The Mumbai Bench of National Company Law Tribunal (NCLT) held that the Insolvency and Bankruptcy Code does not apply to Co-Operative Society as it is not a ‘Corporate Person’.
The Financial Creditor submitted that the Corporate Debtor approached the Financial Creditor seeking total loan facilities for an amount for the purpose of setting up a plant for production of sugar, cutting of sugarcane, transport advance, machinery repair, pre – seasonal purchase & other expenses.
The Financial Creditor sanctioned and disbursed the credit facilities from time to time over the period from 2006 to 2011. Out of the above, an amount of Rs. 1336.26 lakhs towards Restructured Loan was disbursed as a member consortium of banks and the balance on standalone basis.
The coram of Technical Member, Rajesh Sharma and Judicial Member H.V.Subba Rao while considering the contentions of the Financial Creditor with respect to the Limitation Period, observed that even if the Petition filed by the Financial Creditor is within the limitation, the Financial Creditor is not eligible to file a petition under the IBC against the Corporate Debtor here, being a Co-operative Society registered under the Maharashtra State Co-operative Societies Act, 1960. The remedy to the Financial Creditor can be available under any other applicable Legislation.
“In view of the above, this Bench is of the opinion that, the Petition filed by the Financial Creditor is not maintainable and therefore, C.P. (IB) No. 263/MB/2019 filed by The Solapur Dist. Central Co – Operative Bank Limited, the Financial Creditor/Applicant, under section 7 of Insolvency & Bankruptcy Code, 2016 (I&B Code) against Sangola Taluka Sahakari Sakhar Karkhana Limited, Corporate Debtor, for initiating Corporate Insolvency Resolution Process is hereby Dismissed with no Cost,” the NCLT said.
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