The Kochi bench of the National Company Law Tribunal (NCLT) has dismissed an insolvency petition against a Kerala-based auto dealer, ruling that the Insolvency and Bankruptcy Code (IBC) cannot be used as a mechanism to recover private debts.
The petition was filed by eight financial creditors against NCS Autocars Pvt Ltd in Pathanamthitta district, who claimed that the company had defaulted on loans worth ₹4 crore advanced in two tranches in September and December 2023.
After part repayments, they claimed outstanding dues of ₹3.82 crore, including ₹2.55 crore in principal and ₹1.27 crore in interest.
However, the tribunal said the case appeared to be “a debt recovery action rather than a bona fide invocation of the insolvency…