NCLAT rejects plea for Inox Wind's insolvency proceedings

NCLAT on Inox Wind insolvency: The National Company Law Appellate Tribunal (NCLAT) has dismissed an operational creditor's request to initiate insolvency proceedings against Inox Wind. A three-member bench of the insolvency appellate tribunal has upheld the rulings of the Chandigarh Bench of the National Company Law Tribunal (NCLT), which, on May 22, 2023, rejected the plea filed by GRI Towers India.

In its dismissal, NCLAT said that the Insolvency & Bankruptcy Code (IBC) is not designed for the recovery of contractual dues.

The bench clarified that the facts of this case reveal that the operational creditor's actions are geared towards the recovery of contractual dues arising from an agreement between the parties. The NCLAT pointed out that the appellant had already filed a suit for the recovery of dues, which was later withdrawn.

Background

GRI Towers India, engaged in trade and services related to equipment and manpower provision, had brought its case to the NCLT, alleging a default of Rs 1.7 crore, including interest for delayed payments. The NCLT rejected this claim, citing limitations and the absence of a documented agreement for interest. Additionally, the claim did not meet the threshold of Rs one crore for filing such a petition.

Following the NCLT's decision, the operational creditor took the matter to the NCLAT, which subsequently dismissed the plea last week.

The NCLAT bench, chaired by Justice Ashok Bhushan, stated, "We are also satisfied that the present was a case filed by the Operational Creditor only for recovery of its contractual dues with regard to default committed as per the case of the Appellant on April 30, 2015, for stage 1 and October 23, 2018, for stage 2. The Adjudicating Authority (NCLT) did not commit any error in rejecting the Section 9 application as barred by time. We do not find any merit in this Appeal. The Appeal is dismissed."

(With PTI inputs)