NCLT admits ₹7.28 crore insolvency petition based on NeSL records and loan documents. Tribunal holds commercial viability cannot override established financial debt and default under IBC.
NCLT Admits ₹7.28 Crore Insolvency Plea Despite Commercial Viability Objection
The National Company Law Tribunal (NCLT) has admitted a financial creditor’s insolvency petition involving a default of ₹7.28 crore, rejecting the corporate debtor’s defense that it remains commercially viable. The tribunal found the financial debt and default proven through loan agreements and records from the National e-Governance Services Limited (NeSL).
The corporate debtor argued that ongoing operations and revenue generation rendered the initiation of CIRP unjustified. However, the NCLT reiterated settled jurisprudence that commercial viability is not a valid ground to resist admission under Section 7 of the IBC. The focus remains on whether a financial debt exists and whether a default has occurred — both of which were established on record.
This ruling reinforces the creditor-centric framework of the IBC, ensuring that procedural objections based on business performance do not dilute the statutory right to initiate resolution. Lawyers should emphasize evidentiary preparation, particularly certified records from information utilities, to preempt such objections during admission hearings.
Citations
- Insolvency and Bankruptcy Code, 2016, Section 7
- Information Utility Regulations, NeSL Records
