Petition filed by Operational Debtor dismissed by NCLT on the contention of existing dispute raised by Corporate Debtor

Last updated: 22 June 2023

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The National Company Law Appellate Tribunal (NCLAT) has overturned a National Company Law Tribunal (NCLT) decision that dismissed a petition filed by an operational debtor. The NCLT had initially dismissed the petition based on a dispute raised by the corporate debtor. However, the NCLAT found that the corporate debtor was attempting to evade payment by using the dispute as a shield, particularly concerning liabilities incurred before a change in management. The NCLAT emphasised that a change in management does not extinguish past debts and that the corporate debtor's admission of liability prior to this change was significant.

Court :
NCLAT

Brief :
The petition filed by Operational Debtor has been dismissed by the NCLT on the contention of existing dispute raised by Corporate Debtor. The NCLAT revised the order passed by NCLT and allowed the petition since Corporate Debtor was trying to take advantage for non-payment of debt once admitted by it under shelter of provisions of Section 9.

Citation :
COMPANY APPEAL (AT) (INS.) NO. 1088 OF 2022

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FCS Deepak Pratap Singh

Associate Vice President - Secretarial & Compliance (SBI General Insurance Co. Ltd.)

Dear Friends, MyselfFCSDeepak P. Singh ( B.Sc.. LLB, FCS. FIII, CIAFP, CRMP, ID) , A Fellow Member of ICSI, Law Graduate ,Fellow Member of Insurance Institute of India, Certified Independent Director ,Certified Insurance Anti Fraud Professional , Certified Risk Governance Professional ( ICSI-III) and cleared Limited I ... Read more

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