Acceptance Of Partial Payments Doesn't Negate Default Or Legitimacy Of Insolvency Proceedings: NCLAT

The National Company Law Appellate Tribunal, led by Justice Ashok Bhushan, affirmed that partial payments accepted by creditors don't nullify defaults or legitimize insolvency proceedings' termination.\r

In a case involving a corporate debtor's loan default, the tribunal upheld the Financial Creditor's right to initiate insolvency proceedings despite the debtor's partial payment attempts. The debtor's acknowledgment of debt and inability to repay, along with documented defaults, validated the creditor's actions. \r

Compliance with Insolvency and Bankruptcy Code provisions was confirmed, as the debt exceeded the threshold for insolvency initiation. The tribunal dismissed the debtor's appeal, affirming the Adjudicating Authority's decision to admit the insolvency petition and commence Corporate Insolvency Resolution Process (CIRP).