Small Industries Development Bank of India vs M/s Hamsa Dairy Private Limited

Order pronounced and recorded vide separate sheets. The Application bearing IA (IBC)/296/2025 in CP (IB)/22/7/AMR/2025 filed by Applicant/ Corporate Debtor is allowed and disposed of. CP (IB)/22/7/AMR/2025 filed by the Financial Creditor is admitted and IRP is appointed.

[PER: BENCH]

The present Petition has been filed vide Diary No. 2119 dated 24.01.2025, by Small Industries Development Bank of India (hereinafter referred to as “SIDBI” or “Financial Creditor” or “Petitioner”) represented by its Deputy General Manager Shri Pravin Kumar under section 7 of the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as the “IBC” or “Code”) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as the “IB Rules”) seeking initiation of Corporate Insolvency Resolution Process (hereinafter referred to as the ‘CIRP’) against Hamsa Dairy Private Limited (hereinafter referred to as the “Corporate Debtor” or “Respondent”) for having defaulted in payment of outstanding dues of Rs.3,11,35,532.80 (Rupees three crore eleven lakhs thirty five thousand five hundred thirty two and eighty paisa only) as on 10.01.2023.

The Corporate Debtor is a Company incorporated on 03.03.2016 with its registered office at Survey No. 527, Muthukuru Village, Pedda Panjani Mandal, Chittoor-517408, Andhra Pradesh. Hence, the territorial jurisdiction lies with this Adjudicating Authority.

The facts of the case, as stated in the Petition filed by the Financial Creditor, are summarized below:

The Financial Creditor in pursuance of the above recall notice, further issued a recall modification notice, vide Ref. No.2025MAY07/L007321423, dated 07.05.2024, but the Corporate Debtor neither paid substantial/ required amount, nor regularized the said accounts.

Total dues as on – 3,11,35,532.80 /-Rupees Three Crore Eleven Lakhs Thirty Five Thousand Five Hundred and Thirty Two and Paise Eighty only along with further interest, Penal Interest, Penal Charges at contractual rates w.e.f. till payment or realization together with all costs and charges. Date of NPA: 10.04.2023. Date of Default: 10.02.2023

During the course of hearing held on 02.07.2025, the Counsel for the Financial Creditor submitted that there has been clerical typographical error in mentioning the date of default, and sough a week time to get instruction from the Financial Creditor and file a Memo.

Subsequently, the Financial Creditor vide dairy No. 1269 dated 03.07.2025, filed a Memo dated 03.07.2025, seeking rectification of the date of default mentioned in the Part-IV of the Petition along with the neat copy of the Form 1 with the corrected date of default i.e. 10.01.2023 in Part-IV and to take on record the Memo. The above Memo was taken on record vide Order dated 11.07.2025 of this Adjudicating and the Registry was directed to issue notice to the Corporate Debtor and upon receipt of notice, two weeks’ time was granted to the Corporate Debtor to file their Counter.

The Corporate Debtor vide Diary No. 1756 dated 29.08.2025, filed Counter denying the submissions made in the Petition and prayed to dismiss the Petition in view of the following:

The Financial Creditor also wrote to the GoAP on 20.06.2018, confirming that Rs.226 lakhs had been released out of Rs.450 lakhs sanctioned, and requested subsidy release and consequently, the GoAP vide proceeding dated 22.08.2018, released Rs.1,06,11,000/-, which was transferred to the Financial Creditor.

The Corporate Debtor also made payments totalling Rs.44,66,089/- (from 07.02.2023 to 09.01.2024) and Rs.38,00,000/- (from 16.04.2024 to 14.06.2024), which were not credited to the loan accounts, while the Statement of accounts of IDBI Bank Limited, Bangalore establishes these payments.

The Hon’ble Supreme Court has held that admission under Section 7 of the IBC is not mandatory but discretionary. In the present case, the Financial Creditor received more than Rs.1.5 crores from the GoAP in Jan– Feb 2025 and the Corporate Debtor’s unit is running with employment to around 50 employees, & serving the industrial objectives of the GoAP, hence, initiation of CIRP is unwarranted.

During the hearing held on 08.09.2025, the Counsel for the Corporate Debtor stated that after adjustment of the subsidy and some subsequent payments made by the Corporate Debtor, the outstanding amount would fall below the threshold limit of Rupees One Crore and sought time to establish the same by filing relevant documents.

