NCLT Admits CIRP Despite Settlement Discussions

The Bengaluru Bench of the National Company Law Tribunal (NCLT) has admitted an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) filed by an operational creditor against a paper manufacturing company for default in payment of operational debt exceeding ₹1.96 crore. 

The Tribunal held that ongoing settlement discussions, financial difficulties, and pendency of SARFAESI proceedings do not constitute a valid defence where the existence of operational debt, occurrence of default, and absence of any pre-existing dispute stand established.