CIRP Cannot be Shield to Corporate Applicant to avoid Legally Recoverable Government Obligations: NCLT

The National Company Law Tribunal (NCLT) has ruled that a Corporate Insolvency Resolution Process (CIRP) cannot be used as a shield by a corporate applicant to avoid legally recoverable government obligations. This decision clarifies that while CIRP provides a framework for resolution, it does not extinguish statutory dues owed to the government. The NCLT emphasized that government dues are paramount and must be addressed within the resolution plan or through other recovery mechanisms. This ruling prevents companies from misusing the insolvency framework to escape their financial responsibilities to the state, ensuring that government revenues are protected and the integrity of the insolvency process is maintained.