NEW DELHI: The NCLT has dismissed an insolvency plea of Morgan Securities and Credits Pvt Ltd (MSCPL) against BPL, saying that the claim for default of Rs 1,323.70 crore was barred by the limitation period and amounted to misuse of Insolvency and Bankruptcy Code as a debt-recovery tool.
The Kochi bench of the tribunal held the petition to be an attempt to use IBC as a recovery mechanism after already pursuing arbitration, appellate remedies, and execution.
“Considering the facts and circumstances of the present case, this Adjudicating Authority (NCLT) is of the view that the present proceedings are essentially an attempt to recover the balance amount claimed under the Award after having pursued arbitration, appellate proceedings and execution remedies for several years.
Such use of the insolvency process is not in consonance with the object and scheme of the Code,” said NCLT in a July 7 order.
The NCLT’s decision came over a Section 7 application filed by MSCPL.
It had sought initiation of Corporate Insolvency Resolution Process (CIRP) against consumer electronics and healthcare equipment maker BPL over an alleged financial debt of Rs 1,323.70 crore arising from bill discounting transactions dating back to 2002-03.
Morgan Securities had contended that BPL defaulted on repayment obligations under bill discounting facilities extended in 2002 and 2003 and that the liability stood crystallised through an arbitral award passed in December 2016, which was subsequently upheld by the Supreme Court in December 2025.