Judgement Of Vidarbha Industries Power Limited: A Shift To The Dark Era Of Debt Recovery Regime

Sagnik Aditya, St. Xavier’s University, Kolkata

ABSTRACT

The recent judgement of the Supreme Court in the case of Vidarbha Industries Power Limited versus Axis Bank Limited has presented a notable shift in the interpretation of Section 7(5)(a) of the Insolvency and Bankruptcy Code. This provision concerns the discretionary power of the National Company Law Tribunal (NCLT) to decide on the admission of an application made by a financial creditor for the initiation of insolvency proceedings against a corporate debtor. The earlier judicial stance held that once a financial creditor had established the existence of a debt, the NCLT had no discretion but to admit the application. However, the Supreme Court's latest ruling has expressed a contrary view, emphasizing the NCLT's discretionary power to consider other relevant factors before deciding on the admissibility of the application. The significance of this judgment lies in the broader implications it may have for the interpretation and implementation of the Insolvency and Bankruptcy Code. By examining the legal precedent and the reasoning behind the Supreme Court's decision, this research seeks to provide a comprehensive analysis of the impact of this landmark ruling on the insolvency regime in India.