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Rs 58.55 Crore : NCLT Ahmedabad Admits CIRP Against
The has admitted a against over a of Rs 58.55 crore, firmly ruling that ongoing recovery proceedings under the or a by the do not bar an action under the .
The bench, comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma, appointed Mr. Bhavesh Manubhai Rathod as the to take control of the .
When Two Recovery Regimes Collide: SARFAESI vs. IBC
The case originated from a loan of Rs 25 crore extended by to and its co-borrowers in December 2023, followed by a further top-up of Rs 25.03 crore in December 2024. The account was classified as a on . Before the original lender could enforce its security under the , the ED provisionally attached the mortgaged property under the Prevention of Money Laundering Act. Soon after, Poonawalla Fincorp assigned the entire debt along with underlying rights and securities to on . The assignee then approached the NCLT with a Section 7 petition claiming Rs 58.55 crore as on , comprising Rs 46.67 crore in principal and Rs 11.88 crore in penal interest and charges.
The 's Multi-pronged Defences
urged the tribunal to dismiss the petition on several grounds. It argued that it was merely a and not the principal borrower, and that initiating CIRP against an LLP with a capital contribution of only Rs 1 lakh for such a large debt was unwarranted. It also pointed to a discrepancy in the date recorded in the – for one facility and for another. Most significantly, it contended that the existence of SARFAESI proceedings and the ED's made the IBC petition a mere recovery tool rather than a genuine insolvency resolution.
Legal Analysis: Why Every Defence Fell Short
The NCLT rejected each objection with clear reasoning. On the point, the tribunal noted that the loan documents plainly listed Capbridge as a borrower, and under , a corporate person that owes a debt qualifies as a . The slight variation in dates was explained by the fact that the second facility was only a top-up loan, while the account had already been classified as NPA on – a consistent disclosure in the petition.
The most critical ruling addressed the interplay of statutes. The bench observed:
"The remedies available under the
and the Insolvency and Bankruptcy Code operate in different fields, and initiation of statutory recovery measures does not preclude proceedings under Section 7 of the Code."
Similarly, the ED attachment, while having implications during the CIRP,
"does not extinguish the
or the occurrence of
"
and does not affect the petition's
.
The tribunal relied on binding precedents including , , and , which hold that once the existence of a and is established, the adjudicating authority must admit the petition. The decision in , cited by the respondent, was distinguished on its facts.
Key Observations from the Judgment
"The remedies available under the and the Insolvency and Bankruptcy Code operate in different fields, and initiation of statutory recovery measures does not preclude proceedings under Section 7 of the Code."
"The of the secured asset by the Directorate of Enforcement under the also does not affect the of the present Petition. Such attachment may have implications during the CIRP, but it does not extinguish the or the occurrence of ."
Final Order: CIRP Commences with
The tribunal admitted the petition and directed the following: a under is effective immediately; Mr. Bhavesh Manubhai Rathod is appointed as IRP and must make a public announcement within three days; the financial creditor shall deposit Rs 5 lakh with the IRP towards initial CIRP expenses, subject to adjustment by the ; and all personnel of the are obliged to extend full cooperation to the IRP under .
The order reinforces the independence of the IBC regime from other recovery mechanisms, making clear that neither a secured creditor's SARFAESI action nor a criminal enforcement agency's attachment can block the initiation of corporate insolvency where a and are proved.
