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2026 Supreme(Online)(NCLT) 1096
NATIONAL COMPANY LAW TRIBUNAL
Umesh Kumar Shukla, Technical Member, Kishore Vemulapalli, Judicial Member
Axis Bank Ltd. – Appellant
Versus
Krishna Ganga Spinning Mills Ltd. – Respondent
CP (IB)/32/7/AMR/2025 | IA (IBC)/428/2025
For the Appellants/Petitioners: Mr. Durga Bose Gandham
For the Respondents: Mr. Y. Surya Narayana
The court upheld that a corporate insolvency resolution process may be initiated by a financial creditor when the debtor's default exceeds the threshold limit, establishing the necessity of proper authorization documentation.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 7 and 60(5) - Corporate Insolvency Resolution Process - Petition filed by Financial Creditor against Corporate Debtor for default of Rs. 34,07,53,683/- admitted. Jurisdiction lies with Tribunal as Registered Office is in Andhra Pradesh - IRP appointed as per due process. (Paras 1-4, 21, 24)
(B) Petition filing authority - The requirement for a Power of Attorney to be backed by a Board Resolution was upheld. The Corporate Debtor contended that the financial creditor lacked authority to file the petition, but documents submitted established compliance with necessary procedural requirements. (Paras 7, 14, 18-20)
(C) Limitation period - The petition was filed within the limitation as per criteria specified in the Code, establishing the debtor’s liability. (Paras 15-17)
(D) Admission criteria - Adjudicating Authority must ascertain existence of financial debt and default exceeding one crore. The evidence reviewed confirmed the debts owed to the Financial Creditor. (Paras 18, 19)
Findings of Court:
The petition meets all necessary legal and procedural stipulations, establishing claims against the Corporate Debtor and enabling initiation of Insolvency Resolution Process.
Result: Petition admitted, irp appointed, and moratorium declared.
| Table of Content |
|---|
| 1. incorporation details and defaults established. (Para 1 , 2 , 3 , 4 , 5) |
| 2. evidence of debt and compliance with procedural requirements. (Para 6) |
| 3. corporate debtor's contention on maintainability. (Para 7 , 8) |
| 4. clarification on proper authority and authorization. (Para 9 , 10 , 11 , 12 , 13) |
| 5. determining the existence of default and threshold limit. (Para 14 , 15 , 16 , 17 , 18) |
| 6. verification of petition completion and irp appointment. (Para 19 , 20 , 21) |
| 7. admission of the petition and moratorium declaration. (Para 22) |
| 8. directives to the appointed irp and the parties. (Para 23 , 24) |
[ORDER]
[PER: BENCH]
CP (IB)/32/7/AMR/2025:
This Petition bearing no. CP (IB)/32/7/AMR/2025 (hereinafter referred to as“ CP 32/2025 ” or the“Petition”) has been e-filed on 06.08.2025 and physically filed vide Diary No.1683 dated 18.08.2025, by the Axis Bank Limited (hereinafter referred to as “Financial Creditor”), under Section 7 the Insolvency and Bankruptcy Code, 2016 , (hereinafter referred to as the“IBC” or the“Code”) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as the“IB Rules”) seeking initiation of Corporate Insolvency Resolution Process (hereinafter referred to as the“CIRP”) against M/s Krishna Ganga Spinning Mills Private Limited (hereinafter referred to as the“Corporate Debtor”) for having defaulted an amount of Rs.34,07,53,683/-
2. The Corporate Debtor is a Company with its registered office at KGSM Buildings, NH-5, G.T. Road, Thimmapuram-522233, Guntur District, Andhra Pradesh. Hence, the territorial jurisdiction lies with this Adjudicating Authority.
FACTS OF THE CASE:
3. The facts of the case, as stated in the Petition filed by the Financial Creditor, are summarized below:
(i) The Corporate Debtor having CIN No. U18100AP1983PTC004121 was incorporated under the provisions of the Companies Act, 1956 and is engaged in manufacturing materials.
(ii) The Financial Creditor having CIN: L65110GJ1993PLC020769 is a company incorporated under the Companies Act, 1956 and is a banking company within the meaning of the Banking Regulation Act, 1949.
(iii) On 23.11.2021, the Corporate Debtor approached the Financial Creditor for the credit facilities amounting to Rs.35.29 Crore. On 15.12.2021, the Financial Creditor sanctioned Term Loan-1 limit for an amount of Rs.8 crore to set up solar panels of Indigenous 3 MW new solar power machinery, Term Loan-2 limit for an amount of Rs.3,68,94,169/- to meet the liquidity mismatch arising out of Covid-19, and Term Loan-3 limit for an amount of Rs.2,10,00,000/-. The Corporate Debtor executed facility-cum- hypothecation agreement in favour of the Financial Creditor on 15.12.2021. On 15.09.2023, the Corporate Debtor again approached the Financial Creditor for renewal-cum-enhancement of credit facility of Rs.35.46 crore and the Financial Creditor issued a sanction letter for renewed/ enhanced facilities. On 16.09.2023, the Corporate Debtor executed working capital loan agreement in favour of the Financial Creditor.
(iv) The Corporate Debtor defaulted in payment of credit facilities availed from the Financial Creditor and account was classified as Non-Performing Asset (hereinafter referred to as the “NPA’) on 23.11.2024 in accordance with the guidelines issued by the Reserve Bank of India. Subsequently, the recall-cum-guarantee invocation notice of credit facilities sanctioned to the Corporate Debtor was issued on 15.02.2025 and as per the proof of service, the notice was received by the Corporate Debtor on 18.02.2025.
(v) The amount of debt is more than Rupees one crore and since the registered office of the Corporate Debtor is situated at Andhra Pradesh, this Adjudicating Authority has jurisdiction to entertain/ admit the Petition.
(vi) The Petition is complete and to best of the Financial Creditor’s knowledge, Shri Rajesh Chillale, (IBBI/IPA-001/IP-P00699/2017-2018/11226) is fully qualified and permitted to act as an
