Majority's Consideration Of Debt Restructuring With Corporate Debtor Does Not Bar Individual Member From Filing Petition U/S 7 Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has clarified that an individual member of a consortium of lenders retains the right to file an insolvency petition under the Insolvency and Bankruptcy Code (IBC) against a defaulting borrower, even if a majority of the lenders within the consortium are actively engaged in negotiations for a potential debt restructuring plan with the borrower. This ruling underscores the independent legal standing and rights of each financial creditor within a consortium, ensuring that the pursuit of insolvency proceedings by one lender is not automatically barred by the actions or preferences of the majority, particularly when individual lenders have legitimate concerns about the recovery of their dues.