1. Overview of Corporate Insolvency Resolution Process (CIRP)
The Insolvency and Bankruptcy Code, 2016 (IBC) restructured corporate reorganization in India by shifting from a "debtor-in-possession" to a "creditor-in-control" regime. Under the IBC, when a corporate debtor defaults on a threshold debt of **₹1 Crore**, financial or operational creditors can initiate CIRP before the National Company Law Tribunal (NCLT).
2. Section 7 vs. Section 9 Insolvency Petitions
The statutory procedure differs significantly depending on the nature of the creditor:
- Section 7 Petitions (Financial Creditors): Banks, NBFCs, and home buyers can file directly before NCLT upon proving existence of financial debt and default. No advance demand notice is required.
- Section 9 Petitions (Operational Creditors): Suppliers, vendors, and service providers must first serve a mandatory **Section 8 Demand Notice** giving 10 days to pay. If the debtor proves a pre-existing dispute, the Section 9 petition is dismissed.
3. Section 14 Moratorium Protection
Upon admission of an insolvency petition under Section 7 or 9, NCLT issues a mandatory order under Section 14 declaring a **Moratorium**. This halts all pending civil suits, SARFAESI proceedings, arbitration trials, and asset transfers against the corporate debtor until CIRP completion.
NCLT Insolvency or Debt Recovery Practice
Our corporate litigation practice represents corporate debtors, financial institutions, and operational creditors before NCLT Chandigarh Bench and NCLAT New Delhi.
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