The National Company Law Tribunal (NCLT) in Bengaluru has declared Congress MLC Naseer Ahmed bankrupt due to his involvement in the default of loans worth Rs 1,454.71 crore linked to M/s Scotts Garments Limited. This development raises doubts about Ahmed’s future as a member of the Karnataka Legislative Council, with legal experts suggesting possible disqualification proceedings under the law. The bankruptcy declaration could potentially disqualify Ahmed as an MLC under relevant legal provisions, including Section 140 of the Insolvency and Bankruptcy Code (IBC) and Article 191(1)(c) of the Indian Constitution.
The NCLT’s decision came after a petition by State Bank of India (SBI), Canara Bank, and IDBI Bank seeking bankruptcy proceedings against Naseer Ahmed, who had acted as a personal guarantor for M/s Scotts Garments Limited. The lenders claimed a default amount of Rs 1,454.71 crore, leading to the classification of the company’s loan accounts as non-performing assets (NPAs) by the banks. The tribunal, finding the petition in line with the Insolvency and Bankruptcy Code, ordered the initiation of bankruptcy proceedings against Ahmed as the personal guarantor.
The bankruptcy trustee has been appointed by the NCLT, and the case is scheduled for further proceedings on August 6, with the trustee expected to submit a report. Scotts Garments Limited, with loans from a bank consortium, faced insolvency proceedings due to its failure to repay debts, prompting actions against Ahmed. This bankruptcy declaration holds political significance, potentially impacting Ahmed’s eligibility to continue as a Legislative Council member, depending on the interpretation of legal provisions.
Congress MLC Naseer Ahmed had previously faced removal from his role as Political Secretary to the then Chief Minister Siddaramaiah following allegations of anti-party activities during the Davanagere South Assembly by-election. The Department of Personnel and Administrative Reforms officially relieved Ahmed of his duties on April 13, 2026, after he declined to step down voluntarily. The Congress party accused Ahmed and other leaders of working against the official Congress candidate during the April 9, 2026, Davanagere South bypoll.
