# In the matter of Kunal Finance & Credit Pvt. Ltd. Vs. Mani Square Ltd. CA(AT)(Ins)No. 514 of 2020

> NCLAT judgment dated 2020-06-08. Citation: TCN-2020-NCLAT-00240. The appeal concerns an order regarding the admission or rejection of an application under…

- **Court:** NCLAT
- **Order date:** 8 Jun 2020
- **Citation:** TCN-2020-NCLAT-00240
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/kunal-finance-credit-pvt-ltd-vs-mani-square-ltd-ca-0ee6466e

## Summary

### Background

The appeal concerns an order regarding the admission or rejection of an application under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority had previously directed the Corporate Debtor not to dispose of fixed assets to secure the interest of the Financial Creditor. This order was modified to require the Corporate Debtor to submit a specific plan before disposing of property to secure the interests of all stakeholders. The Adjudicating Authority was considering deferring the admission of the application under Section 7 at the behest of the Corporate Debtor.

## Facts

Kunal Finance & Credit Pvt. Ltd. (Appellant) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Mani Square Ltd. (Respondent/Corporate Debtor). The Adjudicating Authority had directed the Corporate Debtor not to dispose of fixed assets. The Corporate Debtor was required to submit a specific plan before disposing of property. The Corporate Debtor expressed an intention to settle the claim with the Financial Creditor. The corporate insolvency resolution process had not yet commenced. The Adjudicating Authority had neither admitted nor rejected the application under Section 7.

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in deferring the admission of the application under …

**Ratio:** The Adjudicating Authority has the discretion to consider the circumstances and defer the

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**Reasoning:** The court reasoned that since the corporate insolvency resolution process had not yet

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**Interpretation:** This interprets the Adjudicating Authority's power to defer admission under

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**Application:** The court applied this principle by allowing the Corporate Debtor to file

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## Parties

- **Judges:** Bansi Lal…; Jarat Kuma…; +1 more
- **Appellants:** Kunal Finance &…
- **Respondents:** Mani Squar…

## Timeline

- **2019-11-05 — Earlier…**: Order directing the ‘Corporate…
- **2020-06-08 — Order of…**: NCLAT disposes of the appeal, allowing the Corporate Debtor to file 'Settlement Terms'…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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