New Delhi, Feb. 25 -- The Supreme Court on Tuesday observed that the existence of a debt restructuring arrangement does not prevent the initiation of a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC).

A Bench of Justices Sanjay Kumar and K Vinod Chandran set aside a ruling of the National Company Law Appellate Tribunal (NCLAT), which had rejected a Section 7 application on the ground that a restructuring arrangement was in place.

Debt and Default Key for Admission

The Court clarified that for admitting a Section 7 application, the adjudicating authority only needs to determine whether a financial debt exists and whether there has been a default.

Internal communications regarding restructur...