New Delhi: Can a cooperative society buy or invest in a company during insolvency proceedings under the Insolvency and Bankruptcy Code (IBC)?
Yes, said the Supreme Court on Thursday—but within limits.
In a ruling that will shape the rights of cooperative societies in future insolvency proceedings, the top court ruled that Multi-State Co-operative Societies (MSCS) can bid to occupy the company under the IBC, only if their investment is in the “same line of business” as the debtor.
The case stemmed from the Corporate Insolvency Resolution Process (CIRP) of Morarji Textiles Ltd, in which a cooperative society, Nirmal Ujjwal Credit, tried to acquire the debtor in 2024.
Nirmal Ujjwal…