NCLT Kolkata Imposes ₹1 Lakh Penalty On Indian Bank For Misguided Insolvency Petition Against Personal Guarantor Already Undergoing Insolvency

The National Company Law Tribunal (NCLT) in Kolkata imposed a penalty on Indian Bank for filing a misguided insolvency petition against a personal guarantor. The Tribunal found that the petition was improperly filed and lacked substantive grounds, as it failed to meet the criteria established under the Insolvency and Bankruptcy Code (IBC). The NCLT criticized the bank for pursuing the petition in bad faith and for not verifying the merits of the case adequately before approaching the Tribunal. As a result, the bank was ordered to pay a penalty, emphasizing the need for financial institutions to ensure the accuracy and validity of their insolvency claims to avoid unnecessary litigation and penalties.