Commercial insolvency not proved, so a corporate debtor's insolvency application under the IBC was held not maintainable.

A corporate applicant seeking CIRP under the Insolvency and Bankruptcy Code must establish commercial insolvency. The NCLT found that the applicant itself claimed ownership of an unencumbered immovable property of substantial value sufficient to meet outstanding liabilities, and it also considered the objections of financial creditors and the fact that the arbitration award against the applicant remained unchallenged. On those facts, the Tribunal held that commercial insolvency was not established, so the Section 10 application was not maintainable and was dismissed.

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Issues: Whether the corporate applicant was commercially insolvent and entitled to initiation of corporate insolvency resolution process under Section 10 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The Tribunal noted that the corporate applicant itself had asserted ownership of an unencumbered immovable property of substantial value, which was stated to be sufficient to meet the outstanding liabilities. It also took into account the objections of the financial creditors and the fact that the arbitration award against the applicant had not been challenged. On these facts, the Tribunal held that the applicant had not established commercial insolvency for invoking the insolvency process under the Code.

Conclusion: The application under Section 10 was not maintainable and was liable to be dismissed.

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