Power of NCLT to admit CIRP under Section 7(5)(a) IBC discretionary and not mandatory: Supreme Court

It is certainly not the object of the IBC to penalize solvent companies, temporarily defaulting in repayment of its financial debts, by initiation of CIRP, the Court held.
Supreme Court and IBC
Supreme Court and IBC

The Supreme Court has held that the power of the National Company Law Tribunal (NCLT) to admit an application for initiation of the corporate insolvency resolution process (CIRP) by a financial creditor under Section 7(5)(a) of the Insolvency and Bankruptcy Code, is discretionary and not mandatory (Vidarbha Industries Power Limited v. Axis Bank Limited).

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