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Sudarshan Aithal Suspended Director of Distribution Logistics Infrastructure Pvt. Ltd.-vs-Bank of India & Ors.-2026-juristway.com-3318-NCLAT(New Delhi)-IBC
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2026-juristway.com-3318-NCLAT(New Delhi)-IBCSudarshan Aithal Suspended Director of Distribution Logistics Infrastructure Pvt. Ltd. v Bank of India
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2026-juristway.com-3318-NCLAT(New Delhi)-IBC

Sudarshan Aithal Suspended Director of Distribution Logistics Infrastructure Pvt. Ltd.

versus

Bank of India & Ors.

Court - Bench
National Company Law Appellate Tribunal - New Delhi
Date of Judgment
06 November 2026
Judges
Hon'ble Justice Mohd. Faiz Alam Khan, Member (Judicial)
Case Number
Comp. App. (AT) (Ins) No. 1056 of 2026 & I. A. No. 4161, 4162 of 2026
Advocate (Petitioner)
Mr. Kunal Tandon - Sr. Adv. with Mr. Sinha Shrey Nikhilesh, Mr. Parth Davar, Mr. Kaustubh Khanna, Mr. Swastik Verma & Ms. Faraaz Khan - Advocates
Advocate (Respondent)
Mr. Ricky Sampat - Advocate for R-1; Mr. K. Datta Sr. Adv. with Mr. Angad Baxi, Ms. Ratema Kachwalla, Ms. Aparna Singh, Mr. Harsh Gurbani & Ms. Alina Mathew, Advocates
Quick ref
Takeaway

Debt of about Rs. 621 crores assigned to ARC | CIRP admission upheld | Suspended director's appeal dismissed Unhonoured OTS Offers Cannot Defeat Section 7 Admission Once financial debt and default are established, admission under Section 7 follows; a one-time settlement offer that the corporate debtor never funded cannot stall it. After admission, settlement can end the CIRP only through the amended Section 12A route, not through offers made in an appeal under Section 61.

Digest & Analysis
Litigation Digest

In Sudarshan Aithal v. Bank of India, 2026-juristway.com-3318-NCLAT(New Delhi)-IBC, where the suspended director did not dispute debt or default but challenged CIRP admission on the grounds of a pending OTS, the minority share (about 9.4%) of the applicant bank and the assignment of the debt to an ARC for Rs. 621 crores, the Hon'ble National Company Law Appellate Tribunal, New Delhi held that the Adjudicating Authority rightly admitted the Section 7 application (paras 30–31, 39). Applying Innoventive Industries and M. Suresh Kumar Reddy, the Hon'ble Tribunal held that Vidarbha Industries turned on its own facts and that admission follows once default is shown (paras 32–33). The OTS lapsed because the 10% upfront deposit of Rs. 59 crores was never paid, and the later offer of Rs. 631 crores in two instalments, recorded by the Hon'ble Tribunal itself on 29.06.2026, was also not honoured (paras 34–37). Under the amended Section 12A, withdrawal now requires the prescribed procedure, and lenders cannot be compelled to accept an OTS (para 38). The appeal was dismissed.

✎ Editor's Note

Practice point: A promoter seeking to avert CIRP through settlement must fund the upfront component before the Section 7 petition is decided. Offers made in an appeal carry no weight if deposits recorded in the Tribunal's own order are missed; repeated non-performance was treated as a ground in itself (para 37).

Risk: The Hon'ble Tribunal relied on the amended Section 12A (effective 26.05.2026, as submitted) and the three-member Bench ruling in Ayush Prashant Aggarwal. Withdrawal after admission now runs only through the resolution professional with CoC approval, so settlement strategy must be built around that procedure.

Open question: The challenge to the assignment in favour of the ARC, pending before the Hon'ble Bombay High Court, was left untouched; its outcome does not affect admission.

Disclaimer: This content reflects the editor's personal views and should not be treated as a legal opinion or professional advice.

Full Text
Judgment & Order
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