Legal Victory for PepsiCo India

In a significant legal development, the National Company Law Appellate Tribunal (NCLAT) has dismissed an insolvency petition against PepsiCo India Holdings. The tribunal emphasized that the Insolvency & Bankruptcy Code (IBC) should not be used as a tool for debt recovery, especially when the principal amount has been settled and only disputed interest claims remain.

Background of the Case

The appeal was filed by SNJ Synthetics, an operational creditor, under Section 9 of the IBC. The Chandigarh bench of the National Company Law Tribunal (NCLT) had previously rejected SNJ's plea, a decision that has now been upheld by the NCLAT. The appellate tribunal highlighted the lack of substantiation for the interest component claimed by SNJ.

Implications of the Ruling

This ruling reinforces the principle that the IBC is designed for the rejuvenation and revival of corporate debtors, not for settling disputed claims that could lead to their financial demise. The decision, dated May 7, 2025, marks a pivotal moment in the interpretation of the IBC's provisions.