The Supreme Court stressed that admission fundamentally alters the nature of insolvency proceedings. Management passes to the resolution professional, claims from creditors are invited and a Committee of Creditors (CoC) is constituted, the Court said.
Hence, the CIRP can continue even in the absence of the original applicant, the Court underscored.
The Court held that even where the original application was fraudulent, the NCLT can exclude the collusive applicant from participating in the process and consider initiating proceedings against it under Section 65 of the Insolvency and Bankruptcy Code.
The NCLT must then independently decide whether continuation of the CIRP would serve the larger interests of resolving the corporate debtor’s…