The NCLAT annulled the admission of a Section 9 insolvency application due to the admitted debt being less than ₹1 crore, ordering a refund of ₹91.98 lakh. This ruling clarifies the threshold for invoking insolvency proceedings under Section 9.
NCLAT Sets Aside Section 9 Insolvency Admission for Debt Below ₹1 Crore
The National Company Law Appellate Tribunal (NCLAT) has set aside the admission of an insolvency application under Section 9 of the Insolvency and Bankruptcy Code, 2016, after both parties acknowledged that the outstanding debt was below the ₹1 crore threshold. Consequently, the NCLAT ordered the refund of a deposit amounting to ₹91.98 lakh.
The NCLAT’s decision reflects the statutory requirement under Section 9, which mandates that the quantum of the debt must meet the minimum threshold for an insolvency case to proceed. In this instance, the parties’ admissions were pivotal in determining the appeal's outcome.
This ruling emphasizes the importance of adherence to monetary limits set by the legislative framework governing insolvency, thereby providing clarity to practitioners in corporate insolvency matters.
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