Whether initiation of CIRP by filing an application before the Adjudicating Authority amounts to a coercive step against the Corporate Debtor – V Hotels Limited Vs. Asset Reconstruction Company (India) Limited – NCLT Mumbai Bench
Hon’ble Bombay High Court had restrained from initiating any coercive steps against the Corporate Debtor. The issue before the Adjudicating Authority was whether initiation of CIRP by filing an application before the Adjudicating Authority amounts to a coercive step against the Corporate Debtor. The Adjudicating Authority held that the Code is not a coercive measure for the Corporate Debtor but for the defaulting management. What is sought to be achieved in the code is not shutting down of the Corporate Debtor, but reviving it by ousting the defaulter promoter/directors who were in control and management of the company, which took it down on its knees.
