Canara Bank files insolvency petition against DCHL

HYDERABAD: In a major setback for

Deccan Chronicle Holdings Ltd

(

DCHL

), public sector bank Canara Bank has filed an insolvency petition against the beleaguered city-based company before the Hyderabad bench of the

National Company Law Tribunal

(

NCLT

) by invoking the provisions of the country's newly ushered in Insolvency and Bankruptcy Code (IBC).

The Bengaluru-headquartered Canara Bank, which is struggling to recover dues amounting to 800 crore from DCHL, has urged the NCLT to declare the debt-ridden company as insolvent under the provisions of the IBC, which came into force in 2016. A company is said to be insolvent when it cannot meet its obligations or pay its debts.

Though Canara Bank first moved the NCLT with its insolvency petition on February 23, 2017, the petition was returned multiple times due to certain inadequacies in the application. The tribunal sought clarifications, which the bank furnished, and finally the matter was listed for admission on April 5, 2017.