The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that the mere signing of a Master Restructuring Agreement, wherein a third party undertakes to discharge the liabilities of the Corporate Debtor, does not result in the extinguishment of the Corporate Debtor’s obligations if the restructuring subsequently fails. It cannot be presumed that liabilities have been transferred solely due to the existence of a restructuring agreement. For such a transfer or extinguishment to be valid, the conditions under Section 62 of the Indian Contract Act—specifically, mutual agreement between the original parties for substitution or…
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