Pendency of suit not a bar to admit Sec 7 IBC plea by financial creditor, NCLAT

Aditi Singh October 5 2019
financial creditor

The National Company Law Appellate Tribunal (NCLAT) has held that the pendency of a suit with respect to a dispute associated with a default cannot be a ground to reject an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by a Financial Creditor.

A pre-existing dispute cannot be a subject matter of Section 7 IBC, though it may be relevant under Section 9 of IBC, the Appellate Tribunal has held.

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