Operational Creditor can only Trigger CIRP on Default in Payment: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has ruled that an operational creditor can only trigger the Corporate Insolvency Resolution Process (CIRP) upon a default in payment. This decision clarifies the conditions under which operational creditors can initiate insolvency proceedings and ensures that the process is not misused. The ruling emphasizes the importance of adhering to the provisions of the Insolvency and Bankruptcy Code (IBC) and upholding the rights of all stakeholders. This judgement brings more clarity to triggering CIRP.