Canara Bank vs M/s. Krishna Showbiz Services Pvt. Ltd

[PER: BENCH]

This is an Application bearing C.P. (IB) No.1068/MB/2025 filed on 01.10.2025 by Canara Bank, the Applicant (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “the Code”) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as “the AAA Rules”) through Mr. Rupesh Pillewan - Authorised Signatory of the Applicant vide Power of Attorney dated 16.11.2024 for initiating Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) in respect of M/s. Krishna Showbiz Services Pvt. Ltd., the Corporate Debtor (CD).

The Applicant is incorporated under Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Act v of 1970) on 31.03.1970. The CD is a group company of Sri Adhikari Brothers Television Network Ltd.

The Applicant has relied on the following documents:

xxviii. Copy of Order passed in CP (7B)/145/MB/2025 dated 21.07.2025

As per Part-IV of the Application the total amount claimed to be in default by the Applicant is Rs. 261,93,58,361.08/- (Two Hundred and Sixty-One Crore Ninety-Three Lakhs Fifty-Eight Thousand Three Hundred and Sixty-One Rupees and Eight Paisa) including principal amount of Rs. 83,62,51,830.43/- (Eighty-Three Crore Sixty-Two Lakhs Fifty-One Thousand Eight Hundred and Thirty Rupees and Forty-Three paise) and uncharged interest amount of Rs. 178,31,06,530.65/- (One Hundred and Seventy-Eight Crores Thirty-One Lakhs Six Thousand Five Hundred and Thirty Rupees and Sixty-Five Paise).

The date of default is mentioned as 18.10.2017.

It is submitted that the Applicant sanctioned Term Loan Facility aggregating to Rs. 100,00,00,000/- which is disbursed as follows:

This Tribunal vide interim order dated 10.10.2025 directed the Applicant to file an additional affidavit clarifying the date of default mentioned in the Application and if the Application is within the limitation period.

The Applicant in compliance of the above-mentioned direction, filed an Additional Affidavit dated 06.11.2025 and clarified the following:

This Tribunal vide interim order dated 10.10.2025 records as follows:

From the above order it is clear that the CD has admitted the debt and default and is having no objection in admitting this Application.

The CD filed an Additional Affidavit dated 05.11.2025 and stated the following: -

The Applicant has relied on the following judgment:

We have heard the Ld. Counsels for the Applicant and the CD and have perused the records as placed before us. Our findings in the matter are as under: -

The CD had approached the Applicant for financial facility. On perusal of the documents it is seen that the Applicant had sanctioned a Term Loan facility of Rs. 100 crores vide Sanction Letter dated 09.01.2014 having Ref. No. CBFM/CR716/1129/SSJ/2014. The CD had sought modification in the above said Term Loan facility and the same was permitted by the Applicant vide Sanction Letter dated 03.04.2014 having Ref. No. CBFM/CR716/1433/SSJ/2014. However, the sanction letter had no change in the term loan. Further, vide Sanction Letter dated 29.12.2014, the Applicant allowed a balance amount of Rs. 50 crores under the Term Loan of Rs. 100 crores.

On perusal of the Term Loan A/c bearing No: 0214773000041, the Applicant had disbursed the above facility as follows:

It is noted from the aforesaid facts that the Applicant had disbursed the amounts and there arose a financial relation between the parties.

The loan facilities were secured by way of Hypothecation cum loan Agreement dated 17.04.2014, Letter evidencing Deposit of Title Deeds Declaration cum Undertaking dated 17.04.2014 and Guarantee Agreements dated 17.04.2014. Further, the CD has acknowledged the debt vide letter dated 30.09.2016.

The repayment terms of the term loan account as per the Sanction Letter dated 09.01.2014 are as follows:

From the above terms, we see that the CD had to repay the term loan facility in 72 monthly instalments, however the interest was to be paid monthly as and when due.

Further, the events of default as per the Sanction Letter dated 09.01.2014, is reproduced as below:

As per the above-mentioned events of default, we notice that the CD had not complied with the sanction terms.

Further, the Applicant sent reminder letters dated 13.09.2017 and 16.09.2017 requesting to repay the overdues in loan account and informed that loan account will slip into NPA on 15.09.2017 due to non-payment of the overdues. The Applicant issued another letter dated 19.10.2017 to the CD informing about the downfall in shares pledged as security to the term loan and that the account of the CD has slipped to NPA for not clearing the overdues despite repeated request from the Applicant. To this, the CD replied vide letter dated 27.09.2017 requesting to grant more time to repay the dues. Once again, the CD sent a letter dated 29.12.2017 to the Applicant proposing restructuring of the term loan to which the Applicant replied vide letter dated 16.01.2018 requesting for details as mentioned in that letter before considering restructuring. The CD furnished the details as requested by the Applicant vide letter dated 31.01.2018.

