The Ahmedabad Bench of the National Company Law Tribunal (NCLT) has admitted Sharanam Infraproject and Trading Limited into the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), rejecting the company's request for time to restructure its debts. The petition was filed by Maruti Corporation, an operational creditor seeking recovery of ₹10.35 crore for unpaid supplies of agricultural and ancillary products.

The bench, comprising Judicial Member Chitra Hankare and Technical Member Dr V. G. Venkatachalapathy, observed that a restructuring proposal cannot be a ground to reject a valid insolvency application under Section 9 of the IBC. The order noted that the debtor's own ledger and audited financial statements confirmed the outstanding liability, and that the default was undisputed.

Operational Creditor's Case and Debtor's Acknowledgment

Maruti Corporation, a sole proprietorship, entered into a supply agreement with Sharanam Infraproject on 22 October 2024. Under this agreement, the operational creditor supplied goods between 2 December and 24 December 2024. Invoices were raised for each consignment, and post-dated cheques were issued by the corporate debtor as payment.

However, by a letter dated 25 December 2025, Sharanam Infraproject acknowledged its liability of ₹10.35 crore — comprising ₹8.72 crore in principal and ₹1.62 crore in interest — but requested the creditor not to deposit the cheques, citing liquidity constraints and adverse business conditions. Despite a formal demand notice issued on 17 January 2026, the debt remained unpaid.

The operational creditor relied on documentary evidence including the supply agreement, invoices, transport receipts, cheques, and the debtor's acknowledgment letter. It argued that the debt was undisputed, admitted by the debtor, and corroborated by the debtor's own financial records, including audited statements. The applicant further submitted that the debtor's plea for reasonable time to restructure or improve its liquidity did not constitute a valid defence under Section 9 of the IBC.

Court's Rejection of Restructuring as a Defence

In its reply, Sharanam Infraproject admitted to the supplies and issuance of cheques but cited severe cash-flow constraints and liabilities towards multiple creditors. It argued that the request not to present the cheques was temporary and not a repudiation of debt. The debtor claimed to be negotiating restructuring arrangements and sought reasonable time to resolve its dues. However, it did not place any concrete repayment proposal or schedule before the tribunal.

The NCLT, after hearing both sides and perusing the documents, found that the application was within the limitation period, the debt was admitted, and a default had occurred. It noted that the post-dated cheques were withheld due to a liquidity crunch. The tribunal emphasised that the debtor's own ledger and audited financial statements confirmed the outstanding liability. It held that restructuring proposals cannot be a ground for rejection of an insolvency petition.

Accordingly, the tribunal allowed the petition and admitted Sharanam Infraproject into CIRP, imposing a moratorium on any further legal proceedings against the company. The bench also appointed Amrish Navinchandra Gandhi, a registered insolvency professional, as the Interim Resolution Professional (IRP) to manage the company's affairs during the resolution process.

The order underscores that operational creditors can seek relief under the IBC even when a debtor acknowledges liability but seeks additional time, as long as the statutory requirements of default and debt are met. The decision is likely to influence similar cases where corporate debtors attempt to delay CIRP by citing ongoing restructuring negotiations.

Next Steps in the Resolution Process

With the admission of the petition, the IRP will take control of Sharanam Infraproject's assets and operations. The moratorium will protect the company from further legal actions while the IRP invites claims from all creditors and forms a committee of creditors. The resolution process must be completed within 180 days, extendable by a further 90 days, as per the IBC timeline.

The operational creditor, Maruti Corporation, will now have a seat at the table as a member of the committee of creditors, depending on the value of its claim. The IRP is expected to issue a public announcement inviting claims within the next few days.

The case was argued by Advocates Prutha Bhavsar and V. Pandu Ranga Reddy for the operational creditor, and by Advocates Anmol Giri and Pradyumn Yadav for the corporate debtor.