Section 65 IBC requires specific proof of fraud or malice; a post-default NOC dispute cannot defeat insolvency.

A Section 65 IBC challenge requires specific pleadings and cogent material showing fraudulent or malicious initiation of insolvency proceedings. The application failed because no such material was produced, and the grievance over non-issuance of no-objection certificates was treated as a post-default issue that did not defeat the statutory consequences of admitted default. The availability of possession during CIRP and the effect of Regulation 4E of the CIRP Regulations also showed that the allottee-related grievance did not justify invoking Section 65. The rejection of the Section 65 plea was therefore sustained, and the insolvency admission process was left undisturbed.

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Issues: Whether the application under Section 65 of the Insolvency and Bankruptcy Code, 2016 was maintainable on the plea that the Section 7 proceedings were initiated fraudulently or with malicious intent because of non-issuance of no-objection certificates.

Analysis: The application under Section 65 contained no specific pleadings or cogent material to establish fraudulent or malicious initiation of the insolvency process. The grievance regarding non-issuance of no-objection certificates was held to be a post-default issue and did not displace the statutory consequences of an admitted default. The availability of possession during CIRP and the operation of Regulation 4E of the Insolvency Resolution Process for Corporate Persons Regulations, 2016 also showed that the allottee-related grievance did not furnish a ground to invoke Section 65.

Conclusion: The challenge under Section 65 failed and the rejection of that application was sustained.

Final Conclusion: The decision upheld the insolvency admission process and declined to interfere with the finding that the Section 65 plea was unsupported on merits.

Ratio Decidendi: A Section 65 proceeding requires specific pleadings and cogent proof of fraudulent or malicious initiation, and a post-default contractual grievance does not by itself bar or invalidate a Section 7 insolvency petition.

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