Section 7 insolvency petition restored after later correspondence showed sale-proceeds payment was only a part-adjustment.

The dismissal of the Section 7 insolvency petition was set aside because the record before the Adjudicating Authority did not include later correspondence and account documents showing that the payment received from sale proceeds was only a part-adjustment against outstanding dues, not a full settlement. Those documents also indicated that further demands were raised after the credit entry. A complete assessment therefore required fresh consideration on the full material. The petition was restored to the Adjudicating Authority for further proceedings.

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Issues: Whether the order dismissing the Section 7 insolvency petition was liable to be set aside and the petition restored for fresh consideration in light of the additional correspondence and account documents.

Analysis: The appeal concerned the correctness of the dismissal of the Section 7 petition on the basis that the amount of Rs. 1.85 crore credited from sale proceeds was treated as full settlement. The correspondence produced before the Tribunal showed that the payment was only a part-adjustment against the outstanding dues and that further demands had been raised subsequently. As these relevant documents had not been placed before the Adjudicating Authority, a complete view of the matter required reconsideration by that forum.

Conclusion: The impugned order was set aside and the Section 7 petition was restored to the Adjudicating Authority for further proceedings.

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