Subsequently, the Corporate Debtor vide Diary No.1841 dated 15.09.2025, filed Interlocutory Application, bearing No. IA(IBC)/296/2025, seeking to take on record the Statements of accounts of IDBI Bank Limited, Bangalore. It is stated in the IA that the Corporate Debtor in the Counter filed in the Petition have stated that Rs.44,66,089/- paid from 07.02.2023 to 09.01.2024 and a sum of Rs.38 lakhs paid from 16.04.2024 to 14.06.2024 by the Corporate Debtor were not given credit to the loan account, but the Corporate Debtor inadvertently failed to file the statement of accounts, which establishes the payments and the same is filed through this IA.

The Financial Creditor filed the Counter Affidavit dated 17.09.2025 in the IA stating that:

We note that the additional documents placed by the Corporate Debtor in the IA (IBC)/296/2025 have been filed with the permission of this Adjudicating Authority and are also the necessary documents, for which no objection has been raised by the Financial Creditor, therefore, we are of the considered view that these documents needs to be taken on record for the proper adjudication of the present matter.

In view of the above, IA (IBC)/296/2025 is hereby allowed and disposed of.

During the course of hearing held on 22.09.2025, the Financial Creditor submitted that although the second instalment of subsidy amount of Rs.1.52 Crore was received during 23.01.2025, but the same was not credited to the loan account, as the same had been classified as a NPA on 10.04.2023, prior to the receipt of the amount. However, the Counsel for the Financial Creditor was unable to specifically identify the disbursement of the first instalment of the subsidy amounting to Rs.1.06 Crore received into the Corporate Debtor’s account and therefore, sought time to verify the same and to identify, where that subsidy amount had been reflected. The liberty was granted to the Counsels for both parties to substantiate their contention regarding the first instalment of the subsidy received from APFPS and how the subsidy received was treated in the Corporate Debtor’s account.

Subsequently, the Counsel for the Financial Creditor vide Diary No. 2029 dated 10.10.2025, filed Memo dated 09.10.2025 stating as below:

During the course of hearing dated 13.10.2025, both the counsels were heard at length for nearly 1:30 Hours. The Counsel for the Financial Creditor submitted that sum of Rs.1,06,11,000/- was received by the Financial Creditor, but pursuant to the request letters dated 12.10.2018 and 24.10.2018 issued by the Corporate Debtor, the said amount was disbursed to various suppliers. The Counsel for the Corporate Debtor agreed to the above submissions of the Counsel of the Financial Creditor, but raised the issue that Rs.44.66 Lakhs paid during the period between 07.02.2023 and 09.01.2024 and Rs.38 Lakhs paid during the period between 16.04.2024 and 14.06.2024 by the Corporate Debtor have not been accounted for by the Financial Creditor while working out the outstanding amount from the Corporate Debtor. The Counsel for the Financial Creditor submitted that these payments made by the Corporate Debtor has been duly reflected in the four account statements enclosed with the Petition at Page Nos.68 to 78 and also undertook to submit date wise details of the same in a tabular form.

Subsequently, the Financial Creditor vide dairy No. 2047 dated 14.10.2025, filed Memo dated 14.10.2025 enclosing therewith the statements of calculation of the four loan accounts of the Corporate Debtor.

The Corporate Debtor also filed Memo dated 13.10.2025 stating that the Hon’ble DRT vide its Order dated 16.09.2025, has dismissed the claim of the Financial Creditor, hence there is no claim exists against the Corporate Debtor. The copy of the DRT order has also been enclosed with the Memo.

During the course of hearing dated 15.10.2025, the Counsel for the Financial Creditor submitted that the compliance memo, providing the requisite payment details as directed, has been duly filed after serving a copy on the other side. The proxy counsel for the Corporate Debtor also confirmed receipt of the said memo.

We have heard the submissions of Counsels for the Financial Creditor and Corporate Debtor and other records carefully.

The first issue that arises before this Adjudicating Authority is “Whether the present Petition is filed within the period of limitation”.

The next issue that arises before this Adjudicating Authority is “Whether there is a financial debt and default in repayment thereof, when it became due and payable meets the minimum threshold limit of Rs. One crore as required under Section 4 of the IBC?”

