New Delhi: The Insolvency and Bankruptcy Code (IBC) cannot be used as a substitute for debt recovery in disputes that are predominantly contractual in nature, the Supreme Court has said, reaffirming the legal position that insolvency proceedings cannot be invoked in breach of contract cases.
The court’s 7 May ruling came while dismissing an appeal filed by Kerala-headquartered Dhanlaxmi Bank against borrowers and a real estate builder in a dispute stemming from a 2011 property transaction in Kolkata.
A bench of Justices P.S. Narasimha and Alok Aradhe upheld a National Company Law Appellate Tribunal (NCLAT) ruling setting aside the initiation of corporate insolvency proceedings against Emerald Mineral Exim, holding that the dispute did…