Bengaluru, June 12 -- Karnataka Congress MLC Naseer Ahmed is facing a major legal and political setback after the National Company Law Tribunal (NCLT), Bengaluru Bench, declared him insolvent in a case linked to an alleged loan default of Rs 1,454 crore by Bengaluru-based Scotts Garments Limited.

The tribunal passed the order while hearing a petition filed by a consortium of lenders, including the State Bank of India, Canara Bank and IDBI Bank, under the Insolvency and Bankruptcy Code (IBC), 2016. The banks had sought legal intervention after the company allegedly failed to clear massive outstanding dues despite repeated recovery efforts.

The NCLT's decision has triggered speculation over the future of Naseer Ahmed's membership in the K...