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An unsettling precedent under IBC

The Supreme Court order is not aligned with the policy and legislative intent underlying the IBC

Gausia Shaikh & Bhargavi Zaveri

In a widely reported order, the Supreme Court allowed a debtor to settle a claim with a creditor after the collective resolution process was triggered under the Insolvency and Bankruptcy Code (IBC), 2016. The short story of the litigation leading up to the Supreme Court order is as follows. In June 2017, the National Company Law Tribunal (NCLT), the adjudicating tribunal under the IBC, had admitted an application for triggering the IBC against a debtor. Thereafter, the debtor and the creditor who had applied for triggering the IBC, settled their claim. The debtor appealed to the National ...