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Judgment
ORDER
PER : SHRI ASHOK KUMAR BHARDWAJ, MEMBER (J)
Present petition has been preferred by Axis Bank Limited (hereinafter referred to as Applicant), initiating CIRP qua Ridley Life Science Pvt. Ltd. (hereinafter referred to as Corporate Debtor). The financial facilities extended by Applicant to Corporate Debtor as also the date of default are mentioned in Part-IV of the application which reads thus:
The CD opposed admission of the application by filing a detailed reply, espousing therein:-
When the amount of default alleged in the application is Rs. 10,35,66,457.32, the documents relied upon by the Applicant indicate different outstanding amounts viz:-
a. Rs. 8,35,89,412.05/- as per letter dated 01.08.2024 issued by the Respondent’s Corporate Debtor.
b. Rs. 9,72,60,403/- as per the Loan Recall Notice dated 09.04.2025.
c. Rs. 9,51,33,117.34/- as on 30.04.2025 in terms of the Notice issued under the SARFAESI Act dated 27.05.2025.
d. Rs. 6,28,12,147.27/- as per the Respondent’s settlement letter dated 10.11.2025.
e. Rs. 4,46,33,447.06 as per the Petitioner Bank’s own statement dated 20.02.2026.
f. Rs. 10,35,66,457.32/- as stated in Section 7 Petition.
The Financial Creditor failed to file any authenticated record of default from an Information Utility as required under Section 7(3)(a) of the IBC. Apart from a self-prepared calculation sheet annexed as Annexure A-13 to the Petition, there is no independent document substantiating the alleged default amount of Rs. 10,35,66,457.32.
The Financial Creditor has failed to highlight that the declaration of loan account of CD as NPA as well as the Loan Recall Notice was a consequence of fraud declaration which has been stayed by the Hon’ble Delhi High Court.
The present proceedings have been initiated to overreach the proceedings pending before the Hon’ble High Court.
Pursuant to the order passed by the Hon’ble High Court, the Corporate Debtor submitted a detailed One Time Settlement Proposal dated 07.08.2025 vide e-mail dated 10.11.2025 the Corporate Debtor reconciled the account and quantified the outstanding amount at Rs. 6,28,12,147.27.
The Financial Creditor relied upon the Settlement Proposal to establish the default, without appreciating that the settlement amount was reduced from Rs. 6,28,12,147.27 to Rs. 4,46,33,447.06, as per Applicant’s own bank statement dated 05.03.2026.
After the interim order dated 08.08.2025 passed by the Hon’ble High Court, an amount of Rs. 1.80 Crores was paid by the Corporate Debtor to the Applicant on 27.08.2025, 28.08.2025, 01.09.2025 and 02.09.2025 towards the outstanding dues. The payment demonstrates bona fide intent of the Respondent to regularise the account.
As far as the plea regarding the interim stay granted by the Hon’ble High Court is concerned, it is seen from the order dated 08.08.2025 passed by the Hon’ble High Court that these are the order dated 14.02.2025 and letter dated 13.02.2025 and the connected proceedings prior and subsequent to issuance thereof, pertaining to declaring the account of the CD as fraud which were under challenge before the Hon’ble High Court. The grievance raised by the CD before the Hon’ble High Court is related to declaration of the account of the CD as fraud. Though, the order takes note of settlements regarding the amount of debt, it is nowhere directed that the Applicant could not have initiated CIRP. After the order dated 08.08.2025 passed by the Hon’ble High Court, the next date fixed was 05.12.2025. The Corporate Debtor could not explain the further development in the matter on or after 05.12.2025. Nevertheless, we could see from the website of Delhi High Court that on 12.03.2026, the Hon’ble High Court rejected the plea for keeping the present proceedings in abeyance. The order dated 12.03.2026 reads thus:-
“CM APPL. 14837/2026
1.This is an application filed under Section 151 of the CPC, 1908, on behalf of the petitioner seeking the following prayers:-
“a)Direct the Respondent No. 1 to keep in abeyance further proceedings in Company Petition (IB) No. 73/ND/2026 pending before the Hon’ble NCLT, Principal Bench, New Delhi;
b)Direct Respondent No. 1 to consider and decide the Petitioner’s settlement proposal dated 07.08.2025 and email dated 10.11.2025 in a time-bound manner;...”
2.The prayers made in the application are misconceived as this Court cannot grant these prayers. The petitioner is at liberty to approach the National Company Law Tribunal in this regard.
3.Mr. Sharma, learned counsel for the petitioner, states that the petitioner is interested in settling the matter and is only seeking instalments to make the payment of the reconciled amount.
4.In this view of the matter, the petitioner shall approach the respondent No. 1 bank with its proposal which shall be considered by the bank in accordance with their rules and regulations.
5.The application is disposed of in the aforesaid terms.”
The default in payment of debt and declaration of the account as fraudulent are again two different aspects. The requirement of Section 7(5)(a) of IBC to be satisfied before admission of application is occurrence of default and not declaration of account as fraudulent.
