The National Company Law Appellate Tribunal (NCLAT) in Delhi has held that a proposed scheme of compromise under the Companies Act and ongoing one-time settlement (OTS) negotiations cannot prevent the admission of insolvency proceedings once financial debt and default are established.
A bench of Judicial Member Justice N. Seshasayee and Technical Members Arun Baroka and Indevar Pandey held that the National Company Law Tribunal (NCLT) was justified in admitting insolvency proceedings against KKSPUN India Limited over Yes Bank’s claim of about ₹32.57 crore.
“Until such Scheme under section 230 is approved in accordance with law and becomes binding upon all stakeholders, it remains only a proposal. The Court cannot refuse to admit a…