This is the second such observation from the Chennai bench of the insolvency appellate tribunal this month, after declining to entertain the petition from operational creditors.
Earlier, it had refused to entertain an insolvency petition against Wipro after observing that the bankruptcy law cannot be used as a means to recover debt against solvent companies.
Again, while rejecting a plea against United Telecoms last week, a two-member bench comprising justices M Venugopal and Shreesha Merla said: “Time and again, the apex court in a catena of judgments held that the IBC is not a ‘recovery mechanism’.”
The appellate tribunal upheld the order by the Bengaluru bench of the National Company Law Tribunal (NCLT), which had dismissed the plea moved by an operational creditor claiming a default of Rs 8.46 crore against United Telecoms.
Counsel for the appellant submitted that the amounts which are balanced and due and payable fall within the definition of ‘Operational Debt’ and therefore NCLT has erred in dismissing its plea.