The court affirmed that financial creditors can initiate CIRP under Section 7 based on valid acknowledgments of default, and clarified that authorizations remain valid post-amalgamation of banks.

ORDER

Order delivered on:_30.01.2026 CP(IB) No. 53 of 2024

1. This Company Petition has been filed byPunjab National Bank (“Financial Creditor”) seeking initiation of theCorporate Insolvency Resolution Process (“CIRP”) againstM/s Ishape Appliances 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, on account of default in repayment of its outstanding financial debt amounting to₹17,13,16,221.85/ - as on 03.02.2024, together with applicable interest and penal charges. The date of default is stated to be 30.11.2020

2. The Financial Creditor is a Bank/Financial Institution. The Head Office of the Financial Creditor is situated at Plot No. 4, Sector–10, Dwarka, New Delhi – 110075.The present petition has been filed through its Chief Manager, Shri Dilip H. Patidar, who has been duly authorised by a Power of Attorney dated 27.12.2011 (Annexure A-3).

3. The Corporate Debtor is M/s Ishape Appliances Private Limited having CIN U74999MP2017PTC043877. The registered office of the Corporate Debtor is situated at 203, Western Business Centre, 1/6, New Palasia, Indore (M.P.) – 452001, which falls within the territorial jurisdiction of this Tribunal.

4. The Applicant has proposed Shri Prabhat Jain, Insolvency Professional, bearing Registration No. IBBI/IPA-001IPP-02233/2020–2021/13480, to act as the Interim Resolution Professional (“IRP”)

5. The Authorisation for Assignment of the proposed IRP is valid up to 30.06.2026, as per the records of the Insolvency and Bankruptcy Board of India. The proposed IRP has furnished his written communication in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (Annexure A-2). The factual matrix of the case is that the Corporate Debtor is a company incorporated under the provisions of the Companies Act, 2013 and is engaged in the business of manufacturing and trading of steel furniture and precision cooling machines, having its registered office within the territorial jurisdiction of this Tribunal.

6. In the year 2017, the Corporate Debtor approached the Financial Creditor by submitting a loan application dated 27.11.2017, seeking financial assistance. Pursuant thereto, the Financial Creditor sanctioned the following credit facilities vide Sanction Letter dated 22.01.2018  Term Loan – ₹1,100 Lakhs  Cash Credit (Hypothecation) – ₹300 Lakhs

7. The total amount sanctioned and disbursed aggregated to ₹14,82,20,000/- which also included Funded Interest Term Loan (FITL) of ₹84.20 Lakhs. The Corporate Debtor, along with its promoters and guarantors, executed various loan and security documents, including inter alia: an Agreements of Guarantee (Annexure A-6), Hypothecation of plant and machinery, raw materials, semi-finished goods, finished goods, goods in transit and book debts (Annexures A-6 and A-7). Debtor–Creditor Agreements executed in favour of the Financial Creditor (Annexure A-6); Mortgage by deposit of title deeds created by the guarantors in favour of the Financial Creditor (Annexures A-8 to A-11).

8. The Corporate Debtor and guarantors deposited original title deeds of various immovable properties with the intention to create mortgage, including diverted lands and constructions situated at Village Kalukhedi, Tehsil and District Dewas (M.P.), and other properties as detailed in Part–IV of the petition. The mortgage entries w