In Brief
A financial creditor sought to initiate insolvency proceedings against a corporate debtor under section 7 of the Insolvency and Bankruptcy Code, 2016, regarding a restructured loan. The NCLT admitted the application, relying on the corporate debtor's own candid admission of outstanding debt made in an earlier counter affidavit. The NCLAT reversed this, holding that documents from the withdrawn petition were inadmissible. The Supreme Court allowed the appeal, holding that the NCLAT erred in treating the corporate debtor's own admission in a counter affidavit as a mere 'document' that could not be relied upon. The Court reinstated the NCLT's order, emphasizing that clear admissions of debt by the corporate debtor itself cannot be disregarded, and resolution proceedings resume accordingly.
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