NCLAT rejects bankruptcy proceedings against Wipro
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A two-member Chennai bench of the appellate tribunal had earlier said that there was a pre-existing dispute between Wipro and the petitioner regarding the payment. He observed that the Insolvency and Bankruptcy Code (IBC) is not designed to be ‘a mere recovery law for creditors’.
The National Company Law Appellate Tribunal (NCLAT) has rejected an operational lender’s plea to initiate insolvency proceedings against Wipro Ltd. A two-member Chennai bench of the appellate tribunal had earlier said that there was a pre-existing dispute between Wipro and the petitioner regarding the payment. He observed that the Insolvency and Bankruptcy Code (IBC) is not designed to be ‘a mere recovery law for creditors’.
NCLAT has upheld the order of the National Company Law Tribunal (NCLT). The Bengaluru bench of NCLT had on January 16, 2020, dismissed the plea of operational lender Tricholite Electrical Industries. This order was challenged before the appellate body NCLAT by the Delhi-based operational lender ‘LT/HT Electric Panels’ manufacturer.
However, the NCLAT rejected it, observing, “We are satisfied that the withholding of three per cent of the total invoice amount by the respondent company (Wipro) was indeed a ‘dispute’.” Under the IBC, insolvency proceedings against any corporate debtor are generally initiated only in categorical cases where there is no genuine dispute between the parties regarding the outstanding debt.
Disclaimer: IndiaTheNews has not edited this news. This news has been published from PTI-language feed.
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