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Judgment
ORDER
The present Application was filed on 29.08.2024 by Bank of Maharashtra (hereinafter referred to as “Applicant”/ “Financial Creditor”) through its Authorised Signatory, namely Sh. Abhishek Bindal, under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “Code”), for initiation of Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) against Vostok Foods Private Limited (hereinafter referred to as “Respondent”/“Corporate Debtor”), for the default amount of INR 3,54,93,671/-. The date of default, as mentioned in Part IV of the Application, is 04.12.2021.
Brief averments of the case as stated in the Application by Applicant/Financial Creditor and presented/argued by its Counsel are summarised hereunder:
The Respondent/ Corporate Debtor, i.e. Vostok Foods Pvt. Ltd., a Private Limited Company registered under the erstwhile Company Act, 1956, approached the Applicant for the grant of Cash Credit Working Capital of Rs. 25,00,000/- and Term Loan of Rs. 240 Lakhs for setting up food processing unit and submitted application/ Request Letter for making credit facilities available.
After usual verification and consideration of the requirement of the Corporate Debtor, the above-mentioned credit facilities vide sanction dated 14.03.2016, the terms and conditions of which were agreed to by the Corporate Debtor by appending their signatures on the sanction letter.
Further on, 14.01.2019, on the request of the borrowers, the term loan of Rs. 240 Lakhs was restructured with fresh sanction and other necessary documents for all to Rs. 235.50 Lakhs, WCTL of Rs. 18.97 Lakhs and FITL of Rs. 25.62 Lakhs.
The Corporate Debtor failed to fulfil its repayment obligations despite continuous follow-ups and communications from the Applicant/Financial Creditor. Accordingly, the Applicant/Financial Creditor issued a notice dated 04.12.2021 for an outstanding of an amount of INR 2,86,56,086/- as on 04.12.2021. The demand cum default notice called upon the Corporate Debtor to repay the outstanding amount within 7 (seven) days of the date of the notice.
The Applicant issued a demand notice under Section 13(2) of the SARFAESI Act, 2002, on 04.12.2021 due to default in repayment by the Corporate Debtor. Upon failure of the Corporate Debtor to comply with the said notice, the Financial Creditor proceeded to take symbolic possession of the mortgaged properties under Section 13(4) of the SARFAESI Act, 2002. Accordingly, on 19.02.2022, symbolic possession of the secured assets was taken, and the possession notice dated 19.02.2022 issued under Section 13(4) was duly served upon the Corporate Debtor and has been annexed as Annexure P-36 to the Application.
The Corporate Debtor acknowledged the debt on 27.01.2022 through a Balance Confirmation Letter annexed as Annexure P-30 to the Application. Thereafter, the Bank filed Original Application No. 21 of 2022 under Section 19 of the Recovery of Debts and Bankruptcy Act, 1993, which is presently pending before DRT-I, Chandigarh.
The cumulative outstanding amount in respect of all the aforesaid credit facilities is Rs. 3,54,93,671, as tabulated hereunder
| S.N. | Facility | O/s inclusive of interest as on 20.03.2024 |
|---|---|---|
| 1. | Term Loan of Rs. 240 Lakhs | Rs. 3,12,53,463/- |
| 2. | Term Loan (WCTL Limit) of Rs. 18.97 Lakhs | Rs. 22,19,461/- |
| 3. | FITL Limit of Rs. 25.621Lac | Rs. 20,20,747/- |
| TOTAL | Rs. 3,54,93,671/- | |
The Applicant has asserted that they have complied with all the Terms and Conditions of the Loan Agreement dated 30.08.2016; however, the Corporate Debtor has miserably failed to fulfil its obligations under the same, and the Corporate Debtor has still not made payment(s) towards the outstanding loan amount or responded to the Demand Notice dated 04.12.2021 sent by the Financial Creditor. The Applicant has proposed the name of the Insolvency Professional, Sh. Ankur Bansal, having Registration Number IBBI/IPA-003/IP-N00370/2021-2022/13820, to act as Interim Resolution Professional (hereinafter referred to as “IRP”). A copy of the consent of the proposed IRP in Form No.2 has been annexed as Annexure P-3 to the Application.
During the hearing on 28.05.2025, this Adjudicating Authority allowed IA(I.B.C.)No.144(CH)2025, filed under Rule 38 of the NCLT Rules, 2016, permitting the Applicant to effect substituted service upon the Respondent Corporate Debtor by publication in two daily newspapers, one in English and one in Hindi, having wide circulation at the place of the Respondent’s registered office. In compliance with the said Order, an Affidavit vide Diary No. 02834/1 was filed stating that the notice was duly published in The Pioneer dated 14.08.2025 (English) and Dainik Savera Times dated 14.08.2025 (Hindi), copies whereof are annexed as Annexure A-1 and Annexure A-2 respectively to the Affidavit.
We have heard the submissions made by the Applicant's Financial Creditor and have gone through the material available on record carefully, along with the extant provisions of the Code and the settled position of law on the subject issue.
The Respondent has neither filed any reply nor has anyone appeared on their behalf. Even after the notice was duly published in the newspapers via substituted service, the Corporate Debtor neither replied to the present Application nor appeared before this Adjudicating Authority during the entire proceedings. Therefore, this Adjudicating Authority vide its Order dated 08.09.2025 decided to proceed ex parte.
