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of <h1>NCLAT sets deadline for Section 7 Company Petition, emphasizes timely resolution</h1> <h3>Urban Infrastructure Trustees Ltd. Versus Ozone Propex Pvt. Ltd.</h3> The NCLAT directed the parties to argue the main Company Petition under Section 7 of the Insolvency and Bankruptcy Code, emphasizing the need for timely ... Maintainability of appeal - Writ Appeal is pending before the Hon'ble High Court of Karnataka - HELD THAT:- As per the ratio decided in M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK & ANR. [2017 (9) TMI 58 - SUPREME COURT], the Adjudicating Authority has to ascertain the existence of the default within a period of 14 days on the date of the receipt of the application and if the Adjudicating Authority is satisfied with the requisite contentions as prescribed under the extant provisions of the code, the application/petition must be admitted - In the instance case, the main CP was filed on 18.01.2019, and it was adjourned on several occasions. During the pendency of the main CP, the Respondent has filed I.A No. 229 of 2019 u/s 8 of the Arbitration and Conciliation Act, 1996. Therefore, the Adjudicating Authority could not decide the main CP as per merits. The parties are directed to argue the main CP, subject to the Writ Appeal pending before the Hon'ble High Court of Karnataka - Post the case on 12.02.2020. No further adjournments will be given in the matter. Issues Involved:1. Interpretation of orders passed by different courts regarding the arbitration matter.2. Timely disposal of the main Company Petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016.Issue 1: Interpretation of orders passed by different courts regarding the arbitration matterThe Respondent filed I.A No. 229/2019 under Section 8 of the Arbitration & Conciliation Act, 1996, seeking to refer the matter to arbitration, which was initially rejected by the Tribunal. Subsequently, a Writ Appeal was filed before the Hon'ble High Court of Karnataka challenging the rejection. The High Court clarified the effect of the interim order, stating its limited impact and that the order of remand directing the disposal of the application under Section 8 of the Arbitration Act would remain stayed. The Tribunal noted that there was no court order preventing them from proceeding with the pending matter. The Adjudicating Authority had earlier kept the case pending due to its sub-judice nature before the High Court, indicating a willingness to take up the matter post the High Court's decision. The Petitioner challenged this decision before the NCLAT, which, considering the absence of a stay order from the High Court and Supreme Court precedents, directed the parties to argue the main Company Petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016.Issue 2: Timely disposal of the main Company Petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016Citing the Supreme Court's decision in 'Innoventive Industries Limited v/s. CICI Bank and Anr (2018) 1 SCC 407,' emphasizing the importance of the Adjudicating Authority ascertaining the existence of a default within 14 days of receiving the application, the Tribunal stressed the need for timely resolution. The Adjudicating Authority had adjourned the main Company Petition filed in January 2019 on several occasions due to the Respondent's filing of I.A No. 229 of 2019 under the Arbitration Act. Considering the clarificatory orders of the High Court and the NCLAT's observations, the Tribunal deemed it necessary to proceed with deciding the main Company Petition filed under Section 7 of the Code, which had been pending since February 2019. Therefore, the Tribunal directed the parties to argue the main Company Petition, subject to the Writ Appeal pending before the Hon'ble High Court of Karnataka, setting a deadline for the next hearing and emphasizing no further adjournments would be granted.This judgment clarifies the interpretation of court orders related to arbitration matters and underscores the importance of timely disposal of Company Petitions under the Insolvency and Bankruptcy Code, 2016, in line with legal precedents and procedural requirements.
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