Once financial debt and default under Section 7 IBC is established, admission is mandatory; Adjudicating Authority has no discretion to consider viability. Vidarbha ratio fact-specific, not precedent. No interference in advanced CIRP with CoC-approved plan.

J U D G E M E N T

( 27.02.2026)

NARESH SALECHA, MEMBER (TECHNICAL)

1. The present appeal has been filed by the Appellant i.e., Uday J. Desai, who is the ex-director of Frost International Ltd. (“Corporate Debtor”), under Section 61 of the Insolvency and Bankruptcy Code, 2016 (‘Code’) against the Order dated 09.02.2023 ("Impugned Order") passed by the National Company Law Tribunal, Mumbai Bench ("Adjudicating Authority") in Company Petition (IB) No. 973/MB/2020.

Bank of India, who is the Financial Creditor of the Corporate Debtor, is the Respondent No.1 herein.

Frost International Ltd., who is the Corporate Debtor, is Respondent No. 2, herein, represented by Mr. Amit Chandrakant Shah, Resolution Professional of the Corporate Debtor.

2. The Appellant submitted that Corporate Debtor is a company incorporated in the year 1995 and has been engaged in the business of trading commodities for more than two decades. Its primary activity is Merchanting Trade. It is a government-certified 3-star rated Export and Trading House dealing in a wide range of commodities including agricultural products, electronic and computer items, minerals and metals. The Appellant further submitted that the Merchanting Trade operations of the Corporate Debtor were regularly scrutinised and audited by the consortium of 14 banks – Bank of India, Punjab National Bank, Allahabad Bank, Indian Overseas Bank, Bank of Baroda, UCO Bank, Central Bank of India, United Bank of India, Oriental Bank of Commerce, Canara Bank, BOB (erstwhile Vijaya Bank), Syndicate Bank, Andhra Bank and Union Bank of India – as well as by the Reserve Bank of India. The Appellant stated that all audits found the operations to be completely in order.

3. The Appellant submitted that the Financial Creditor, Bank of India (the Respondent No. 1) had extended various credit facilities of Rs. 756.75 Crores to the Corporate Debtor under sanction letters dated 25.08.2015, 07.12.2016 and 05.09.2017.

4. The Appellant submitted that on 08.02.2018, a consortium meeting was held in which all lender banks, including the Respondent No. 1, expressly confirmed that the Corporate Debtor’s account was in the standard category with no overdues and no issues of concern at their end.

5. The Appellant submitted that on 12.02.2018, the Reserve Bank of India (RBI) issued Circular No. RBI/2017-18/131 prescribing a revised framework for resolution of stressed assets. In view of the said circular, certain other proceedings against a group company and an anonymous complaint, the consortium of banks, including the Financial Creditor, abruptly froze all credit lines without prior intimation or justification. The banks also adjusted advances received from foreign buyers against their outstanding dues. It is the case of the Appellant that these actions of the Banks, completely stopped the business of the Corporate Debtor whereas even at that stage, the Corporate Debtor remained committed to repay the banks and submitted several resolution plans. The Appellant tried to impress upon that out of the total Letter of Credit (LC) devolvement of Rs. 5,988 crores, substantial amounts have already been repaid by the Corporate Debtor.

6. The Appellant submitted that the Corporate De