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Application under Section 7 of I&B Code is to be rejected only after giving opportunity to rectify defect

In Satyaprakash Aggarwal v. Vistar Metal Industries (P) Ltd., the petitioners were financial creditors of the respondent company. They filed an application under Section 7 for initiating the insolvency resolution process. However, such an application was rejected by the Adjudicating Authority observing that the application did not disclose ‘dates of default’. The petitioners were in appeal against the said order of the Adjudicating Authority.

The NCLAT after considering the record held that the impugned order was not sustainable. The application was rejected on technical grounds. As stated by the petitioners, there was only a typographical defect as to the dates mentioned in the application, which could have easily been corrected. The Tribunal held that before rejecting petitioners’ application, the Authority must give opportunity to the applicants to rectify defect. In absence of such an opportunity, the impugned order was set aside. Appeal was accordingly disposed of. 

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