The National Company Law Tribunal (NCLT), Mumbai bench comprising Ms. Reeta Kohli, Member (Judicial) and Ms. Madhu Sinha, Hon’ble Member (Technical) has held that the conduct of the Financial Creditor in accepting substantial ‘one-time settlement’ (OTS) payments while simultaneously pursuing Corporate Insolvency Resolution Process (“CIRP”) proceedings represents an attempt to use the Insolvency and Bankruptcy Code, 2016 (“Code”) as a ‘recovery mechanism’, which goes against the very spirit and purpose of the Code. The Tribunal reiterated that the IBC is not intended to be used as a mechanism for debt recovery but rather as a process for resolution of the Corporate Debtor.
Background Facts
IFCI Limited…
