The Supreme Court has held that a company’s profitability cannot shield it from insolvency proceedings once a financial debt and a default exceeding the statutory threshold are established.
The Bench of Justices Dipankar Datta and Augustine George Masih has clarified that admission of a financial creditor’s application under Section 7 of the Insolvency and Bankruptcy Code, 2016 does not require a detailed reconciliation of accounts or a final determination of the precise amount outstanding.
The bench upheld the National Company Law Tribunal’s orders admitting the insolvency applications filed by Omkara Assets Reconstruction Private Limited and directed that the Corporate Insolvency Resolution Process against both companies proceed…