Prior Approval Of Adjudicating Authority Before Initiating Legal Proceedings Against Any Party U/S 33(5) Of IBC Is Mandatory: NCLT Guwahati

The NCLT Guwahati ruled that "prior approval of the adjudicating authority before initiating legal proceedings against any party under Section 33(5) is mandatory." Section 33(5) of the IBC deals with legal proceedings during liquidation. The tribunal emphasized that a liquidator or any party seeking to initiate or continue legal action involving the corporate debtor or its assets during liquidation must obtain explicit permission from the National Company Law Tribunal. This ensures judicial oversight and prevents multiplicity of proceedings, streamlining the liquidation process.