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Episode 53 - Violation of S. 186 of Companies Act, 2013 leads to dismissal of CIRP Application
The Hon'ble NCLT, Principal Bench in the matter of UKG Steel Private Limited Vs. M/s. Erotic Buildcon Private Limited held that loan advanced by Financial Creditor in violation of Section 186 of Companies Act, 2013 leads to a debt which cannot be legally enforceable and thereby dismissed the CIRP Application filed under Section 7 of IBC, 2016.
Mr Yashraj Singh summarised the order and its rationale and leaves us with a food for thought as to whether this order is a wakeup call for companies who are advancing loans by violating section 186 of Companies Act 2013.
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By VListenThe Hon'ble NCLT, Principal Bench in the matter of UKG Steel Private Limited Vs. M/s. Erotic Buildcon Private Limited held that loan advanced by Financial Creditor in violation of Section 186 of Companies Act, 2013 leads to a debt which cannot be legally enforceable and thereby dismissed the CIRP Application filed under Section 7 of IBC, 2016.
Mr Yashraj Singh summarised the order and its rationale and leaves us with a food for thought as to whether this order is a wakeup call for companies who are advancing loans by violating section 186 of Companies Act 2013.