In what may be a future relief for corporate debtors facing insolvency proceedings, the Supreme Court used its extraordinary constitutional powers to allow two companies to withdraw from insolvency proceedings and settle their loan dispute despite the case having been admitted by the National Company Law Tribunal (NCLT).
Once the NCLT admits a case for initiating corporate insolvency resolution process under the Insolvency and Bankruptcy Code of 2016, the case cannot be withdrawn even if the parties have decided to settle.
However, a Bench of Justices Rohinton Nariman and S.K. Kaul used the Supreme Court’s powers to do complete justice under Article 142 of the Constitution to bring a quietus to the financial dispute between Lokhandwala K…
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