In Brief
Financial creditors of a real estate company sought to initiate insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code after the company defaulted on payments. The lower courts dismissed the petition at the pre-admission stage because settlement negotiations were ongoing, and directed the company to settle within three months. The Supreme Court held that the Adjudicating Authority can only admit or reject a Section 7 petition under the statutory framework and cannot direct settlements or abdicate its jurisdiction. Since a default occurred and the application was complete, the petition should have been admitted. The Court allowed the appeal and remitted the matter for fresh adjudication.
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