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2026 Supreme(Online)(NCLT) 2804
NATIONAL COMPANY LAW TRIBUNAL
Sameer Kakar, Technical Member, Nilesh Sharma, Judicial Member
Canara Bank – Appellant
Versus
Supreme Housing And Hospitality Private Limited – Respondent
CP (IB) No. 1257/MB/2025|IA (I.B.C) 683/MB/2026
For the Appellants/Petitioners: Nitish Dhruva, Yash Dhruva, Niyati Merchant i/b MDP Legal
For the Respondents: Rohan Agrawal, Haaris Koradia i/b Sujit Lahoti & Associates
The interim moratorium under Section 96 of the IBC, triggered against personal guarantors, does not bar the initiation of CIRP under Section 7 against the principal borrower.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 7, 14, 60(5), 95, and 96 - Initiation of Corporate Insolvency Resolution Process (CIRP) - Interim moratorium under Section 96 upon filing of application against personal guarantors under Section 95 - Section 96 moratorium is person-specific and does not bar proceedings against the principal borrower under Section 7. (Paras 9.8, 9.9, 9.12)
(B) Limitation Act, 1963 - Section 18 - Acknowledgement of debt - Entries in balance sheets constitute valid acknowledgements and extend limitation. Repeated OTS proposals and revival letters also amount to acknowledgement of debt. (Para 9.4)
(C) Insolvency and Bankruptcy Code, 2016 - Section 7 - Scope of enquiry at admission - The Adjudicating Authority is only to ascertain the existence of a default from records of the information utility or evidence furnished by the financial creditor. It is not required to examine any dispute regarding the existence of such debt. (Para 9.23)
Facts of the case:
A financial creditor (FC) filed an application under Section 7 of the IBC, 2016 to initiate CIRP against the corporate debtor (CD) for a default in repayment of a term loan of Rs. 390 crores which was classified as NPA in 2017. Multiple prior CIRP proceedings had been initiated and settled via One Time Settlements (OTS), all of which the CD breached. The CD argued that the petition was barred by the interim moratorium under Section 96 of the IBC, triggered by the FC's filing of Section 95 petitions against the CD's personal guarantors.
Findings of Court:
The Tribunal found that the existence of financial debt and default was established through documentary evidence, including records from an information utility, bank statements, and acknowledgements in balance sheets and OTS proposals. The Tribunal held that the Section 96 moratorium is person-specific, applying only to the personal guarantors, and does not bar proceedings under Section 7 against the corporate debtor. The procedural defects raised by the CD were considered curable and had been addressed. The petitioner's breach of multiple settlement agreements was noted.
Issues: The main issues were whether the interim moratorium under Section 96 of the IBC, triggered by proceedings against personal guarantors, bars the initiation of CIRP against the principal borrower under Section 7; and whether the petition suffered from incurable procedural defects.
Ratio Decidendi: The court ruled that the interim moratorium under Section 96 is person-specific and cannot be extended to bar proceedings against the corporate debtor. The court also held that the Adjudicating Authority's role under Section 7 is limited to verifying the existence of a financial debt and default, and procedural defects that are curable cannot defeat substantive rights where debt and default are otherwise established.
Result: Application under Section 7 admitted; CIRP initiated against the corporate debtor; moratorium under Section 14 declared; Interim Resolution Professional appointed; interlocutory application filed by the CD dismissed as not maintainable.
ORDER
[PER: CORAM]
1. BACKGROUND
1.1 This C.P. (IB) No. 1257 of 2025 (Application) was filed on 13.11.2025 by Canara Bank, the Financial Creditor (FC) having PAN No.: AAACC6106G, 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, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Supreme Housing and Hospitality Private Limited, the Corporate Debtor (CD), having CIN No.:
U45201MH2006PTC165665.
1.2 This Application has been affirmed by one Mr. Gaurav Pareek, Senior Manager, Canara Bank. As per Part IV of the Application, the amount claimed to be in default is Rs. 5,67,43,40,067.80/- (Rupees Five Hundred Sixty-Seven Crore Forty-Three Lakhs Forty Thousand Sixty-Seven and Eighty Paise only) as on 31.10.2025, out of which principal amount is
2 | P age Rs.175,83,35,822.71/- and interest amounts to Rs.391,60,04,245.09/-. The date of default is stated as 01.07.2017.
1.3 The Applicant has proposed M/s. KDRA Insolvency Professionals Private Limited, having Registration No. IBBI/IPE-0059/IPA-1/2022-23/50037, to act as the Interim Resolution Professional (IRP) in case the Application is admitted.
2. CONTENTIONS OF APPLICANT (FC)
2.1 The Corporate Debtor had approached the Financial Creditor for grant/sanction of Term Loan on 12.01.2014. The Financial Creditor considered the request of the Corporate Debtor and grant/sanction of Term Loan (LRD) of Rs. 390.00 Crores vide sanction letter dated 29.03.2014 and the said amount was disbursed to the CD on 16.05.2014. Details of Credit facilities granted in the name of M/s. Supreme Housing and Hospitality Private Limited (“Corporate Debtor”).
3 | P age
2.2 As per the terms of the Sanction Letter, the Term Loan was repayable in
108 monthly structured instalments as per receipt of lease rentals commencing from March, 2014 for an amount of Rs. 5 Crores, and the last instalment of Rs. 7.86 Crores. To secure the aforesaid credit facilities, the CD executed various loan and security documents in favour of the FC. However, the CD availed and enjoyed the aforesaid Credit facility i.e. Term Loan (Lease Rental Discounting) of Rs.390 Crores but did not adhere to repay the outstanding dues as a result of which the account of the CD was classified as Non-Performing Asset (NPA) on 29.09.2017.
2.3 That due to the defaults committed by the CD, the FC accordingly filed a Company Petition No. 1397 of 2020 (“First Company Petition”) under section 7 of the IBC, 2016 before the Hon'ble NCLT, Mumbai which was admitted vide Order dated 23.11.2022.
2.4 Further, Company Appeal (AT) (Insolvency) No. 1436-1437 of 2022 along with IA No. 958, 959 and 1847, 1850 of 2023 was filed by the Suspended Directors of the CD against the Order dated 23.11.2022 before the Hon'ble NCLAT which was disposed of vide order dated 24th August 2023 in view of the acceptance of OTS (“1st OTS proposal”) and liberty was granted to the Financial Creditor to revive the Company Petition if the CD makes default.
2.5 Subsequently, a Company Petition came to be filed by the ICICI Bank Limited, being the Financial Creditor (“ICICI Bank”), against the CD under Section 7 of the Code for CIRP, being Company Petition No.348 of 2022. The same came to the admitted by this Hon’ble NCLT vide Order dated 14.02.2024, whereby CIRP was initiated against the CD. Further, Mr.
4 | P age Prashant Jain was appointed as the Interim Resolution Professional of the CD.
2.6 Furthermore, the said Order dated 14.02.2024 was challenged before the Hon’ble NCLAT by one of the suspended Director of the CD vide Company Appeal (AT)(INS) No. 342 of 2024.
2.7 That the Hon’ble NCLAT in Company Appeal No. 342/2024 vide Order dated 21.02.2024 directed for a status quo on the constitution of CoC or any other steps in furtherance of the Order dated 14.02.2024 and was further continued from time to time in view of an amicable settlement proposed by the CD.
2.8 In view of
