Application u/s 9 of IBC Cannot be Admitted When Debt is Discharged by Corporate Debtor: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has ruled that an application under Section 9 of the Insolvency and Bankruptcy Code (IBC) cannot be admitted when the debt has been discharged by the corporate debtor. This decision clarifies the conditions for initiating insolvency proceedings. The NCLAT emphasized the importance of verifying debt status before admitting applications under the IBC. This ruling ensures that insolvency proceedings are not initiated against debtors who have already settled their dues. The judgment provides clarity on the application of the IBC, preventing misuse and protecting the interests of corporate debtors. This decision upholds the principle of fair and just insolvency proceedings.