#NCLAT judgment

NCLAT upholds liquidation of a corporate debtor after the resolution applicant failed to secure RBI approvals within the one-year deadline under Section 31(4) of the Insolvency and Bankruptcy Code. The ruling reinforces strict compliance with regulatory timelines, impacting insolvency practitioners and creditors in CIRP proceedings.

NCLAT holds that any renewal, novation, or variance of credit facilities without the personal guarantor's consent automatically discharges their liability under Section 133 of the Indian Contract Act. This ruling reinforces the protection of guarantors under the IBC and sets a precedent for creditors to secure explicit consent for modifications.

NCLAT holds that disbursements made into unauthorized accounts through fraudulent means cannot be classified as financial debt under the Insolvency and Bankruptcy Code, 2016. The ruling bars initiation of Corporate Insolvency Resolution Process (CIRP) where loan agreements lack valid authorization, reinforcing the doctrine of indoor management in financial transactions.