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2026 Supreme(Online)(NCLT) 136
NATIONAL COMPANY LAW TRIBUNAL
Brajendra Mani Tripathi, Judicial Member, Man Mohan Gupta, Technical Member
Shashwat Enterprises – Appellant
Versus
Labhanshi Agritech Private Limited – Respondent
CP(IB)/58(MP)2025
For the Appellants/Petitioners: Jatin Sehgal
For the Respondents: Rohit Dubey
Under Section 7 IBC, adjudicating authority verifies default from creditor's records; Form D not mandatory if proven otherwise; sole proprietorship petitions valid; unsubstantiated solvency claims do not bar CIRP admission.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Company Petition filed by sole proprietorship firm as financial creditor against corporate debtor for default in repayment of unsecured loan - Objections regarding improper affidavit stamping, lack of separate legal identity of sole proprietorship, absence of Form D from information utility, and corporate debtor's solvency rejected - Debt and default of Rs.2,78,07,500/- established through loan agreement, bank statements, demand notices, and NeSL Form-C - Form D not mandatory as default proven by other records - Sole proprietorship and proprietor legally identical - Solvency claim unsubstantiated without financial evidence - Corporate Insolvency Resolution Process initiated; moratorium declared; insolvency professional appointed as IRP. (Paras 16-35)
(B) NCLT Rules, 2016 - Rule 34(4) - Affidavit in Form NCLT-6 sufficiently stamped and notarized - Vague claims of deficiency under state stamp laws rejected for lack of evidence.
(C) IBBI (Information Utilities) Regulations, 2017 - Regulation 20(1A) - Record of Default (Form D) directory, not mandatory; default verifiable through alternative reliable documents.
Facts of the case:
Financial creditor disbursed unsecured loan of Rs.2.27 crore in tranches pursuant to loan agreement requiring repayment by specified date with interest. Corporate debtor defaulted, despite multiple demands and acknowledgments of liability. Petition filed under Section 7 post-demand notice. Corporate debtor contested on procedural grounds, proprietorship status, missing Form D, and claimed solvency citing judicial precedent.
Findings of Court:
Debt and default duly established exceeding threshold under Section 4(1). All procedural objections untenable. Petition complete; proposed IRP eligible. CIRP initiated from order date.
Issues: Maintainability of petition by sole proprietorship; validity of affidavit; mandatory nature of Form D; relevance of corporate debtor's solvency and financial health in admission.
Ratio Decidendi: Adjudicating authority's role under Section 7 limited to verifying default from records or evidence furnished by financial creditor; disputed debt admissible if due and payable. Solvency requires concrete proof; unsubstantiated assertions insufficient to bar admission. (Paras 34-35)
Result: Petition admitted; CIRP initiated; moratorium imposed; specified insolvency professional appointed as IRP.
| Table of Content |
|---|
| 1. financial creditor proves debt and default via loan documents. (Para 1 , 2 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14) |
| 2. respondent challenges petition on procedural defects and locus. (Para 15 , 16 , 17 , 18 , 19) |
| 3. corporate debtor claims solvency, cites vidarbha judgment. (Para 20 , 21) |
| 4. tribunal verifies debt, default; rejects defenses; admits petition. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35) |
| 5. cirp initiated; irp appointed; moratorium declared. (Para 36) |
ORDER
1. This Company Petition has been filed by M/S SHASHWAT ENTERPRISES (“Financial Creditor”), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against LABHANSHI AGRITECH PRIVATE LIMITED (“Corporate Debtor”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for having committed a default in payment of its financial debts amounting Rs. 2,78,07,500/- (Rupees Two crore Seventy Eight Lakh Seven Thousand Five Hundred only) as on 31.03.2025. (being the due date as per the Loan Agreement dated 04.12.2024)
2. Perusal of Part-I of the Form-1 indicates that the Financial Creditor is Shashwat Enterprises Through its Sole Proprietor Pushpendra Jain, having its registered office at 68, Agar Road, Chimanganj Mandi, Ujjain, Madhya Pradesh - 4560 06, 3. Perusal of Part-II of the Form-1 indicates that the Corporate Debtor is one Labhanshi Agritech Private Limited , CIN: U15100MP2021PTC057591, having its registered office at, 410- Apollo Tower 2 M.G. Road, Indore, M.Р. - 452 001.
4. Perusal of Part-III of the Form-1 indicates that the applicant has nominated Navin Khandelwal , as Insolvency Professional, having Registration No. IBBI/IPA-001/IPP00703/2017-2018-11301, E-mail: navink25@yahoo.com to act as Interim Resolution Professional (“IRP”). The proposed IRP has given written communication as per the requirement of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,2016 (Annexure-A14). That the proposed interim resolution professional has a vaild AFA, having AFA certificate no. AA1/11301/02/311225/107818, and is valid upto 31-12-25, however as per IBBI website it is observed that the AFA is valid upto 31st December 2026.
5. Perusal of Part-IV of the Form-1 reveals that the total amount in default is claimed to be Rs.2,78,07,500/- .
6. It is stated that the respondent had approached the Applicant in the month of November, 2024 requesting for a short term unsecured loan up-to Rs.2,50,00,000/- (Rupees Two Crore Fifty Lakh only), to meet its urgent working capital and other financial requirements. A Loan Agreement dated 04.12.2024 was executed among the parties as per the terms of the agreement, the loan amount was to be disbursed by the Applicant on or before 31.12.2024 to the Respondent, who in turn agreed to repay the said amount till 31.03.2025 along-with interest calculated @1.5% per month. It was further agreed that, in case the Respondent fails to repay the amount on due date it shall pay an additional penal interest calculated @ 3% per month over and above the normal interest till the actual date of payment.
7. The corporate Debtor has disbursed the loan amount to the tune of Rs.2,27,00,000/- (Rupees Two Crore Twenty Seven Lakh Eighty Thousand only) in various tranches via banking channel which were duly received by the Respondent. It has disbursed the loan amount in the following tranches through banking channel:
8. On 31.03.2025, the Corporate Debtor defaulted in repaying the outstanding principal along with accrued interest under the Loan Agreement, following which the Financial Creditor repeatedly demanded payment through letters dated 14.04.2025, 10.05.2025 and a Demand Letter dated 26.05.2025, while the Corporate Debtor, despite giving successive verbal assurances and specific timelines for payment in April and May 2025, failed to honour its commitments
