New Delhi, May 12 -- The Supreme Court has observed that the Insolvency and Bankruptcy Code (IBC), 2016, cannot be invoked as a mechanism for recovery of dues, particularly in cases involving predominantly contractual disputes.

A bench comprising Justices Pamidighantam Sri Narasimha and Alok Aradhe was hearing an appeal filed by Dhanlaxmi Bank. The case arose from a transaction where the bank disbursed Rs 1.34 crore directly to a builder for a property purchase by a corporate debtor, rather than transferring the funds to the debtor itself.

Proceedings Across Multiple Forums

After the borrower's account was classified as a non-performing asset (NPA), the bank initiated recovery proceedings before the Debt Recovery Tribunal. It later pur...