The Supreme Court has held that when the National Company Law Tribunal (NCLT) exercises its power under Section 31(2) of the Insolvency and Bankruptcy Code, 2016 to not approve a resolution plan, then a reasoned order must be passed. It was emphasized that recording of cogent reasons while passing an order is the duty of Courts and Tribunals.
The Supreme Court has set aside an order whereby the NCLT kept the approval of a resolution plan in abeyance while directing an Official Liquidator to conduct re-valuation of the Corporate Debtors assets. Consequently, the order of National Company Law Appellate Tribunal (NCLAT) affirming the NCLTs order has also been set aside.
The Bench has further cautioned that the NCLT may direct re-valuati…
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