The National Company Law Appellate Tribunal (NCLAT) has set aside the Corporate Insolvency Resolution Process (CIRP) initiated against Vikram Solar Limited, holding that the amount in default fell below the statutory threshold of ₹1 crore prescribed under Section 4 of the Insolvency and Bankruptcy Code (IBC).
The order was passed in an appeal challenging the National Company Law Tribunal (NCLT), Kolkata Bench’s decision admitting an application under Section 9 of the IBC filed by operational creditor Isitva Steels Private Limited.
The NCLT had admitted the insolvency petition filed by Isitva Steels Private Limited over an alleged operational debt arising from civil works executed for a solar power project undertaken by Vikram Solar. Pursuant to the admission order, the Corporate Insolvency Resolution Process (CIRP) was initiated against the company. Soon thereafter, the NCLAT had granted an interim stay on the operation of the admission order pending consideration of Vikram Solar’s appeal.
However, the NCLAT has now reversed the decision of NCLT, holding that the amount of default that could be considered for the purposes of initiating insolvency proceedings was below the minimum threshold of ₹1 crore, rendering the Section 9 application not maintainable. Consequently, the appellate tribunal set aside the NCLT’s admission order and terminated the CIRP against Vikram Solar.