NCLT Kolkata Dismisses UCO Bank's ₹846 Crore Insolvency Plea Against Nicco Uco Alliance

The National Company Law Tribunal (NCLT) at Kolkata has dismissed an insolvency petition filed by UCO Bank against Nicco Uco Alliance Credit Ltd., a listed financial services company over an alleged default of Rs 846 crore. It held that the plea was barred by limitation and could not be entertained.

The tribunal found that the bank approached the insolvency forum far too late. It noted a gap of nearly nine years between the original default and the first acknowledgment of debt. This delay, the tribunal said held was fatal to its admission.

A bench of Judicial Member Bidisha Banerjee and Technical Member Siddharth Mishra passed the order on December 18, 2025. It recorded that the default took place in 2004. The first One-Time Settlement proposal came only in 2013. The bank offered no explanation to bridge this gap within the three-year limitation period.

UCO Bank had extended working capital facilities to Nicco Uco in 2001 under a consortium arrangement. The company later faced financial difficulties. Its loan account turned non-performing in 2004. The Reserve Bank of India imposed restrictions that year.

The bank and other lenders moved the Debts Recovery Tribunal in 2005. At that stage, the claim was about Rs 119 crore. When the insolvency petition was filed in March 2025, the claimed dues had risen to Rs 846 crore.

The bank relied on several settlement proposals made between 2013 and 2024. It argued that these proposals amounted to repeated acknowledgments of debt. On that basis, it claimed the petition was within time.

The tribunal rejected this argument. It said acknowledgments can extend limitation only if made within the original limitation period. Once the period expires, later proposals cannot revive the claim. This is unless they result in a legally enforceable contract.

In this case, the bank had rejected the settlement proposals. There was no binding promise to pay a time-barred debt. The tribunal held that rejected offers cannot revive a stale claim.

The bench stressed that insolvency law is not a recovery tool for old dues. It cannot be used to resurrect time-barred claims. On these grounds, the petition was dismissed.