NCLAT Holds that Notice Not Given to Creditors Does Not Vitiate Proceedings under Section 10 of IBC

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Jul 28, 2023

NCLAT Holds that Notice Not Given to Creditors Does Not Vitiate Proceedings under Section 10 of IBC

In the case of SMBC Aviation Capital Ltd. v. Interim Resolution Professional of Go Airlines (India) Ltd.,^[1] the Hon’ble National Company Law Appellate Tribunal (‘NCLAT’) held that the statutory scheme under Section 10 of the Insolvency and Bankruptcy Code, 2016 (‘IBC’), does not contain any obligation of issuing notice by the corporate applicant to its creditors. However, the NCLAT held that any objector appearing at the time of hearing has to be heard. The mere fact that no notice was given to the objectors before proceeding to hear the corporate applicant cannot be held to vitiate any procedure or violating the principles of natural justice.

[1] SMBC Aviation Capital Ltd. v. Interim Resolution Professional of Go Airlines (India) Ltd., 2023 SCC OnLine NCLAT 230.

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