Authority: National Company Law Appellate Tribunal, Principal Bench, New Delhi
Order Date: 06.11.2026
Case Overview
The appeal was filed by Sudarshan Aithal, Suspended Director of Distribution Logistics Infrastructure Pvt. Ltd. (CD), against the order dated 14.05.2026 passed by the National Company Law Tribunal, Mumbai Bench – VI in Company Petition (IB) No. 1078 of 2025. The NCLT had initiated Corporate Insolvency Resolution Process (CIRP) against the corporate debtor on an application filed by Bank of India under Section 7 of the Insolvency and Bankruptcy Code, 2016.
The financial debt history shows that Bank of India had sanctioned a term loan of Rs. 57.50 Crore to Vikram Logistics Limited (which later changed its name to Distribution Logistics Infrastructure Private Limited) for its container trains project vide sanction reference dated 21.01.2013. The loan was restructured multiple times: in 2014 with an additional term loan of Rs. 4.89 crores, in 2016 with revised credit limits of Rs. 68.84 crores, and in 2021 through a consortium arrangement led by Bank of Baroda. The credit facilities were renewed vide sanction letter dated 22.06.2021 with a master restructuring agreement executed on 26.06.2021.
The default occurred on 29.12.2022, and the financial creditor classified the cash credit account as NPA on 28.03.2023. A demand notice was issued under Section 13(2) of the SARFAESI Act on 23.12.2024 without positive response from the CD.
During appellate proceedings, the loan was assigned by the consortium lenders to JM Financial Asset Reconstruction Company Limited for Rs. 621 crores through an assignment agreement dated June 30th, 2026. JM Financial ARC was subsequently arrayed as Respondent No. 3.
The appellant contended that Bank of India was a minority lender with approximately 9.4% share and challenged the debt assignment before the Bombay High Court. The appellant also argued that various One-Time Settlement (OTS) offers ranging from Rs. 580-631 crores were made and allegedly accepted, but the lenders wrongfully rejected them.
The respondent lenders demonstrated that the OTS offer of Rs. 590 crores (accepted as base price for Swiss challenge) required an upfront deposit of Rs. 59 crores by 07.10.2025, which was never deposited. The OTS was formally rejected on 16.04.2026 due to non-deposit. Even during appellate proceedings, the appellant failed to deposit amounts as directed by NCLAT on 29.06.2026 (50% of Rs. 631 crores by 09.07.2026 and balance by 20.07.2026).
The tribunal examined legal precedents including Innoventive Industries Limited Vs. ICICI Bank, M. Suresh Kumar Reddy Vs. Canara Bank, and noted that the adjudicating authority's role under Section 7 is limited to verifying existence of debt and default. The debt and default were not disputed by the appellant.
Final Outcome
The NCLAT dismissed the appeal, upholding the NCLT's order initiating CIRP against Distribution Logistics Infrastructure Pvt. Ltd. The tribunal found no merit in the appellant's arguments regarding OTS rejection and minority lender status, noting the appellant's repeated defaults in honoring settlement commitments. The court emphasized that commercial wisdom of lenders in rejecting OTS offers is non-justiciable, and the amended Section 12A of IBC makes withdrawal of admitted applications more stringent after constitution of CoC.
Topics: Corporate Insolvency, Debt Resolution, Banking Litigation