In Brief
Dhanlaxmi Bank sought insolvency proceedings against Emerald Mineral Exim Pvt. Ltd. for a loan of ₹1.50 crores. The loan was disbursed directly to a Builder under a quadripartite agreement with specific construction and property delivery obligations. After default, the Bank initiated recovery proceedings before the Debt Recovery Tribunal and filed an insolvency petition. The Supreme Court dismissed the Bank's appeal, holding that the transaction involved complex contractual obligations with the Builder rather than straightforward financial debt. Since the dispute was predominantly contractual and already pending in the appropriate forum (DRT), the Court ruled that using the insolvency code would impermissibly convert it into a coercive recovery tool.
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