The Supreme Court has held that a company’s profitability cannot shield it from insolvency proceedings under the Insolvency and Bankruptcy Code (IBC) once a financial debt and default exceeding the statutory threshold are established, with the apex court upholding the National Company Law Tribunal’s orders admitting insolvency applications against GSTAAD Hotels and Neo Capricorn Plaza. A Division Bench of Justices Augustine George Masih and Dipankar Datta, while dismissing appeals filed by Deepak Raheja and another appellant challenging the National Company Law Appellate Tribunal’s August 19, 2025 order, held that Section 7 proceedings require proof of financial debt and default, not a detailed audit of every account entry.
The…