The Guwahati National Company Law Tribunal (NCLT) has held that a dispute over the invocation and appropriation of pledged securities cannot defeat an insolvency petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, once the existence of financial debt and default is established.
A Bench of Judicial Member Rammurti Kushawaha and Technical Member Yogendra Kumar Singh made the observation while admitting an insolvency petition filed by IL&FS Financial Services Limited against Adhunik Meghalaya Steels Private Limited. It held:
“We are, therefore, of the considered opinion that the objections raised by the Corporate Debtor regarding the invocation of 2,52,17,391 pledged shares, the recoveries of Rs. 8,30,61,278/-, the…