After 04.05.2026 when we reserved the order in IA-1791/ND/2026, the Applicant preferred IA-2192 of 2026. Even in the said IA also, there is no mention about the subsequent development in the proceedings in which order dated 08.08.2025 was passed. Thus, we are unable to appreciate the support, the Corporate Debtor seeks to derive from the order dated 08.08.2025 passed by the Hon’ble High Court in the present proceedings.
As far as the plea regarding calculation of the amount of default is concerned, so long as the amount is above one crore i.e. the threshold limit, in the present proceedings, this Tribunal need not delve into the issue of calculation. In any case, in the reply filed by it, the Corporate Debtor itself has admitted that the amount defaulted to be paid is above Rs. One Crore. In para 25 of the reply, it is the stand taken on behalf of the CD that the amount of debt defaulted to be paid is Rs. 4,46,33,447.06. The para reads thus:-
“25.The Financial Creditor relies upon the settlement proposals to establish the default amount however the amount mentioned as alleged admission of debt is Rs. 6,28,12,147.27 and further reduced to Rs. 4,46,33,447.06 as per the Petitioner Bank's own statement dated 05.03.2026 and the alleged default in the present Petition is of 10,35,66,457.32.”
As far as evidence of disbursement is concerned, copy of the Bank Account Statement of the Financial Creditor along with certificate 2A of the Banker’s Book Evidence Act, 1891 issued by the Financial Creditors’ bankers are annexed as Annexure-A30 to the application.
To establish the default, the Applicant has enclosed with the petition, copy of Loan Recall Notice cum Guarantee Invocation Notice dated 09.04.2025 issued by FC. The Applicant has also placed on record the notice under Section 13(2) of SARFAESI Act, 2002. Part-V of the application reads thus:-
As can be seen from Part-III of the application, the Applicant has proposed the name of Mr. Ashish Singh, IP for being appointed as IRP. The RP has furnished his written consent in the Form prescribed under Rule 9(1) of I&B (Application to Adjudicating Authority) Rules, 2016. A copy of the consent is available on record as Annexure A-3 to the application. In the consent form the RP has declared that no disciplinary proceedings are pending against him. The relevant excerpt of the consent form reads thus:-
“(iv)Certify that there are no disciplinary proceedings pending against me with the Board or ICSI Institute of Insolvency Professionals of India”
The AFA issued in favor of the RP in prescribed from viz. Form B is available on record at page 63 of the Application (Annexure- A3 colly).
On one hand the requirements of Section 7(5)(a) are met on the other hand the stand taken on behalf of the Corporate Debtor in its reply is misconceived and baseless. Section 7(3) of the Code talk of record of default or such other evidence of default as may be specified. If we look at Regulation 2A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, certified copies of entries in the relevant account in the Banker’s Book as defined in clause (3) of Section 2 of Banker’s Book Evidence Act 1891, is prescribed evidence for the purpose of clause (a) of sub-section (3) of Section 7 of the Code. The Regulation 2A reads thus:-
“Regulation 2A: Record or evidence of default by financial creditor.
[2A. For the purposes of clause (a) of sub-section (3) of section 7 of the Code, the financial creditor may furnish any of the following record or evidence of default, namely:-
(a)certified copy of entries in the relevant account in the bankers' book as defined in clause (3) of section 2 of the Bankers' Books Evidence Act, 1891 (18 of 1891);
(b)an order of a court or tribunal that has adjudicated upon the non-payment of a debt, where the period of appeal against such order has expired.]”
In the facts and circumstances of the case, as noted above we are left with no option but to admit the present application. Ordered accordingly.
In the wake, moratorium as provided under Section 14 of IBC, 2016 is declared qua the CD and as a necessary consequence thereof the following prohibitions are imposed, which must be followed by all and sundry:
The institution of suits or continuation of pending suits or proceedings against the Respondent including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;
Transferring, encumbering, alienating or disposing of by the Respondent any of its assets or any legal right or beneficial interest therein;
Any action to foreclose, recover or enforce any security interest created by the Respondent in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
The recovery of any property by an owner or lessor, where such property is occupied by or in the possession of the Respondent.
As proposed by the Applicant/FC, Ashish Singh [Reg. No. IBBI/IPA-002/IP-N00416/2017-2018/11230, E-mail-ashishsingh@gmail.com], is hereby appointed as IRP. It is further ordered that the IRP shall take charge of the CIRP of the Corporate Debtor with immediate effect and would take steps as mandated under the IBC, 2016 specifically under Section 15, 17, 18, 19(2), 20 and 21 of the Code read with extant provisions of CIRP Regulations, 2016. The IRP would also take steps as per Regulations 4A and 30 of IBBI (CIRP) Regulations, 2016.
The Applicant/ FC is directed to deposit Rs. 2,00,000/- with the IRP to meet the immediate expenses. The amount, however, will be subject to adjustment by the Committee of Creditors as accounted for by Interim Resolution Professional and shall be paid back to the Financial Creditor.
A copy of this Order shall immediately be communicated by the Registry/Court Officer of this Tribunal to the Applicant /Financial Creditor, the Respondent/Corporate Debtor and the IRP mentioned above.
In addition, a copy of this Order shall also be forwarded by the Registry/Court Officer of this Tribunal to the IBBI for their record.