New Delhi, April 24 -- In a judgment on Thursday, the Supreme Court held that the Insolvency and Bankruptcy Code 2016 (IBC) cannot be used as a substitute for executing money decrees or as a coercive recovery tool.
The Court set aside an order of the National Company Law Appellate Tribunal (NCLAT) that had admitted an insolvency plea based on a money decree, and restored the National Company Law Tribunal (NCLT) decision dismissing the petition.
Dispute and Proceedings
The case arose from a loan dispute that led to a civil court decree in favour of the lender. Instead of pursuing execution through civil courts, the lender initiated insolvency proceedings under Section 7 of the IBC.
The NCLT rejected the plea, citing misuse of the IBC...