislation which sought to shed away the practices of the past.The legislature has also been working hard to ensure that theefficacy of this legislation remains robust by constantly amendingit based on its experience. Consequently, the need for judicialintervention or innovation from NCLT and NCLAT should be keptat its bare minimum and should not disturb the foundationalGprinciples of the IBC…”

31. In the synopsis which has been appended to the paper book, atabulated statement has been appended for the purpose of indicating thestatus of the settlement process. The statement is reproduced below:H18 (2021) 7 SCC 474

The above statement indicates that a settlement has admittedlynot been arrived at by the respondent with all the appellants. Moreover,in the present appeal, impleadment applications have also been filed onbehalf of an additional set of individuals claiming non-payment of theirdues by the respondent.

32. For the above reasons, we have come to the conclusion thatthe order of the Adjudicating Authority, and the directions which eventuallycame to be issued, suffered from an abdication of jurisdiction. TheAppellate Authority sought to make a distinction by observing that the AB

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Adirections of the Adjudicating Authority were at the ‘pre-admission stage’,and that the order was not of such a nature which was prejudicial to therights and interest of the stakeholders. The Appellate Authority wascognizant of the fact that even the time schedule for settlement whichhad been indicated by the Adjudicating Authority had elapsed, but thennoted the impact of the outbreak of COVID-19 pandemic on the realBestate market, including on the respondent. While acknowledging thatthe consent terms were “filed by some of the stake holders though maynot be all encompassing”, the Appellate Authority nonetheless proceededto dismiss the appeal as not maintainable. The observation that the appealwas not maintainable is erroneous. Plainly, the Adjudicating AuthorityCfailed to exercise the jurisdiction which was entrusted to it. A clear casefor the exercise of jurisdiction in appeal was thus made out, which theAppellate Authority then failed to exercise.

33. We may note at this stage that the provisions of Section 7 ofthe IBC have been amended with retrospective effect from 28 DecemberD2019 by Act 1 of 2020. These provisions have been construed in thejudgment of this Court in Manish Kumar (supra). Since we are inclinedto restore the proceedings back to the Adjudicating Authority for a freshconsideration, it is not necessary for this Court to dwell on any otheraspect, save and except for what weighed with the Adjudicating Authorityin disposing of the petition without adjudicating on other issues ofEmaintainability or merits. We leave open all the rights and contentions ofthe parties to be urged before and decided by the Adjudicating Authority.

34. We accordingly allow the appeal and set aside the impugnedjudgment and order dated 30 July 2020 of the NCLAT in Company Appeal(AT) (Insolvency) No 649 of 2020 and of the NCLT dated 28 FebruaryF2020 in CP (IB) No.188/BB/2019. The petition under Section 7 of theIBC (i.e., CP (IB) No.188/BB/2019) is accordingly restored to the NCLTfor disposal afresh.

35. The impleadment applications shall stand disposed of, withliberty being granted to the applicants to adopt appropriate proceedingsGin accordance with law before the Adjudicating Authority, or before suchother forum as they may be advised.

36. Pending application(s), if any, shall stand disposed of.

HNidhi Jain