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

economictimes.indiatimes.com:

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: «Time and again, the apex court in a catena of judgments held that the IBC is not a 'recovery mechanism'.
The appellate tribunal upheld the order by the Bengaluru bench of the National Company Law Tribunal (NCLT), which had dismissed the plea moved by an operational creditor claiming a default of Rs 8.46 crore against United Telecoms Ltd, which is an ICT and social infrastructure company.
According to the petitioner, it had entered into a settlement agreement with the company on its request and had signed an MoU (memorandum of understanding).