The Supreme Court expressed grave concern over the misuse of the Insolvency and Bankruptcy Code through systematic asset undervaluation and pre-planned resolution processes, warning against insolvency becoming a shield for legitimising financial fraud.

The NCLAT held that a resolution plan approved without complete disclosure and valuation of all assets, including development rights and third-party secured interests, suffers from material irregularity in the conduct of the CIRP and cannot be sustained merely on the basis of Committee of Creditors’ approval.