Pending Scheme u/s 230 of Companies Act against CD not a ground to deny admission of CIRP: NCLAT

The Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) ruled that the pendency of a scheme under Section 230 of the Companies Act, 2013 does not justify denying admission of a Corporate Insolvency Resolution Process (CIRP) application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The case involved a CIRP petition by homebuyers of the Festival City Project against three corporate debtors, challenging non-completion of the project. \r

The NCLAT dismissed appeals by the corporate debtors against the maintainability of the CIRP petition, supported by subsequent interlocutory applications also dismissed by the adjudicating authority. Grand Developers Pvt. Ltd. sought to intervene, arguing its interests would be affected by the CIRP admission despite a pending Section 230 scheme. The NCLAT upheld the rejection of this intervention, affirming that the CIRP should proceed independently of the scheme's pendency. \r

This decision clarifies that IBC proceedings are not barred by the existence of a separate Companies Act scheme.