“Initiation of CIRP is nothing more than the use of the IBC as a recovery mechanism. We will term it as an abuse of the process,” On April 23, 2026, the Supreme Court of India delivered a significant ruling, setting aside the NCLAT’s order directing admission of a Section 7 petition under the Insolvency and Bankruptcy Code, 2016, filed by a decree-holder money lender against a solvent and functioning corporate debtor. The Court held that invoking the insolvency process as a substitute for execution of a civil court decree amounts to an abuse of the IBC, and restored the NCLT’s order dismissing the Section 7 application.
The respondent, a money lender, had advanced two loans to the appellant company in 2010…