Supreme Court: In two appeals against the NCLAT’s judgment upholding the admission of GSTAAD Hotels Pvt. Ltd. and Neo Capricorn Plaza Pvt. Ltd. into CIRP, the Division Bench of Augustine George Masih* and Dipankar Datta, JJ. held that at the admission stage, default only has to be shown on a preponderance of probabilities from the documents on record. The Court said the adjudicating authority (AA) does not need to work out the exact amount owed. It also held that a record of default from an information utility (IU) is enough by itself, and that a company being profitable is no answer to default.
Background
In December 2017, Piramal Finance Ltd. (later “PCHFL”), gave a ₹600 crore loan to GSTAAD Hotels (which runs the JW…