The NCLAT addressed the maintainability of a section 7 ...

NCLAT clarified that certain allottees must meet new criteria for filing insolvency under IBC. Allottees like appellants must adhere to rules. Appeal denied.

Case Laws     Insolvency and Bankruptcy

July 4, 2024

The NCLAT addressed the maintainability of a section 7 application under the IBC, focusing on the threshold set by Amendment Act 1 of 2020. It was held that allottees, including those in the Assured Returns Class of Creditors, are covered under the definition of 'allottees'. The appellants, being part of this class, had to meet the threshold criteria introduced by the amendment, which they failed to do. The Adjudicating Authority correctly determined that the appellants, as allottees, must adhere to the second proviso of Section 7(1) of IBC. The appeal was dismissed as the appellants were deemed to still fall within the ambit of 'allottees' and were required to meet the threshold for filing a section 7 application.

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