#fraudulent initiation

The NCLAT held that a fraud-initiation claim under Section 65 IBC must be raised before the Adjudicating Authority and cannot be raised for the first time on appeal, forcing parties to raise such allegations at the CIRP stage to avoid belated challenges.

NCLAT clarifies that Section 65 IBC cannot be invoked to re-agitate debt claims already adjudicated under Section 7 unless specific pleadings of collusion are made. The ruling shields corporate debtors from frivolous CIRP recalls based on mere assignment disputes without evidence of fraudulent intent.