# In the matter of The Dhar Textile Mills ltd. Vs. Asset Reconstruction Company (India) Ltd. CA(AT)(Insolvency) 11-2019

> NCLAT judgment dated 7 Jan 2019. Citation: TCN-2019-NCLAT-00884. This appeal was filed by the corporate debtor, The Dhar Textile Mills Ltd., challenging an…

- **Court:** NCLAT
- **Order date:** 7 Jan 2019
- **Citation:** TCN-2019-NCLAT-00884
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/the-dhar-textile-mills-ltd-vs-asset-reconstruction-company-609e2245

## Summary

### Background

This appeal was filed by the corporate debtor, The Dhar Textile Mills Ltd., challenging an order dated November 19, 2018, issued by the Adjudicating Authority. The Adjudicating Authority had adjourned the matter and granted the financial creditor, Asset Reconstruction Company (India) Ltd., seven days to clarify or remove defects in its application. The corporate debtor's representative argued that the matter had been pending for approximately one year without a decision on the admission or rejection of the Section 7 application under the Insolvency and Bankruptcy Code. This delay was a significant concern for the corporate debtor, as it prolonged the uncertainty surrounding the insolvency proceedings.

## Facts

The corporate debtor, The Dhar Textile Mills Ltd., filed an appeal against an order dated November 19, 2018, issued by the Adjudicating Authority. This order had adjourned the matter and granted the financial creditor, Asset Reconstruction Company (India) Ltd., seven days to submit clarifications or remove defects in its application. The corporate debtor's representative, Mr. Pratik Tripathi, highlighted that the matter had been pending for approximately one year without any definitive order from the Adjudicating Authority regarding the admission or rejection of the application filed under Section 7 of the Insolvency and Bankruptcy Code. This prolonged delay was a primary point of contention for the appellant.

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in adjourning the application under Section 7 of…

**Ratio:** The Adjudicating Authority must adhere to the specific timelines provided under the…

**Reasoning:** The NCLAT found that the Adjudicating Authority was not justified in adjourning the…

**Interpretation:** The NCLAT interpreted the provisions of the I&B Code, particularly **Section…

**Application:** In this case, the Adjudicating Authority had adjourned the matter for nearly a…

## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Advocates:** For Appel…; Pratik Tr…; +5 more

## Timeline

- **November 23, 2017 — Application…**: The application under Section 7 of the I&B Code was filed by the financial creditor…
- **October 3, 2018 — Previous NCLA…**: The NCLAT passed an order in Company Appeal (AT)(Insolvency) No. 618 of 2018, directing…

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