The observations from a two-member NCLAT bench came as it upheld an order of the National Company Law Tribunal (NCLT)The National Company Law Appellate Tribunal (NCLAT) has said insolvency proceedings cannot be triggered on the basis of debt that has been converted into capital such as equity of a company. The appellate tribunal also said any investment cannot be financial debt and the provisions of Section 7 of the Insolvency & Bankruptcy Code provides for initiation of CIRP by a financial creditor only and that too, if there is debt and default. CIRP is Corporate Insolvency Resolution Process.
The observations from a two-member NCLAT bench came as it upheld an order of the National Company Law Tribunal (NCLT), which on November…
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