CIRP Cannot be Continued When Entire Debt Amount has Been Re-Paid: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has ruled that a Corporate Insolvency Resolution Process (CIRP) cannot be continued once the corporate debtor has repaid the entire admitted debt amount owed to the Committee of Creditors (CoC). The tribunal terminated the CIRP in a case where the debtor had cleared all dues, and the only remaining issue was a dispute over the inflated fees claimed by the Resolution Professional. The NCLAT observed that the primary objective of the Insolvency and Bankruptcy Code (IBC) is the resolution of insolvency and the revival of the corporate debtor, not its liquidation. Once the debt that triggered the insolvency process is fully settled, there is no longer any basis for continuing the CIRP. This judgment prevents the misuse of the insolvency process for other purposes, such as fee recovery, and ensures that proceedings are concluded once their main purpose has been achieved.