The National Company Law Tribunal (NCLT) at Kochi bench has ruled that a borrower cannot use a dispute between consortium lenders over restructuring to block insolvency proceedings. This is so when the financial debt and default are otherwise established.
“The Corporate Debtor cannot be permitted to take advantage of an inter se dispute between the Financial Creditors so as to delay or defeat the insolvency proceedings,” Judicial Member Vinay Goel and Technical Member Ravichandran Ramasamy observed.
The ruling came while admitting Indian Bank’s insolvency petition against AKS Cold Storage Limited over a default of ₹40.48 crore.
AKS operates cold storage facilities in Tamil Nadu and Kerala. Indian Bank’s lending relationship with…