The National Company Law Appellate Tribunal, Chennai ("NCLAT") set aside the decision of the National Company Law Tribunal, Bengaluru ("NCLT") whereby the NCLT had held that the Respondent/Corporate Debtor had sufficient income and assets to repay its debt and therefore could not be termed as 'Insolvent'.
This was held in the matter of Drip Capital Inc. vs. Concord Creations (India) P. Ltd. (Company Appeal (AT) (CH) (Ins.) No. 167 of 2021) decided on 8th November, 2021
The NCLAT observed that NCLT had exceeded its jurisdiction by taking the defense of the Corporate Debtor, especially in the absence of any 'Reply' or objections projected by the Corporate Debtor and by observing that the Respondent was not an 'Insolvent Company' and that the Respondent should be given some more time to repay the debt, and directed the Respondent to repay the balance debt or the amount as settled with the Appellant within a period of six months failing which the Appellant/Petitioner would be at liberty to file a fresh petition. The NCLAT was of the considered opinion that this would negate the principles laid down by the Hon'ble Supreme Court in paragraph 30 of Innovative Industries Ltd. Vs. ICICI Bank (2018) 1 SCC page 407.
Consequently, the NCLAT held that the impugned order suffered from patent legal infirmities and directed the NCLT to restore the Company Petition to its file, 'Admit' the same and to proceed further in accordance with Law.
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