After ascertaining that the instalments of the loans are linked to the first of disbursement of the loans, and thus the contention of the Corporate Debtor is not tenable, we proceed to examine, whether the outstanding default amount is above the threshold limit of rupees one crore as required under Section 4 of the IBC for admission of the Petition for initiation of CIRP against the Corporate Debtor.

In short, all expenditure on account of civil works that are not related to the production or processing is excluded.

The eligibility conditions of applicants are as under:

o The project proposals are required to be duly appraised by the bank/ financial institution and avail term loan. The term loan will not be less than 10% of the project cost. o Units which are already under commercial production and those which may start, commercial production within 2 months from the last date of application submission are not eligible. o Those units which obtain term loan on subsidized interest rates from NABARD are eligible for investment subsidy only.

In response to the notice inviting proposals by APFPS, application along with the required documents are to be submitted by the applicants. The proposal will be evaluated by the empanelled consultants / PMA appointed by APFPS as per criteria given at serial no:10. The evaluation reports will be placed before the State Level Empowered Committee (SLEC) for consideration of "Approval" to the projects.

The grant-in-aid will be released in two instalments:

The first instalment of grant would be released after the firm has utilized 50% of the term loan as well as 50% of promoter's contribution and on production of the following documents by the firm:

b. Approval of Building plan

c. NCE from Gram panchayat

We note that the Corporate Debtor was sanctioned the investment subsidy of Rs.212.22 lakhs (25% of eligible project cost) and interest subvention @ 7% to an extent of Rs.2 crores, totalling to Rs.4.12 crores to the Corporate Debtor vide order dated 21.05.2018 of GoAP. The relevant extract of the above Order are reproduced below:

We also note from the facts mentioned in the Petition and Counter that the investment subsidy of Rs.195.90 lakh (first instalment of Rs.106.11 lakh and second instalment of Rs.89.79 lakh) and interest subvention of Rs.62.55 lakh for the period 01.04.2019 to 31.03.2022 have been disbursed. The relevant extracts of the communications releasing the subsidy are reproduced below:

From the terms & conditions of the GoAP Scheme, it appears that the subsidy under the interest subvention scheme is applicable for five years from the date of commercial operation of the unit. However, it is not clear from the pleadings, whether further amount is still receivable under the scheme.

The Financial Creditor vide Memo dated 09.10.2025 have clarified that The first tranche of such subsidy of Rs.106.11 lakh was received by the Financial Creditor on 01.10.2018 in its account. Basing the request letters dated 12.10.2018 and 24.10.2018 placed by the Corporate Debtor, the certain amounts were transferred to its vendors and after transferring the amounts to the vendors, the Financial Creditor based on the request of the Corporate Debtor transferred the remaining subsidy amount of Rs.58,43,371/- to the account of the Corporate Debtor holding with IDBI Bank No lean account on 30.10.2018. The details of transactions reflecting in the bank statements of Corporate Debtor’s loan account are reproduced below:

The Counsel for the Corporate Debtor, during the course of hearing dated 15.10.2025, agreed to the above submissions of the Counsel of the Financial Creditor.

However, we also observe that the on receipt of the first instalment of the subsidy, the same was not credited to the Corporate Debtor loan accounts and was kept by the Financial Creditor, which would also have the financial impact on the Corporate Debtor.

During the hearing held on 22.09.2025, the Financial Creditor has already admitted that although the second instalment of subsidy amount of Rs.152.34 lakh was received on 23.01.2025, but the same was not credited to the loan account, as the same had been classified as a NPA on 10.04.2023, prior to the receipt of the amount.

The Corporate Debtor has also contended that the Financial Creditor has included unwarranted charges, like overdue and FIPI interest to inflate the liabilities. We observe that the outstanding amount excluding overdue Interest, FIPI Interest, penal Charges after 10.04.2024 plus GST and cost and charges is Rs.249.44 lakh and after reducing the second instalment of subsidy amounting to Rs.152.34 lakh, the outstanding amount works out to Rs.97.10 lakh, which is below the threshold amount of Rs. one crore. From the details of working at para 20(ii), we observe that the Financial Creditor has included overdue and FIPI interest amounting to Rs.2.95 lakh on Term Loan-III, even though the same has been fully repaid.

