Fraudulent Initiation of Insolvency Proceedings

The Supreme Court in Beacon Trusteeship Limited v. Earthcon Infracon Private Limited[1] held that the NCLT has the power to inquire into the fraudulent initiation of insolvency proceedings under Section 65 of the Insolvency and Bankruptcy Code, 2016 (‘IBC’). However, such pleas cannot be raised for the first time before appellate authorities i.e. National Company Law Appellate Tribunal (‘NCLAT’) and must be taken up before the NCLT.

[1] Civil Appeal No. 7461 of 2019.

Published In:Inter Alia - Quarterly Edition - June 2020 [ English
Date: June 30, 2020