TaxTMI 
TaxTMI 
2026 (2) TMI 22
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....td. in the capacity of being the Financial Creditor had instituted the proceedings of Company Petition (IB) No. 145/7/HDB/2021, being the proceedings drawn under Section 7 of I & B Code, 2016, to be read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, against the Respondent (the Corporate Guarantor). 2. The said Company Petition has been rejected by the Ld. Adjudicating Authority vide Para Nos. 13 to 16 with the following observations: "13. Thus, it quite clear that the valuation of the share given as security, the true value of which is the bone of contention in the present proceedings is in now sub judice, having been directed by the Hon'ble High Court of Telangana to revalue t....
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....alue of the shares of Karvy Data Management Services Limited (KDMSL) which were held by the FC as Security against the Loan and have since been invoked and adjusted against the Loan by them, that adjudication on value of such shares will be against the orders of Hon'ble High Court of Telangana which in Writ Petition Nos. 28497, 28509, 28510, 28514, 28515, 28517, 28519, 28521, 28533, 28548 and 28557 of 2019 had directed DRT to decide on the same issue and that, until and unless the issue of valuation of shares is decided by the Debt Recovery Tribunal as directed, by the Hon'ble High Court of Telangana, the exact liability of Respondent (Corporate Guarantor), to pay the debt defaulted by CD cannot be determined. Accordingly, Ld. Tribunal dire....
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.... b) Whether the Writ Petition filed before Hon'ble High Court, in the subject matter arising out of an attachment prior to the decree as rendered in the proceedings under Section (25) & 22 of Recovery of Debts & Bankruptcy Act, 1993, in O.A. No. 833 / 2019, also contained valuation of the said shares as a subject for adjudication. The first issue answers itself Para 16 of impugned order shows that the Section 7 Application has not been examined on merits and have been closed only on account of fresh valuation of shares to be done by DRT. As far as the second issue is concerned, in reading of the Judgment of Hon'ble High Court makes it clear that the Writ Petitions never dealt with any of the issues pertaining to the valuation of shares. The....
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....into the issue of valuation of shares, by the DRT. 7. In that eventuality, mere the pendency of the DRT proceedings cannot be a reason for closure of Section 7 application. First, there has to be a specific direction for determining the valuation of shares by Hon'ble High Court and further it is an issue which is to be exclusively decided by the DRT in the OA proceedings which are pending consideration before it. 8. The directions given therein for deciding the Interlocutory Applications as referred to in Para 6 of the Judgment of 10.03.2021, cannot be taken as to be the basis for not to proceed with the proceedings under Section 7 of the I & B Code, 2016, which was the subject matter of consideration before the Ld. Adjudicating Autho....