However, we observe that the Petitioner has claimed Rs.311.35 lakh in Part IV of Form 1 and after reducing the second instalment of subsidy amounting to Rs.152.34 lakh, the default amount still works out to Rs.159.01 lakh, which is above the threshold amount of Rs. one crore. Therefore, the instant Petition satisfies the threshold limit as prescribed under Section 4 of the IBC, as the overdue Interest, FIPI Interest, penal Charges etc. are purely contractual obligations between the Financial Creditor and the Corporate Debtor.

However, before admission, this Adjudicating Authority has to satisfy that the Application is complete and there are no disciplinary proceedings pending against the proposed Interim Resolution Professional (hereinafter referred to as the “IRP”). Further, Rule 4 of the IB Rules prescribes the procedural requirements, including the format and supporting documents required for filing such a Petition.

We have gone through the contents of the Application filed by the Financial Creditor and found that the same is complete. As per Part III of Form 1 of the Application, the Financial Creditor has proposed the name of Smt. Ramanathan Bhuvaneshwari, bearing IBBI/IPA-002/IP-N00306/2017-18/10864, as the IRP in the matter and also filed his written consent in Form 2 dated 17.10.2024, wherein, the proposed IRP has affirmed that she is eligible to be appointed as an IRP in respect of the Corporate Debtor herein and certified that there are no disciplinary proceedings pending against her with the Board or ICSI Institute of Insolvency Professionals.

As a sequel to the discussion above, the present Petition bearing CP (IB)/22/7/AMR/2025 filed by the Financial Creditor under section 7 of the Code for initiating CIRP against the Corporate Debtor, Hamsa Dairy Private Limited (CIN: Ul5202AP2016PTC098421), is hereby admitted and accordingly, the Moratorium is declared in terms of Section 14 of the Code:

Moratorium under section 14 (1) for prohibiting all of the following, namely:

The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgement, 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 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 Corporate Debtor.

It is hereby clarified that notwithstanding anything contained in any other law for the time being in force, a licence, permit, registration, quota, concession, clearance or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the moratorium period;

The provisions of sub-section of section 14(1) shall not apply to such transactions, agreements or other arrangement, as may be notified by the Central Government in consultation with any financial sector regulator or any other authority; and also to a surety in a contract of guarantee to a corporate debtor.

The credentials of the proposed IRP was verified on the IBBI website, which shows that the proposed IRP holds the valid Authorisation for Assignment up to 31.12.2025. The relevant extract of the IBBI website is given below:

Accordingly, we hereby appoint Ms. Ramanathan Bhuvaneshwari bearing Registration No. IBBI/IPA-002/IP-N00306/2017-18/10864, e-mail ID: [email protected] having registered address at C-006, Pioneer Paradise,24th Main,7th Phase, J.P. Nagar, Bengaluru, Karnataka, 560078 as IRP in the instant matter, with the following directions: -

The term of appointment of Ms. Ramanathan Bhuvaneshwari shall be in accordance with the provisions of Section 16(5) of the Code, subject to her written consent to be filed within 7 days of this order;

In terms of Section 17 of the Code, from the date of this appointment, the powers of the Board of Directors shall stand suspended and the management of the affairs shall vest with the IRP and the officers and the managers of the Corporate Debtor shall report to the IRP, who shall be enjoined to exercise all the powers, as are vested with the IRP and strictly perform all the duties as are enjoined on the IRP under Section 18 and other relevant provisions of the Code, including taking control and custody of the assets, over which the Corporate Debtor has ownership rights recorded in the balance sheet of the Corporate Debtor, etc. as provided in Section 18(1)(f) of the Code. The IRP is directed to prepare a complete list of the inventory of assets of the Corporate Debtor;

The IRP shall strictly act in accordance with the Code, all the rules framed thereunder by the Board or the Central Government and in accordance with the Code of Conduct governing her profession and as an Insolvency Professional with high standards of ethics and moral;

The IRP shall cause a public announcement within three days as contemplated under Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 of the initiation of the CIRP in terms of Section 13(1)(b) read with Section 15 of the Code calling for the submission of claims against Corporate Debtor;

The IRP/RP shall prepare the Audited Financial Statements as on date of the CIRP and shall submit before the CoC for consideration.

