NCLT Admits ₹7.28 Cr Plea Despite Debtor’s 'Commercial Viability' Claim

Commercial Viability Not Shield Against CIRP: NCLT Rules

The National Company Law Tribunal (NCLT) has admitted a ₹7.28 crore insolvency petition despite the corporate debtor’s argument that it was ‘commercially viable’. The tribunal held that commercial viability, while relevant during resolution, cannot be grounds for rejecting an application at the admission stage under Section 7 of the IBC. The financial debt and default were established using loan agreements, repayment records, and data from the National E-Governance Services Limited (NeSL).

The debtor sought dismissal on the grounds of ongoing revenue streams and profitability. However, the NCLT reiterated that the purpose of the IBC is to enforce creditor discipline and that the threshold for admission—existence of debt and default—is objective. Reliance was placed on Jaypee Infratech v. NBCC, where the Supreme Court clarified that viability must be assessed during the resolution phase, not at inception.

For legal practitioners, this reinforces the limited scope of judicial review during admission. Debtors cannot stave off CIRP merely by demonstrating liquidity in some accounts. The case strengthens the evidentiary role of NeSL and emphasizes structured documentation by financial creditors for faster admission.