Corporate Debtor Cannot Deny Transaction Which was once Approved :

The National Company Law Tribunal (NCLT) has affirmed the principle that a corporate debtor cannot later deny a transaction that it had previously approved and acted upon. The ruling came in a case where a company had approved a revised wage structure for its workers, made payments based on it, but later refused to honor subsequent invoices based on the same revised structure. The NCLT observed that the corporate debtor's initial acceptance and payment constituted a clear acknowledgment and approval of the new terms. Having done so, they are legally prevented (estopped) from later challenging the validity of those terms to avoid their payment obligations. This decision is crucial in upholding the sanctity of commercial agreements and preventing parties from arbitrarily reneging on their commitments. It ensures that once a transaction is approved and acted upon, it becomes a binding obligation.