#Section 65 IBC

NCLAT rules that a single creditor’s unjustified refusal to accept repayment of an admitted debt during CIRP constitutes abuse of process under Section 65 IBC, warranting termination of insolvency proceedings. The ruling protects corporate debtors from frivolous or malicious creditor actions that undermine the IBC’s objectives.

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.