The Supreme Court recently held that the National Company Law Tribunal (NCLT) can recall an order admitting insolvency proceedings if it later finds that the case was started through fraud or collusion. This can include cases where the claimed debt, which formed the basis for starting the insolvency process, is found to be fraudulent.
A Bench of Justices P S Narasimha and Alok Aradhe said that certain basic facts, such as the existence of a debt, must be established before a court or tribunal can assume jurisdiction over a case. The Bench said these are known as “jurisdictional facts” and form the basis for starting insolvency proceedings under Sections 7, 9 or 10 of the Insolvency and Bankruptcy Code, 2016.
When Can NCLT Recall CIRP…