No Straight Jacket Formula Can Be Laid Down For Adjudication Of Application U/S 12A Of IBC & Objections Therein: NCLAT

The National Company Law Appellate Tribunal New Delhi bench of Justice Ashok Bhushan, Mr. Barun Mitra and Mr. Arun Baroka has held that no straight jacket formula can be laid down for adjudication by the Adjudicating Authority of a 12A application and the objections filed therein. Per contra, the Respondent submitted that after the CIRP was admitted under Section 7, the proceeding becomes “in rem” and HDFC Bank is also a stakeholder and creditor of the corporate debtor whose objection/claim was entitled to be considered before taking a decision under Section 12A application filed by the IRP on basis of settlement with another creditor SIDBI. While applying the above ratio to the facts of the present case, the Tribunal held that the Adjudicating Authority did not commit any mistake in allowing the HDFC Bank to file an application even after the settlement was arrived at between the parties and an application under section 12A was also filed by the IRP seeking withdrawal of CIRP application as it would have directly affected the interest of the Bank. No straight jacket formula can be laid down for adjudication by the Adjudicating Authority of a 12A application and the objections filed therein.