2025 (6) TMI 126 - SCH - IBC

Corporate Insolvency Resolution Must Consider Entire Business Operations, Not Just Single Project Under IBC Section 7

SC affirmed NCLAT's interpretation of IBC Section 7, ruling that insolvency proceedings cannot be limited to a single project of the Corporate Debtor. The ... Confinement of CIRP to a single project, 'Spaze Arrow' - admission of Section 7 Application filed by Respondents - it was held by NCLAT that 'Considering the facts and circumstances, which have been brought on the record by the parties, are of the view that at this stage, it is not persuaded to pass an order, confining the CIRP to only one Project, i.e. Spaze Arrow, as prayed in the Application filed by the Appellant/ Applicant.' HELD THAT:- The view taken by the National Company Law Appellate Tribunal (NCLAT) that the order under Section 7 of the Insolvency and Bankruptcy Code, 2016 cannot be confined only to one project of the Corporate Debtor (CD). The appeal is dismissed. The Supreme Court, through Hon'ble Justices Abhay S. Oka and Augustine George Masih, upheld the National Company Law Appellate Tribunal's (NCLAT) interpretation regarding Section 7 of the Insolvency and Bankruptcy Code, 2016. The Court held that an order under Section 7 'cannot be confined only to one project of the Corporate Debtor (CD).' Consequently, the appeal was dismissed, while explicitly leaving 'all contentions of the parties in the pending proceedings... open.' Pending applications were disposed of.