Supreme Court says insolvency proceedings need not end merely because the application that began them was fraudulent

1 October 2026

In Orris Infrastructure Private Limited v. Rakesh Kumar Gupta, the Supreme Court held that the admission of a Section 9 application under the Insolvency and Bankruptcy Code can be recalled if it was induced by fraud or collusion.
The Court added that recalling the admission does not automatically end the corporate insolvency resolution process.
The bench of Justices P.S. Narasimha and Alok Aradhe said the initiating creditor is only the triggering creditor and not the proprietor of the process.
Once admitted, the process works in rem, that is for all creditors and stakeholders together, and can continue even without the original applicant.
The Court remanded the matter to the National Company Law Tribunal, which must consult the resolution professional, the committee of creditors and stakeholders including homebuyers before deciding whether the process should go on.
The Court also said proceedings under Section 65 may be considered against the party that initiated the process fraudulently.
The judgment was delivered on 30 September 2026.