The NCLAT has affirmed that a request for the initiation of the Corporate Insolvency Resolution Process(CIRP) under sections 7 and 9.
Judgment, which is titled Pioneer Urban Land and Infrastructure Ltd. and Anr. v. Union of India and Ors. upholds the constitutional validity of Section 5(8)(f) of the Insolvency & Bankruptcy Code, 2016 (hereinafter as the ‘Code’).
In this article we have discussed about how an Operational creditor can file an application for initiation of Corporate Insolvency Process against it debtors.
The scheme as provided under the Code stipulates a mechanism wherein the Insolvency Resolution Process is reckoned upon any default upon non-payment of debt due.
An operational creditor as defined under s 5(20) of the Insolvency and Bankruptcy Code as a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred
The Insolvency and Bankruptcy Code (Amendment) bill 2017, describes the Financial Creditor and the Operational Creditor and the ambit of its applicability on creditor-debtor relationship.
The IBC has introduced new and distinct concepts of ‘Financial Creditor’ and ‘Operational Creditor’ as opposed to the Companies Act, 2013 which merely introduced the term ‘creditor’, without any classification thereof.