NCLAT says IBC not a recovery mechanism; dismisses insolvency plea against United Telecoms

New Delhi: The Insolvency & Bankruptcy Code is “not a recovery mechanism”, observed the National Company Law Appellate Tribunal, while dismissing a plea against United Telecoms Ltd filed by one of its operational creditors. This is the second such observation from the Chennai bench of the insolvency appellate tribunal this month, after declining to entertain the petition from operational creditors.

Earlier, it had refused to entertain an insolvency petition against Wipro Ltd after observing that the bankruptcy law cannot be used as a means to recover debt against solvent companies.

Again, while rejecting a plea against United Telecoms last week, a two-member bench comprising justices M Venugopal and Shreesha Merla said: