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NCLT Ahmedabad Bench Admits Kalahridhaan Trendz into CIRP Over ₹3.26 Crore Default
The has admitted into the under . The order, pronounced by Judicial Member Mrs. Chitra Hankare and Technical Member Dr. Velamur G Venkata Chalapathy on , came on a petition filed by over an unpaid debt exceeding ₹3.26 crore.
A Stalled Invoice Financing Deal
The financial relationship between the parties began in February 2024, when Kushal Finnovation Capital extended a structured invoice financing facility of ₹2 crore to Kalahridhaan Trendz. The loan agreement, executed under a sanction letter dated , carried an interest rate of 18% per annum with penal charges of 3% per month on overdue amounts. As security, the corporate debtor deposited cash collateral, executed a demand promissory note, and provided three personal guarantees from its directors—Mr. Niranjan D. Agarwal, Mr. Aditya Agarwal, and Mrs. Sunita Devi Agarwal—along with undated cheques.
Between May 6 and , Kalahridhaan Trendz submitted 26 invoices from Shree Maruti Enterprise against the facility. Kushal Finnovation Capital disbursed ₹1.81 crore after standard deductions. Repayment was due between August 4 and —90 days from disbursement. However, no payment was made.
Default, Recall, and Bounced Cheques
The financial creditor issued a loan recall notice on . When it deposited two of the undated cheques worth ₹1.04 crore each, both were returned with the remark “Account Closed.” A separate proceeding under was also initiated.
By the time of the petition, the total default stood at ₹3,26,46,084, including principal, interest, and penal charges.
Corporate Debtor’s Challenge and the Court’s Response
Kalahridhaan Trendz opposed the petition vehemently, filing a 72-page reply. It argued that the application was premature, barred by limitation, and riddled with suppressed facts. The corporate debtor pointed to an earlier Section 7 petition involving similar financing arrangements where the tribunal had raised concerns about the transaction’s structure, and contended that the present petitioner had not shown proper board authorization.
In rejoinder, the financial creditor denied all allegations and produced a board resolution dated , specifically authorizing the petition. It also filed an interlocutory application to change the nominated after the initiated action against the earlier nominee, Mr. Ritesh Prakash Adatiya.
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The NCLT found the core criteria for admission satisfied. It noted that the corporate debtor had executed promissory notes, guarantees, and cheques, none of which were specifically denied. The court stated:
“The relevant criteria for admitting this debt is whether the debt is due, defaulted. The amount of Debt is more than the threshold limit with interest due and payable.”
The tribunal also rejected the limitation objection, observing that the petition was filed within the prescribed period.
Admission and
The court ordered the admission of into CIRP under Section 7 of the IBC. Consequently, a under was declared, prohibiting the institution or continuation of suits against the corporate debtor, transfer of assets, enforcement of security interests, and recovery of property.
The tribunal appointed Mr. Chirag Rajendrakumar Shah as the IRP, directing him to make a public announcement, take charge of the corporate debtor’s assets and documents, and seek police assistance if needed. The financial creditor was directed to pay an advance of ₹2 lakh to the IRP within seven days to cover initial CIRP costs.
The commencement of the CIRP is effective from the date of the order, . The IRP will now invite claims and manage the corporate debtor as a until a is approved or is ordered.
