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2026 Supreme(Online)(NCLT) 1969
NATIONAL COMPANY LAW TRIBUNAL
Jyoti Kumar Tripathi, Judicial Member, Ravichandran Ramasamy, Technical Member
VANATHI EXPORTS PRIVATE LIMITED – Appellant
Versus
Indian Bank – Respondent
CP(IB)/140(CHE)/2023
For the Appellants/Petitioners: R. Chandramohan, Rohan Rajasekaran, Ashlin Christo
For the Respondents: C. Ramaiah
Complete Section 10 IBC application with established default must be admitted despite ongoing creditor recovery proceedings.
Headnote:The Corporate Debtor filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016 read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) due to defaults on financial debts aggregating Rs.8,44,57,904/- to multiple creditors, including banks and financial institutions, with date of default from 25.08.2021. The application included board and shareholders' resolutions dated 22.04.2023, financial statements, and details of creditors. The Tribunal found the application complete, default established, and no disqualifications under Section 11, admitting the petition and appointing an Interim Resolution Professional. Key issues framed: whether the application satisfies Section 10 requirements; existence of financial debt and default; and any legal impediments for rejection. The Tribunal held that pendency of recovery proceedings or SARFAESI actions by creditors does not bar CIRP initiation under the Code, which provides a collective resolution mechanism. No evidence of fraud under Section 65 was found, and precedents like Unigreen Global and Go Airlines affirmed mandatory admission of complete Section 10 applications absent ineligibility. The application under Section 10 is admitted; CIRP initiated against the Corporate Debtor; Mr. N. Kumar appointed as Interim Resolution Professional; moratorium under Section 14 imposed; Corporate Debtor directed to pay Rs.2,00,000/- to IRP.
ORDER
(Heard through hybrid mode)
The present application has been filed by Vanathi Exports Private Limited (“the Corporate Debtor”) under Section 10 of the Insolvency and Bankruptcy Code, 2016 (“the Code”), read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against it. The application has been filed through one of its Directors and authorised signatory, Mr. P. Minish Kumar, by a Resolution of the Board of Directors of the Corporate dated 22.04.2023 and shareholders/ members resolution dated 22.04.2023 have been duly annexed Annex VII (c) and VII (d) respectively.
2. SUBMISSIONS OF THE APPLICANT:
2.1. The Corporate Debtor is a private company incorporated under the provisions of the Companies Act, 1956. Part-I of the application sets out the particulars of the Corporate Debtor i.e. Vanathi Exports Private Limited. It was incorporated on 15.12.2017 having its Office at No.3/1, 2nd Floor, Flat No.2/5, Ramachandra Road, T. Nagar, Chennai – 600017, with Authorized Capital as Rs.25,00,000/-. Part-II of the application sets out the particulars of the Proposed Interim Resolution Professional viz., Mr. N. Kumar having Reg. No. IBBI/IPA-001/IP-P00724/2017-2018/11254. Part-III of the application lists the particulars of the Financial / Operational Creditors (Annexure VI), amount of debt in default as Rs.8,44,57,904/- (Annexure VI) and date of default as 25.08.2021 and 27.09.2022 set out in Annexure I(b)
2.2. It is submitted that the Corporate Debtor had availed various financial facilities from several financial creditors, including Indian Bank, Fullerton India Credit Company Limited, Capital Float, and Aditya Birla Finance Limited, for the purpose of carrying on its business operations.
2.3. It is submitted that the loan facilities were sanctioned and disbursed by the aforesaid financial creditors under various loan agreements and loan specification letters. In particular, loan disbursement letters and loan specification documents issued by Capital Float and Fullerton India evidence the financial facilities extended to the Corporate Debtor.
2.4. It is further submitted that due to adverse financial conditions and severe cash flow constraints, the Corporate Debtor defaulted in repayment of its financial obligations to the lenders. Consequently, certain lenders issued recall notices and initiated recovery proceedings against the Corporate Debtor.
2.5. It is also submitted that Indian Bank classified the loan account as a non-performing asset and issued a slippage letter dated 01.07.2021, followed by a notice of transfer of account dated 17.08.2022 and sale notices dated 04.03.2023 and 04.05.2023 in respect of the secured asset.
2.6. It is submitted that Fullerton India Credit Company Limited also issued a loan recall notice dated 27.09.2022 calling upon the Corporate Debtor to repay the outstanding dues under the financial facility granted. 2.7. It is submitted that as on the date of filing of the petition, the total amount in default towards financial creditors, including amounts relating to corporate guarantees, aggregates to Rs.8,44,57,904/- (Rupees eight crores forty four lakhs fifty seven thousand nine hundred and four only).
2.8. It is further submitted that the Corporate Debtor also owes operational debts to various operational creditors, and the amount in default towards operational creditors is Rs. 24,71,700/- (Rupees twenty four lakhs seventy one thousand seven hundred only).
2.9. It is submitted that the financial position of the company has deteriorated to such an extent that it is no longer in a position to service its debts and continue its business operations in the ordinary course.
2.10. It is submitted that they have annexed various documents including loan disbursement letters, loan recall notice, loan statements, slippage letter issued by Indian Bank, notices issued by the lenders, copies of books of account