The IRP/RP shall also ensure that all the assets appearing in the Financial Statements on the CIRP date have been considered in the valuation report. The IRP/RP shall send individual communication through post or electronic means along with a copy of public announcement to all the creditors as per last available books of accounts / financial statements on the CIRP date of Corporate Debtor as prescribed under Regulation 6A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

The Corporate Debtor, its Directors, personnel and the persons associated with the management shall extend all cooperation to the IRP in managing the affairs of the Corporate Debtor as a going concern and extend all cooperation in accessing books and records as well as assets of the Corporate Debtor;

The Suspended Board of Directors is directed to give complete access to the Books of Accounts of the Corporate Debtor maintained under Section 128 of the Companies Act. In case, the books are maintained in the electronic mode, the Suspended Board of Directors are to share with the Resolution Professional all the information regarding Maintaining the Backup and regarding Service Provider kept under Rule 3(5) and Rule 3(6) of the Companies Accounts Rules, 2014 respectively as effective from 11.08.2022, especially the name of the service provider, the internet protocol of the Service Provider and its location, and also address of the location of the Books of Accounts maintained in the cloud. In case accounting software for maintaining the books of accounts is used by the Corporate Debtor, then IRP/ RP is to check that the audit trail in the same is not disabled as required under the notification dated 24.03.2021 of the Ministry of Corporate Affairs. A reference is made to the provisions of Section 128(5) of the Companies Act 2013, whereby every company should maintain its books of accounts for not less than eight financial years immediately preceding a financial year. Minutes and statutory records are the principal documents of the company that should be maintained and preserved since inception.

In view of the above mandatory provisions, the suspended directors of the board will ensure that the books of accounts for the eight previous financial years preceding the date of this order be made available to the IRP/ RP within 15 days of the initiation of the CIRP order. The statutory auditor is also directed to share the records maintained by him in the course of the audit of the accounts of the Corporate Debtor for the period of three years prior to the date of initiation of this CIRP order within the same period of 15 days.

In case of any non-cooperation by the Suspended Board of Directors or the statutory auditors, the IRP/RP may take the help of the police authorities to enforce this order. The concerned police authorities are directed to extend help to the IRP/ RP in implementing this order for retrieval of relevant information from the systems of the Corporate Debtor, the IRP/ RP may take the assistance of Digital Forensic Experts empanelled with this Bench for this purpose. The Suspended Board of Directors is also directed to hand over all user IDs and passwords relating to the Corporate Debtor, particularly for government portals, for various compliances. The IRP is also directed to make a specific mention of non-compliance, if any, in this regard in her status report filed before this Adjudicating Authority immediately after a month of the initiation of the CIRP.

The IRP/RP is directed to approach the Government Departments, Banks, Corporate Bodies and other entities with request for information/ documents available with those authorities/ institutions/ others pertaining to the Corporate Debtor, which would be relevant in the CIRP. The Government Departments, Banks, Corporate Bodies and other entities are directed to render the necessary information and cooperation to the IRP/RP to enable him to conduct the CIRP as per law.

The IRP shall, after collation of all the claims received against the Corporate Debtor and the determination of the operational position of the Corporate Debtor constitute a Committee of Creditors and shall file a report, certifying constitution of the Committee to this Adjudicating Authority on or before the expiry of thirty days from the date of her appointment, and shall convene first meeting of the Committee within seven days of filing the report of constitution of the Committee;

The IRP shall also serve a copy of this order to all relevant statutory departments such as Income Tax, GST (Centre and State), Provident Fund authorities, trade unions, and employee associations to inform them about the commencement of CIRP.

The IRP is directed to send a regular progress report to this Adjudicating Authority every fortnight.

The Financial Creditor is directed to deposit Rs.4,00,000/- (Rupees Four Lakhs Only) with the IRP to meet out the expense to perform the functions assigned to her in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The amount, however, will be subject to adjustment by the Committee of Creditors as to be duly accounted for by IRP and shall be paid back to the Financial Creditor.

A copy of this Order shall immediately be communicated to the Financial Creditor, the Corporate Debtor, IBBI, and the IRP named above by the Court Officer/ Registry of this Adjudicating Authority.

Accordingly, CP (IB)/22/7/AMR/2025 stands admitted.