Appeal allowed, impugned order set aside. Adjudicating Authority directed to decide Section 7 application.

The appeal was allowed, setting aside the impugned order. The Adjudicating Authority was directed to make appropriate decisions on the Section 7 application in line with the law, as the Authority erred in referring the matter for mediation under the Companies Act, 2013, which is not applicable to cases under the I & B Code, 2016. The Tribunal emphasized that mediation is not a remedy under Section 7 of the I & B Code, 2016, and closed the related pending Interlocutory Applications.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Debt due and default by the Corporate Debtor.
3. Equating petitions under Section 241 & 242 of the Companies Act, 2013 with applications under Section 7 of the I & B Code, 2016.
4. Authority of the Adjudicating Authority to refer Section 7 applications under the I & B Code, 2016 for mediation under Section 442 of the Companies Act, 2013.

Detailed Analysis:

Issue 1: Condonation of Delay
The appellant sought condonation of a 10-day delay in filing the appeal against the order dated 15.05.2022. The delay was attributed to the time taken to obtain a certified copy of the order and the appellant being a foreign entity. The delay was condoned in accordance with the Proviso to Section 61(2) of the I & B Code, 2016.

Issue 2: Debt Due and Default by the Corporate Debtor
The financial arrangement between the Financial Creditor and the Corporate Debtor involved investments through an Investment Agreement and a Sale and Purchase Agreement. The Financial Creditor invested Rs. 197 Crore and held 22% equity shareholding. The Corporate Debtor defaulted on coupon payments at 10% and 11% per annum on the CCDs. The Financial Creditor filed CP (IB) No. 17/7/HDB/2021 under Section 7 of the I & B Code, 2016, citing a default amount of Rs. 274.26 crore. The Adjudicating Authority should have decided on the admissibility of the petition based on the evidence of debt and default, but instead referred the matter for mediation.

Issue 3: Equating Petitions under Section 241 & 242 of the Companies Act, 2013 with Applications under Section 7 of the I & B Code, 2016
Section 241 & 242 of the Companies Act, 2013 deals with oppression and mismanagement, while Section 7 of the I & B Code, 2016 pertains to the initiation of CIRP due to default in debt repayment. The powers and purposes of these sections are distinct and cannot be equated. The Adjudicating Authority erred in tagging the Section 7 application with the Section 241 petition and referring it for mediation.

Issue 4: Authority to Refer Section 7 Applications for Mediation
The Adjudicating Authority referred the Section 7 application for mediation under Section 442 of the Companies Act, 2013. However, the power to refer matters for mediation under Section 442 is limited to proceedings under the Companies Act, 2013, and does not extend to matters under the I & B Code, 2016. The Adjudicating Authority's action was beyond its jurisdiction as per the I & B Code, 2016. The Tribunal noted that mediation is not a remedy provided under Section 7 of the I & B Code, 2016.

Conclusion
The appeal was allowed, and the impugned order dated 13.05.2022 was set aside. The Adjudicating Authority was directed to pass suitable orders on the Section 7 application in accordance with the law. The connected pending Interlocutory Applications were closed.

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