CIRP Application Made By Financial Creditor Under The Insolvency Code: Does NCLT Have Any Discretion?

Abstract- This article analyzes the recent judgement of the Supreme Court in the case of Vidarbha Industries Power Limited v. Axis Bank Limited, which upheld the discretionary power of the Adjudicating Authority to admit the application for initiation of the corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016.

INTRODUCTION

The Insolvency and Bankruptcy Code, 2016¹ (‘Insolvency Code'), is umbrella legislation which primarily aims at a resolution of distressed entities in a timely manner. The Insolvency Code schemes to first ensure resolution of such entity as and when a default occurs by an application to the Adjudicating Authority either by the corporate debtor itself or by a financial or operational creditor.²