Introduction to Prospect Legal

Prospect Legal is a trusted legal firm with over 15+ years of expertise in handling cases. With a proven track record in corporate litigation, insolvency, and dispute resolution, our firm has successfully assisted numerous businesses and individuals in navigating the complexities of insolvency proceedings. Our team comprises experienced lawyers specializing in corporate and insolvency laws, ensuring strategic legal solutions tailored to our clients’ needs.

At Prospect Legal, we provide comprehensive legal assistance in filing and resolving insolvency petitions before NCLT, guiding operational creditors through each step of the process with precision and efficiency.

Where You Can Find Remedies?

Insolvency petitions for operational creditors are handled under the jurisdiction of the National Company Law Tribunal (NCLT), which serves as the adjudicating authority for insolvency and bankruptcy matters in India. NCLT has the power to initiate, oversee, and adjudicate insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC).

If you are facing financial distress due to unpaid debts from a corporate debtor, consult with Prospect Legal to explore your legal options and recover your dues through the insolvency resolution process.

📞 Call us at 7000-12-7225

Understanding the Insolvency Process for Operational Creditors

Filing an insolvency petition as an operational creditor in NCLT follows a structured legal process. The steps include:

1. Pre-Filing Assessment

• Identifying outstanding dues and financial claims.
• Sending a statutory demand notice under Section 8 of IBC.
• Waiting for the 10-day response period from the corporate debtor.

2. Filing the Petition (Form 5 of IBC)

• Drafting and submitting the insolvency application before NCLT.
• Providing proof of debt, invoices, demand notices, and relevant financial documents.
• Ensuring compliance with legal requirements for proper submission.

3. Admission of Petition by NCLT

• NCLT reviews the petition and supporting documents.
• If found valid, NCLT admits the case and appoints an Interim Resolution Professional (IRP).
• A moratorium is declared, preventing any legal action against the debtor.

4. Resolution or Liquidation

• Corporate debtor can propose a settlement or restructuring.
• If no resolution is reached within 180 days (extendable to 270 days), liquidation proceedings commence.

Legal Protection Under Insolvency and Bankruptcy Code (IBC)

Section 8: When Can a Claim Be Filed?

Operational creditors can file an insolvency petition when:

• A corporate debtor defaults on payments exceeding INR 1 crore.
• A statutory demand notice is issued, and no payment or dispute resolution occurs within 10 days.

Section 9: Powers of NCLT as an Adjudicating Authority

• NCLT has the power to accept or reject an insolvency application based on evidence.
• If admitted, NCLT appoints an Interim Resolution Professional (IRP) to manage debtor assets.
• NCLT can order liquidation if no resolution is achieved within the stipulated time.

Process of Remedy Through Prospect Legal

Step 1: Initial Consultation & Case Assessment

• Comprehensive evaluation of outstanding claims.
• Identifying legal grounds for filing.
• Assessing financial and evidentiary aspects.
• Advising on risks and expected outcomes.
• Guiding clients on alternative legal remedies.

Step 2: Legal Documentation & Filing

• Drafting petitions and affidavits.
• Gathering required evidence and supporting documents.
• Preparing NCLT-compliant legal submissions.
• Filing the case with proper jurisdiction.
• Ensuring procedural accuracy for quick case acceptance.

Step 3: Compliance & Negotiations

• Handling all statutory compliances.
• Negotiating settlements where applicable.
• Representing clients in pre-trial hearings.
• Ensuring adherence to regulatory mandates.
• Providing strategic legal advisory at every stage.

Step 4: Resolution & Final Actions

• Arguing before NCLT for favorable rulings.
• Managing appeals and counterclaims if required.
• Ensuring legal enforcement of judgments.
• Assisting in post-judgment compliance.
• Providing continued legal support for future corporate matters.