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Informative

Liquidation Is Only Recourse When Sole Financial Creditor Is A Related Party: NCLAT New Delhi

Update / Judgement Date

01 Sept 2025

Source

Live Law

Author

Team — WCP Legal Desk

Reading Time

1 min read

Corporate Law & GovernanceInsolvency & Bankruptcy Code

The NCLAT has ruled that "liquidation is the only recourse when the sole financial creditor is a related party." The court's decision, which is a significant victory for the government, was made on the grounds that the company's claim was not supported by evidence. The ruling clarifies that a company can be held responsible for the misdeeds of another person.