Corporate Debtor Cannot Be Dragged Into CIRP Mala Fide & For Any Purpose Other Than Resolution Of Insolvency: A Progressive Stand By NCLT
Dr. Sujatha Patil, Principal of Law Program, School of Business and Law, Navrachana University, Vadodara
ABSTRACT
Under the IBC (Insolvency and Bankruptcy Code), each creditor, whether financial or operational, must establish a claim and initiate an insolvency resolution process according to a specific process. If the procedures are not followed properly, the corporate debtor has a very good defence to protect his interest. Recently, in case of B.K. Educational service Pvt, Hon’ble Supreme Court, upheld the applicability of the Limitation Act to the IBC application and default.
If the creditor's claim is not genuine or harasses the corporate debtor, the corporate debtor can protect himself from filing insolvency petition against him. When a claim is made against a corporate debtor, the corporate debtor must examine the account to determine if the claim being made is genuine. The main object of Insolvency regime is to balance the interest of all the stakeholders, I mean it is not just meant to protect the interest of financial & operational creditors but also protects corporate debtors too. With this backdrop, the present paper focus on the recent stand taken by National Company Law Tribunal (NCLT) in protecting the interest of corporate debtors, in case they have been drawn to Corporate Insolvency Resolution Process (CIRP) without any justifiable ground. The author try to examine, the stand taken by the NCLT is progressive in nature in fulfilling the object of the Insolvency Regime.
