In a significant ruling, the NCLT admitted a CIRP petition valued at ₹38.28 crore, asserting that SARFAESI proceedings do not restrain corporate debtors from defaulting under the IBC framework.
NCLT Affirms CIRP Admission Despite SARFAESI Proceedings
The National Company Law Tribunal (NCLT) has admitted a Corporate Insolvency Resolution Process (CIRP) application concerning operational debt that totals ₹38.28 crore, clarifying that SARFAESI proceedings do not impede the initiation of CIRP under the IBC. This ruling provides important insights into the interplay between different insolvency frameworks.
The Tribunal asserted that the evidence of default was established and emphasized that the lack of a pre-existing dispute allowed for the admission of the CIRP plea. The judgment signals a strong message regarding the prioritization of debt resolution within the insolvency framework.
Practitioners in corporate and insolvency law should take note of this decision, as it clearly delineates the pathways for addressing corporate defaults independently of SARFAESI actions. This judgment may affect strategies for approaching insolvency and debt recovery matters.
Citations
- NCLT Order (2026) NCLT No. 1451139
