The Supreme Court has set aside a judgment of the National Company Law Appellate Tribunal (NCLAT) and restored the order of the National Company Law Tribunal (NCLT) admitting an insolvency petition against Dhanlaxmi Electricals Private Limited. The Court held that the defense of a pre-existing dispute raised by the Corporate Debtor was “mere moonshine” and contradicted by its own ledger account and subsequent payments.
The legal issue before the Apex Court involved the initiation of the Corporate Insolvency Resolution Process (CIRP) by an operational creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC). The NCLT, Mumbai Bench-IV, had admitted the application filed by M/s. Saraswati Wire and Cable Industries….