NCLAT upholds insolvency of Distribution Logistics Infrastructure on Bank of India plea
The NCLAT dismissed an appeal by a suspended director and upheld the insolvency process against Distribution Logistics Infrastructure, holding that its settlement offers were never honoured.
Key points
- The NCLAT dismissed an appeal against the insolvency admission of Distribution Logistics Infrastructure Private Limited on 6 November 2026.
- The lenders assigned the company's debt to JM Financial Asset Reconstruction Company for Rs 621 crore on 30 June 2026, the order records.
- The NCLAT held that the company's settlement offers, the last at Rs 631 crore, were not honoured; its order may be appealed to the Supreme Court.
Photo: Spamguy at English Wikipedia / Wikimedia Commons, CC BY 2.5 (cropped). Representational image.
The National Company Law Appellate Tribunal (NCLAT) on 6 November 2026 dismissed an appeal by a suspended director of Distribution Logistics Infrastructure Private Limited and upheld the start of its corporate insolvency resolution process. The tribunal held that the company had not honoured its own settlement offers to its lenders.
What Happened
According to the order, Bank of India sanctioned a Rs 57.50 crore term loan in 2013 to the company, then named Vikram Logistics Limited, for a container train project. The loans were restructured several times under a consortium of banks. The default occurred on 29 December 2022, and Bank of India classified the account as a non-performing asset on 28 March 2023. On 14 May 2026, the Mumbai Bench VI of the National Company Law Tribunal admitted Bank of India's application under Section 7 of the Insolvency and Bankruptcy Code.
The order records that the lenders, led by Bank of Baroda, accepted the company's one-time settlement offer of Rs 590 crore on the condition of a 10% upfront deposit of Rs 59 crore, which was never paid, and rejected the offer on 16 April 2026. On 30 June 2026, the lenders assigned the debt to JM Financial Asset Reconstruction Company for Rs 621 crore. During the appeal the company offered Rs 631 crore, and the NCLAT allowed it to pay half by 9 July 2026, but the tribunal found that this amount was not deposited either.
The NCLAT held that once a financial debt and a default are shown, the tribunal must admit the application, and that a lender cannot be forced to accept a settlement. It said that under Section 12A of the Code, a withdrawal from insolvency after admission must follow the procedure set out there.
What It Means
The insolvency process continues, with JM Financial Asset Reconstruction Company now holding the company's entire financial debt, according to the order. The ruling shows that a settlement offer, however large, does not stop an insolvency process unless the promised money is actually paid. The order may be appealed to the Supreme Court.
Source: NCLAT order
Sources & Citations
- NCLAT order — National Company Law Appellate Tribunal