Pending deposit offer before admission can bar Section 7 insolvency admission if the tribunal has already noticed the application.

Where a corporate debtor, after the matter was reserved but before pronouncement, filed a bona fide application offering to deposit the full claimed debt and the adjudicating authority had already issued notice on that application, admission of the Section 7 petition without considering the pending request was improper. The Tribunal distinguished the rule against entertaining fresh applications after reservation because the later application had in fact been taken on record and noticed by the adjudicating authority. It also noted that the facts did not amount to a completed settlement under Section 12A, but to a voluntary deposit offer relevant to maintainability and timing of admission. The admission order was therefore set aside.

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Issues: Whether the order admitting the Section 7 application could be sustained when the corporate debtor had, after the matter was reserved, filed an application seeking leave to deposit the entire claimed amount and the adjudicating authority had issued notice on that application.

Analysis: The corporate debtor had placed on record a payment order for the full amount claimed and sought permission to deposit the amount without prejudice, while also seeking adjudication of the quantum before the appropriate forum. The adjudicating authority had taken cognizance of that application and issued notice fixing a later date for hearing. In these circumstances, the subsequent admission of the Section 7 petition without considering the pending application was found improper. The earlier principle that no fresh application is ordinarily entertained after a matter is reserved was distinguished because the later application had in fact been entertained by the adjudicating authority itself. The Tribunal also held that the facts did not present a completed settlement under Section 12A, but a voluntary deposit offer relevant to the maintainability and timing of admission.

Conclusion: The admission order under Section 7 was unsustainable and was set aside. The appeal was allowed.

Ratio Decidendi: Where a corporate debtor, after the matter is reserved but before pronouncement, files a bona fide application offering to deposit the full claimed debt and the adjudicating authority has already issued notice on that application, admission of a Section 7 petition without considering the pending application is liable to be interfered with.

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