Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 empowers the Adjudicating Authority to ascertain whether the documents annexed with the application under Section 10 of IBC Code are in order or not. It does not empower the Adjudicating Authority to examine the financial statements annexed with the application.
National Company Law Appellate Tribunal (NCLAT), New Delhi was hearing the case of JKS The Banyaan Private Limited v. Bank of Baroda, REED 2021 NCLAT Del 1339. In the above case, the Adjudicating Authority had analyzed the financial statements of the corporate applicant and held that there are discrepancies in financial statements. The Appellate Authority observed that the Adjudicating Authority exceeded its jurisdiction in analyzing the financial statements of the Corporate Applicant.