NCLAT New Delhi upheld insolvency admission of a logistics company, holding that a conditional one-time settlement never funded by the debtor cannot defeat a financial creditor’s petition once debt and default are proved.

The National Company Law Appellate Tribunal (NCLAT), New Delhi, has dismissed an appeal against the admission of Distribution Logistics Infrastructure Pvt. Ltd. into the corporate insolvency resolution process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016. It held that the debtor’s unperformed one-time settlement (OTS) offers, and the applicant bank’s minority share in the consortium debt, could not stand in the way once debt and default were undisputed [Sudarshan Aithal v. Bank of India & Ors., 2026-juristway.com-3318-NCLAT(New Delhi)-IBC].

The Bench of Justice Mohammad Faiz Alam Khan, Member (Judicial), and Naresh Salecha, Member (Technical), heard the appeal; the order was written by Justice Khan. Bank of India had sanctioned a term loan of ₹57.50 crore for a container trains project, later restructured more than once. Default occurred on 29 Dec 2022 and the account became a non-performing asset on 28 Mar 2023. NCLT Mumbai admitted the petition on 14 May 2026. While the appeal was pending, the lenders assigned the debt to JM Financial Asset Reconstruction Company Limited for ₹621 crore under agreements dated 30 Jun 2026.

The suspended director argued that Bank of India held only about 9.4% of the debt, that the OTS had been wrongly rejected and that his offer of ₹631 crore exceeded the assignment price. The asset reconstruction company replied that the OTS letter was expressly non-binding and conditional on a 10% upfront deposit, and that accepting or rejecting offers lay within the lenders’ commercial wisdom.

The Tribunal noted that neither debt nor default was disputed. Relying on Innoventive Industries Limited v. ICICI Bank (Civil Appeals Nos. 8337-38 of 2017) and M. Suresh Kumar Reddy v. Canara Bank (2023), it held that admission follows once default is shown. It found the appellant guilty of repeated defaults. The ₹59 crore upfront deposit under the OTS was never paid, and an undertaking recorded on 29 Jun 2026 to pay 50% of ₹631 crore by 9 Jul 2026 and the rest by 20 Jul 2026 was not honoured.

The Tribunal added that settlement or withdrawal is now possible only through the procedure in the amended Section 12A, which has been made more stringent, citing Ayush Prashant Aggarwal v. Uma Export Limited (CA (AT) Ins No. 1366 of 2026). The appeal was dismissed without costs.

2026-juristway.com-3318-NCLAT(New Delhi)-IBC