It is noted that the Applicant granted a loan to the Respondent amounting to Rs. 3,54,93,671 under the Loan Agreement dated 30.08.2016, and the date of default is 04.12.2021. The Corporate Debtor acknowledged the said debt on 27.01.2022 through a Balance Confirmation Letter annexed as Annexure P-30 to the Application.
As we have extended adequate opportunity to the Respondent and it has failed to avail the opportunities given, we have no other alternative except to decide the case in accordance with the material available on record. The facts, as mentioned supra, make it clear that there exists financial debt which is payable and has been defaulted by the Respondent. The debt exceeds the threshold limit of Rs. 1 crore prescribed under Section 4 of the Code, and the Application is within the limitation period, as the Corporate Debtor acknowledged the debt on 27.01.2022 through a Balance Confirmation Letter. Therefore, the instant Application is complete in all respects, so as to initiate CIRP against the Corporate Debtor.
In the above circumstance, in exercise of powers conferred on this Adjudicating Authority, under the provisions of Section 7 of the Code, we admit the Application bearing CP(IB)No.230/CHD/HP/2025 for initiating CIRP against Corporate Debtor Vostok Foods Private Limited with the following consequential directions:
The moratorium under section 14 of the Insolvency and Bankruptcy Code, 2016, is declared for prohibiting all of the following in terms of Section 14(1) of the Insolvency and Bankruptcy Code, 2016.
the institution of suits or continuation of pending suits or proceedings against the corporate debtor, 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 Corporate Debtor, 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 Corporate Debtor in respect of its property, including any action under the Securitisation and Reconstruction of Financial Assets and the 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 Corporate Debtor.
The Order of moratorium shall have effect from the date of this Order till the completion of the Corporate Insolvency Resolution Process or until this Adjudicating Authority approves the Resolution Plan under sub-section (1) of Section 31 or passes an order for the liquidation of the Corporate Debtor Company under Section 33 of the Insolvency and Bankruptcy Code, 2016, as the case may be.
We appoint Sh. Ankur Bansal, having Registration Number IBBI/IPA-003/IP-N00370/2021-2022/13820, having address at SCO 66, SECTOR 47D, Chandigarh,160047, Email id -[email protected], to act as an IRP under Section 13(1)(c) of the Insolvency and Bankruptcy Code, 2016 in respect of the CIRP of the Corporate Debtor. The IRP shall conduct the Corporate Insolvency Resolution Process as per the provisions of the Insolvency and Bankruptcy Code, 2016, r.w. Regulations made thereunder. The IRP shall make a public announcement of the initiation of the Corporate Insolvency Resolution Process and call for submission of claims under Section 15 as required by Section 13(1) (b) of the Insolvency and Bankruptcy Code, 2016.
The supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended, or interrupted during the moratorium period. The Corporate Debtor is to provide effective assistance to the IRP as and when it takes charge of the assets and management of the Corporate Debtor.
The IRP shall perform all its functions as contemplated, inter alia, by sections 17, 18, 20 and 21 of the Insolvency and Bankruptcy Code, 2016. It is further made clear that all personnel connected with the Corporate Debtor, its Promoter, or any other person associated with the management of the Corporate Debtor are under a legal obligation under Section 19 of the Insolvency and Bankruptcy Code, 2016, to extend every assistance and co-operation to the IRP. Where any personnel of the Corporate Debtor, its Promoter, or any other person, is required to assist or co-operate with the IRP, do not assist or co-operate, the IRP is at liberty to make an appropriate Application to this Adjudicating Authority with a prayer for passing an appropriate Order.
The IRP shall be under a duty to protect and preserve the value of the property of the ‘Corporate Debtor Company’ and manage the operations of the Corporate Debtor Company as a going concern as a part of the obligation imposed by Section 20 of the Insolvency and Bankruptcy Code, 2016.
The Applicant/Financial Creditor is directed to pay an advance of Rs. 3,00,000/- (Rupees one lakh only) to the IRP within two weeks from the date of receipt of this Order, for smooth conduct of Corporate Insolvency Resolution Process, and IRP to file proof of receipt of such amount to the Adjudicating Authority along with First Progress Report. Subsequently, the IRP may raise further demands for Interim funds, which shall be provided as per the applicable Rules.
The Registry is directed to communicate a copy of this Order immediately to the Financial Creditor, Corporate Debtor, and Interim Resolution Professional and the concerned Registrar of Companies within 7 (seven) working days and upload this Order on the website after pronouncement of this Order.
The IRP shall also serve a copy of this Order to the various departments, such as Income Tax, GST, State Trade Tax, and Provident Fund etc those who are likely to have their claim against Corporate Debtor as well as to the trade unions/employees associations so that they are timely informed about the initiation of CIRP against the Corporate Debtor.
The commencement of the Corporate Insolvency Resolution process shall be effective from the date of this Order.
As a result, the CP (IB) No.230/CHD/HP/2024 stands allowed and disposed of.
Sd/- Sd/-
Kaushalendra Kumar Singh Khetrabasi Biswal