| Subject | Insolvency and Bankruptcy Code, 2016 |
| Case | Jumbo the Solapur Dist. Central Co – Operative Bank Limited vs Sangola Taluka Sahakari Sakhar Karkhana Limited |
| Tribunal | NCLT, Mumbai |
| Spirit of the Case | Applicability of Section 7 to Co-operative Societies |
Summary :
A Cooperative Society is not a Corporate person under IBC to which the Insolvency and Bankruptcy Code applies.
Facts of the case :
- 1. The Applicant herein is a Co–Operative Bank extended loan facilities to Sangola Taluka Sahakari Sakhar Karkhana Limited (The Respondent).
2. On default of repayment of credit facilities, the Financial Creditor initiated legal action under the provisions of Maharashtra State Co-Operative Societies Act, 1960 and obtained recovery certificate under section 98 of the Act.
3. The Respondent appealed against this order before the Maharashtra State Co-Operative Appellate Court which set aside the order of the lower court on the condition that amount would be deposited within a period of 2 months time from the date of respective order.
4. However, the respondent fails to deposit the said amount within stipulated period.
5. The Respondent has filed a Special Leave Petition (SLP) with Hon’ble Supreme Court against the legal actions initiated under SARFAESI Act, 2002 by the Applicant.
6. The Present Application has been filed by the Applicant in the capacity of Financial creditor for initiation of CIRP against Respondent.
Conclusion :
It was observed by the Hon’ble tribunal that the Respondent against which the CIRP is sought to be initiated is a Co operative Society registered under Maharashtra Cooperative Societies Act, 1960 and therefore CIRP cannot be initiated against the Respondent.