The National Company Law Tribunal (NCLT) at New Delhi has recently held that a Residents Welfare Association that is not authorised by individual homebuyers cannot initiate a corporate insolvency process on their behalf, particularly when those homebuyers do not individually meet the minimum debt threshold under the Insolvency and Bankruptcy Code.
A coram of Judicial Member Manni Sankariah Shanmuga Sundaram and Technical Member Atul Chaturvedi said the Code requires strict compliance with both the statutory debt threshold and the standing of the applicant when invoking Section 9-CIRP.
It noted that the application had not been filed by individual operational creditors or an authorised representative acting on their behalf, but by the…