Payment Made During Pendency Of CIRP Application Cannot Be Considered For Calculating Threshold U/S 4 Of IBC: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) has ruled that payments made during the Corporate Insolvency Resolution Process (CIRP) cannot be considered when calculating the default threshold for initiating insolvency proceedings. This decision is significant as it prevents creditors from artificially inflating their claims by including payments received during the CIRP to meet the minimum ₹1 crore default threshold required under Section 4 of the Insolvency and Bankruptcy Code (IBC). The ruling aims to ensure that the insolvency process is initiated based on genuine and undisputed defaults, preventing misuse of the IBC framework for tactical purposes.