Viability Of Corporate Debtor Can't Be Considered While Deciding Petition U/S 7 Of IBC Once Debt & Default Are Established: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has ruled that the viability of a corporate debtor cannot be considered while deciding a petition under Section 7 of IBC once debt and default are established. This crucial decision clarifies the narrow scope of inquiry for admitting an insolvency application under Section 7 of the IBC (filed by financial creditors). The NCLAT emphasized that once a debt and a default in repayment are proven, the adjudicating authority's role is primarily to admit the petition, not to assess the company's financial health or prospects. This promotes faster admission of insolvency proceedings, focusing on default as the trigger.