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2025 Supreme(Online)(NCLT) 4979
NATIONAL COMPANY LAW TRIBUNAL
SH. SUSHIL MAHADEORAO KOCHEY, SH. CHARANJEET SINGH GULATI, JJ
Progfin Private Limited – Appellant
Versus
Ganesh Benzoplast Limited – Respondent
Company Petition (IB) No. 583/2024
For the Appellants/Petitioners: Adv. Amir Arsiwala, Adv. Radha Naik i/b The Law Point
For the Respondents: Adv. Nausher Kohli, Adv. Parag Khandhar, Adv. Tapan Radhar, Adv. Pratyusha Dhodda i/b DSK Legal
The Tribunal cannot adjudicate claims involving allegations of fraud or forgery under insolvency proceedings, which must be resolved in civil courts.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Company Petition dismissed as the claims for financial debt were based on disputed and alleged fraudulent documents. The Tribunal determined it lacked jurisdiction to adjudicate issues of fraud and forgery which require detailed examination. (Paras 25, 26, 30)
(B) Jurisdiction of Tribunal - The Tribunal has limited jurisdiction under insolvency proceedings and cannot adjudicate on disputes requiring detailed evidence regarding fraud and forgery. Such matters must be addressed in civil proceedings. (Paras 25, 29)
Facts of the case:
The petition was initiated by a financial creditor, alleging non-repayment of loans by the corporate debtor, who claimed that the agreements were forged, and no debt was incurred. The debt was claimed to be Rs. 14,14,57,829.63. (Paras 1, 20)
Findings of Court:
The Tribunal found that the existence of fraud and forgery surrounding the loan agreements barred its jurisdiction to hear the petition. Detailed investigations and trials are required to resolve these disputes. (Paras 25, 30)
Issues: Whether the Tribunal has jurisdiction to adjudicate issues of fraud and forgery within insolvency proceedings? (Paras 24-30)
Ratio Decidendi: The Tribunal ruled it does not have jurisdiction to determine fraud in the context of insolvency proceedings; this must be resolved in civil or criminal courts. (Paras 25, 30)
Result: Petition dismissed.
| Table of Content |
|---|
| 1. factual background of loan agreement (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. contentions on fraud and liability (Para 10 , 11 , 12 , 19) |
| 3. details of financial transaction and default (Para 17 , 18 , 20) |
| 4. issues of forgery and jurisdiction (Para 21 , 25 , 30) |
ORDER
1. Progfin Private Limited (hereinafter referred to as “Financial Creditor”) is a Non-Banking Financial Company and a wholly – owned subsidiary of Desiderata Impact Ventures Private Limited (hereinafter referred to as the “DIVPL”). GBL Chemical Limited (hereinafter referred to as the “Corporate Debtor”) is a wholly owned subsidiary of Ganesh Benzoplast Limited (hereinafter referred to as the “Corporate Guarantor”) which is a public non-listed company engaged in the manufacturing and trading of organic and inorganic chemicals. The Financial Creditor has filed the present Petition as per Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “the Code”) against M/s. Ganesh Benzoplast Limited, who is the Corporate Guarantor of GBL Chemical Ltd.
Averments by the Petitioner/Financial Creditor
2. The Corporate Debtor approached the Financial Creditor to avail a Working Capital Credit Facility (hereinafter referred to as the “Facility”). The Corporate Debtor submitted and completed all formalities with respect to sanctioning the Facility and the Facility Agreement dated 26.10.2023 was signed and executed among the Corporate Debtor, DIVPL and Financial Creditor.
3. As per the Facility Agreement, the amount disbursed in favor of Corporate Debtor was chargeable at 17.5% p.a. and they were obliged to repay the said amount within 90 days from the date of disbursal. If the amount is not repaid within 90 days an additional interest was chargeable at 9.5% p.a. in accordance with Clause 2.6 read with Schedule – I of the Facility Agreement. It was also agreed that 15% (“Margin”) would be retained by the Financial Creditor until the time of repayment.
4. To secure the facility provided by the Financial Creditor to the Corporate Debtor, a Deed of Guarantee dated 26.10.2023 was executed by M/s. Ganesh Benzoplast Limited who is the parent company of the Corporate Debtor. Two Personal Guarantee Deeds dated 26.10.2023 were executed by Mr. Rishi Pillai (Director of Corporate Debtor) and Mr. Ramakant Pilani (erstwhile Director and CEO of Corporate Debtor). The Corporate Debtor was obligated to repay the outstanding dues to the Financial Creditor as per the terms and conditions read with Schedule – I to the Facility Agreement.
5. In respect of the Facility Agreement, the initial sanction limit of Rs. 10,00,00,000/- was subsequently increased to 15,00,00,000/- by way of an Addendum dated 30.01.2024 and was secured by way of Supplemental Deeds dated 30.01.2024 to the Corporate Guarantee Deed and Personal Guarantee Deeds, respectively.
6. The disbursements were made in Corporate Debtor’s SBI Bank Account. From time to time, the Corporate Debtor repaid the amount to the tune of Rs. 10,87,09,223/- in respect of the amounts disbursed from 27.10.2023 to 08.02.2024. The last amount was repaid on 09.02.2024. Since the outstanding dues payable by the Corporate Debtor were not received against the disbursement within the stipulated period, the Financial Creditor issued a Loan Recall/Termination Notice and Demand Notice dated 15.04.2024 along with the penal interest, late payment charges and other charges as on 15.04.2024 for repayment of dues.
7. The Financial Creditor received a response letter dated 17.04.2024, wherein the Corporate Debtor, Corporate Guarantor and Personal Guarantor denied the existence and validity of the documents executed and signed between the Financial Creditor and Corporate Debtor along with the disbursement of any amount to the Corporate Debtor and the existence of any Bank Account with SBI.
8. The Directors of the Corporate Debtor were the Authorized Signatories of the Corporate Debtor who executed and signed the Facility Agreement and requisite
