Section 7 insolvency applications must be admitted or rejected within the statutory timeline, with no indefinite pre-admission delay.

The NCLAT reiterated that an Adjudicating Authority must pass an order admitting or rejecting a Section 7 insolvency application within the statutory framework of Section 7(4) and Section 7(5), and cannot continue to keep the matter at the pre-admission stage once the application is ripe for decision. Noting that an earlier direction had not been complied with, the Tribunal did not enter the merits of the insolvency claim and instead directed the Adjudicating Authority to dispose of the application by passing an order of admission or rejection within one week.

---

---

Issues: Whether the Adjudicating Authority was required to pass an order of admission or rejection on the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 within the mandated time.

Analysis: The order records that the Adjudicating Authority had not passed the required order of admission or rejection despite an earlier direction, and had continued dealing with the matter at the pre-admission stage contrary to the mandate of Section 7(4) and Section 7(5). Without entering into the merits, the Appellate Tribunal directed compliance with the statutory scheme and required disposal of the application within one week.

Outcome: The appeal resulted in a direction to the Adjudicating Authority to pass an order of admission or rejection on the Section 7 application within one week.

---