IBC not applicable on Co-Operative Society as it is not a Corporate Person: NCLT

The Insolvency and Bankruptcy Code (IBC) does not apply to the Co-Operative Society since it is not a “Corporate Person,” according to the Mumbai Bench of the National Company Law Tribunal (NCLT).

The Corporate Debtor approached the Financial Creditor requesting total credit facilities for an amount for the purpose of setting up a sugar plant, cutting sugarcane, transport advance, machinery repair, pre-season purchase, and other expenses, according to the Financial Creditor.

From 2006 until 2011, the Financial Creditor sanctioned and disbursed credit facilities on a regular basis. A total of Rs. 1336.26 lakhs was disbursed as a member consortium of banks for the Restructured Loan, with the remainder on a stand-alone basis.

While considering the Financial Creditor’s contentions regarding the Limitation Period, the coram of Technical Member Rajesh Sharma and Judicial Member H.V.Subba Rao 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, as the Corporate Debtor is a Co-operative Society registered under the Maharashtra State Co-operative Societies Act, Any other applicable legislation may provide a remedy for the Financial Creditor.

“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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