In application u/s 7 financial creditor and corporate debtor alone are necessary parties and no third party is contemplated

Case details: Vekas Kumar Garg v. DMI Finance (P.) Ltd. - [2021] 129 taxmann.com 391 (NCLAT- New Delhi)

Judiciary and Counsel Details

• • Justice Bansi Lal Bhat, Acting Chairperson and Dr. Ashok Kumar Mishra, Technical Member.
  • Dhruv Gupta, Ms. Preeti Kashyap and Ankit Sharma, Advs. for the Appellant.

Facts of the Case

In this instant case, the CIRP under section 7 was started against the corporate debtor by Adjudicating Authority/NCLT. The Appellant/Resolution Professional of the corporate debtor filed an application for his impleadment as a necessary party.

NCLT Held

However, the NCLT rejected the appellant’s application on the ground that the appellant was not a necessary party to proceedings as financial creditor and corporate debtor alone were a necessary party and Adjudicating Authority was, at the pre-admission stage, only required to satisfy that there was a financial debt in respect whereof corporate debtor has committed a default warranting triggering of CIRP; no third party intervention was contemplated. Therefore, there was no legal infirmity in the impugned order passed by Adjudicating Authority

Case Review

• • DMI Finance (P.) Ltd. v. Abloom Infotech (P.) Ltd. [2021] 129 taxmann.com 390 (NCLT – New Delhi) (para 5) affirmed

List of Cases Referred to

• • Dr. Vishnu Kumar Agarwal v. Piramal Enterprises Ltd. [2019] 101 taxmann.com 464/151 SCL 555 (NCL – AT) (para 2).