NCLT - Corporate Insolvency
Chinnmay Shah 9 Oct 2020

NCLT - Corporate Insolvency

In an interesting ruling, NCLT Ahmedabad, has held that once a petition for corporate insolvency resolution process (IBC Petition) has been admitted by NCLT under the Insolvency and Bankruptcy Code, 2016, a pending oppression and mismanagement petition (Oppression Petition) does not survive and there is no reason for keeping the Oppression Petition in abeyance until the final outcome of the IBC Petition.

The NCLT observed that once an IBC Petition has been admitted, (a) it will end either in approval of a resolution plan or liquidation and under both circumstances the management will never come again in the hands of the suspended management, (b) dispute with regard to the oppression and mismanagement cannot be dealt with as the management itself is suspended and the company is under control of resolution professional.

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