Trinity Auto Components Limited Vs Axis Bank Limited (NCLAT Delhi)
The appeal before the National Company Law Appellate Tribunal (NCLAT) was filed by Trinity Auto Components Limited under Section 60(5) read with Section 31(1) of the Insolvency and Bankruptcy Code (IBC), 2016, challenging the order dated 26.06.2024 of the National Company Law Tribunal (NCLT), Mumbai Bench. The NCLT had partly allowed the company’s application (IA No. 2585 of 2019), leading to the present appeal.
The appellant company was engaged in manufacturing forged parts for engines and chassis of heavy commercial vehicles. It had earlier been taken over for rehabilitation by Tarini Steels Ltd. under a scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) on 07.11.2014, under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The Delhi High Court later modified the scheme through orders dated 15.05.2015 and 27.05.2015. Under this BIFR scheme, unsecured creditors could either accept 15% of the principal amount or wait for full recovery after the scheme’s completion. The appellant claimed that Axis Bank Limited violated the scheme by charging higher interest rates (14.75%–16%) instead of 12%, and although the excess was once refunded in 2017, the bank resumed higher interest charging after SICA’s repeal on 01.12.2016.
