The Bengaluru Bench of the National Company Law Tribunal (NCLT) on 12 October held that a government company incorporated under the Companies Act cannot claim exemption from insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC), merely because it performs public welfare functions.
A Bench comprising Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada admitted a Section 9 petition filed by Daksh Jute LLP against Karnataka Food and Civil Supplies Corporation Limited, initiating the Corporate Insolvency Resolution Process (CIRP) over an operational debt of approximately Rs. 19.25 crore. The Tribunal observed:
“While statutory bodies may be immune from insolvency proceedings, the…