Thereafter, the Applicant issued notice under Section 13(2) of the SARFAESI Act dated 31.03.2018 to the CD demanding to pay the outstanding dues amounting to Rs. 97,47,74,522.57/- within 60 days. The demand notice was delivered to the CD as the RPAD’s are attached to the Application. The CD failed to pay the outstanding dues within the stipulated time period. Further, the Applicant sent legal notices dated 08.05.2018 and 15.05.2018 to the CD and its guarantors which was received by the CD and its guarantors as we can see from the postal receipts and track reports attached to the Application. The CD replied to these letters vide its letters dated 21.05.2018 and 07.06.2018 requesting to recall the demand made by the Applicant. Further, the Applicant sent another letter dated 09.09.2024 for a default amount of Rs. 2,39,31,04,171.77/- which is inclusive of interest as on 09.09.2024. Thereafter, the Applicant filed this Application.

Further, the Applicant has attached the Balance Sheets of the CD for the FY 2016 – 2017, 2017-2018, 2018-2019, 2019-2020, 2020-2021, 2021-2022, 2022-2023 and 2023-2024. The admission of liability in the balance sheets amounts to the acknowledgment of liability by the CD due to which the period of limitation gets extended in view of section 18 of the Limitation Act, 1963.

The Applicant stated that the date of default is 15.09.2017 i.e. the date when the account of CD was declared as NPA. The Applicant has rectified the date of default by way of an Additional Affidavit dated 06.11.2025 wherein it is stated that the date of default as per Demand Notice dated 31.03.2018, loan recall notice dated 08.05.2018 and original application no. 203/2021 states the date of NPA as 15.09.2017. The Applicant has filed the Application on 01.10.2025. Further, the Applicant relies on the judgment of Hon’ble Supreme Court in Asset Reconstruction Company (India) Limited Vs. Bishal Jaiswal and Another reported in (2021) 6 SCC 366, wherein it was held that an entry made in the company’s balance sheet amounts to an acknowledgment of debt and has the effect of extending the period of limitation under section 18 of Limitation Act 1963. Hence, relying upon the above judgment we note that the Application is within limitation period.

The Applicant has placed on record the NeSL record of default in Form D, which reflects the Status of Authentication of default as ‘Authenticated’ and the total outstanding amount as Rs.2,59,09,33,223.08/- and date of default as 18.10.2017.

The Applicant has relied on the judgment of the Hon’ble Supreme Court in Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407 wherein the Hon’ble Supreme Court held that, once the debt and default are established than the Adjudicating Authority must admit the petition. We hold that the reliance placed by the Applicant on the above-mentioned judgment is relevant and appropriate.

Moreover, the CD has admitted the outstanding debt and is not opposing the admission of the CD into CIRP, through an Additional Affidavit dated 05.11.2025.

The Applicant has proposed the name of Mr. Mayank Rameshchandra Jain to act as the Interim Resolution Professional (IRP) and has given his declaration in Form 2, inter alia, stating that no disciplinary proceeding is pending against him. The Applicant has attached valid AFA in Form B of the IRP which is valid till 31.12.2026.

Thus, it is clear from perusal of the record that an amount more than the threshold limit of Rs.1 Crore under Section 4 of the Code was due and payable by the CD to the Applicant. Hence, we find that the Applicant has been able to substantiate the existence of a financial debt due and payable by the CD which remained unpaid. The debt so owed by the CD to the Applicant falls within the definition of “financial debt” under Section 5(8) of the Code.

In view of the above, we find that requisite conditions necessary to trigger CIRP in respect of the CD are fulfilled, the Application is complete as all the relevant documents have been attached by the Applicant along with the Application. As a result, the matter deserves to be admitted under Section 7 of the Code.

We make it clear that at this stage we have not crystalized the amount as claimed in this Application, the same is left to be collated by the IRP.

In view of the aforesaid findings, Application bearing C.P.(IB) No.1068/MB/2025 filed under Section 7 of the Code by Canara Bank, the Applicant, for initiating CIRP in respect of M/s Krishna Showbiz Services Private Limited, the Corporate Debtor is hereby admitted.

We further declare moratorium under Section 14 of the Code with consequential directions as mentioned below: -