The National Company Law Tribunal (NCLT) has penalised corporate defaulters for attempting to misuse the moratorium provisions under the insolvency law to escape auction of assets by lenders under the Sarfaesi (The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) Act.
Dismissing the insolvency petition filed by Neeta Chemicals, NCLT’s Hyderabad bench has imposed a fine of Rs 10 lakh on the company for initiating insolvency proceedings with “malafide intention”. Similarly, NCLT’s principal bench in New Delhi had earlier imposed a similar penalty after refusing to admit the application of Unigreen Global to initiate corporate insolvency resolution process under IBC mainly on the groun…
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