NCLT admitted insolvency petition after confirming financial debt and default exceeding statutory ₹1 crore limit, despite prior registry defect.
Financial Debt Over ₹1 Crore Validates Section 7 Petition
The National Company Law Tribunal (NCLT) admitted a Section 7 insolvency petition after determining that the financial debt and default collectively exceeded the statutory threshold of ₹1 crore. The application was initially filed on 19 June 2025 but was withdrawn due to registry defects, with the tribunal granting liberty to refile.
Upon refiling, the NCLT verified the documentary evidence of loan agreements, repayment defaults, and outstanding dues. It held that the threshold is based on the total debt owed, not the individual petitioning creditor’s exposure. This aligns with precedents affirming that the entry barrier under Section 4 is jurisdictional and must be strictly satisfied.
The ruling reinforces procedural flexibility for technical defects while maintaining jurisdictional rigor. Practitioners should ensure threshold compliance at the outset and promptly refile with corrections when permitted.