The South Indian Bank Ltd vs M/s. Nellai Plantations Private Limited

The Petitioner/Financial Creditor, the South Indian Bank, has filed the present petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP), declaring moratorium and for appointment of Interim Resolution Professional (IRP), against the Corporate Debtor, M/s. Nellai Plantations Private Limited.

Part I of the petition sets out the details of the Financial Creditor from which it is evident that the Financial Creditor is registered under the Companies Act, 1956, as a banking company and regulated by the RBI. As per Part II of the application, the Corporate Debtor is a Private Limited Company with Corporate Identification Number: U15499KL1990PTC005576 and having its registered office at II/286, Mundakayam, Kottayam-686 513, Kerala, India. Therefore, this Bench has jurisdiction to deal with this petition.

As per Part III of the petition, the Financial Creditor has proposed the name of Mr Allen Bosco, IBBI Registration Number: IBBI/IPA-001/IP-P.02833/2023-2024/14351, as the Interim Resolution Professional.Part IV of the application signifies the amount of debt to the tune of Rs. 2,92,54,657.38/- (Rupees Two Crore Ninety-two lakh Fifty-four thousand six hundred fifty-seven and thirty-eight paise only) as on 10.11.2025.

Part V of the application describes the particulars of Financial Debt; documents, records and evidence of default as described below:

Facts of the case and submissions made by Ld. Counsel for the applicant:

The Respondent/Corporate Debtor filed its reply on 08.12.2025, contending that the present application is wholly misconceived in law, frivolous, and incomplete in terms of Section 7(2) of the Insolvency and Bankruptcy Code, 2016, and therefore liable to be rejected.

It is stated that one Mr. Alexander K. M., S/o K. M. Mathew, in his capacity as Managing Director, incorporated a company in 1990 under the name and style of Fashion Foods Private Limited, engaged in the production and sale of food items. Subsequently, on 06.07.2007, the company’s name was changed to Nellai Plantations Private Limited. The company is engaged in agricultural activities and manages plantations of various fruits such as guava, pineapple, banana, tender coconut, multiple varieties of mango, gooseberry, dragon fruit, sapota, pomegranate, cashew, etc., spread over approximately 84 acres of land. It is contended that the entity is not a commercial company.

The Respondent submitted that its continued operation as a going concern would be adversely affected by any change in management due to the unique environmental characteristics of the plantation. It is claimed that the Respondent’s land constitutes a significant biodiverse area, consisting of plant species collected from various parts of the world after extensive study of their ecological vulnerabilities. The Managing Director is said to possess specialised expertise essential for maintaining this biodiversity-based theme park. The plantation is described as a biodiversity hotspot rich in fruit-bearing species and other biological resources, including animals, birds, fish, and microorganisms, and also houses animal husbandry activities such as cattle, goat, rabbit, and duck farming.

It is stated that the trees cultivated in Nellai Plantation are rare and valuable, and their preservation is essential at a time when the younger generation is increasingly disconnected from the natural environment. The Respondent further submitted that it has trained and deployed 50 workers who possess substantial knowledge of the rare trees and plants within the plantation.

It is also contended that, since the plantation is located in Tamil Nadu, the present application is not maintainable before the NCLT, Kochi Bench.

The Respondent submitted that the application is not maintainable as no demand notice was issued to it under Sections 8 and 9 of the IBC, 2016. It is submitted that the Financial Creditor did not serve any notice acknowledging the alleged debt as required under the Code, and that the Respondent came to know of the claimed dues only through the present application. The Respondent further stated that earlier recall and demand notices were issued by the sanctioning authority in Madurai under the SARFAESI Act, not by the present applicant and not under the IBC, 2016. Those notices were duly replied to under Section 13(3) of the SARFAESI Act, and no further notice was issued thereafter under the IBC. The Respondent therefore asserted that the alleged dues do not fall within the definition of “operational debt.” It is also claimed that certain details furnished by the Financial Creditor in the application are incorrect or incomplete, and that the Respondent owns only 55 acres of land; hence, the IBC proceedings cannot extend to the entire property described in the application.

Have heard both sides and have perused the records. At the time of the final hearing, counsel for both parties argued, and the arguments have been reproduced in the order dated 09.12.2025:

The Respondent has primarily questioned the jurisdiction of this Tribunal to entertain the present application. It is further contended by the Respondent that no notice of demand, as required under Sections 8 and 9 of the IBC, 2016, was ever issued to the Respondent, and that the Applicant has failed to obtain any acknowledgement of debt from the Respondent. It is also pleaded that the Respondent has only 55 acres of land in his name; therefore, proceedings under the IBC, 2016 cannot be initiated against the entire land.

Having heard both sides, there is no dispute regarding the execution of the loan documents, the availment of credit facilities, the default, the creation of security interest, or the process followed under the Securitisation Act. However, the Respondent/Corporate Debtor has raised a plea that, since the property is situated in Tamil Nadu and the demand notice was issued by the Madurai Branch, the Application under Section 7 of the IBC, 2016 is not maintainable against the Respondent before the NCLT, Kochi Bench.

It would be appropriate to refer to the relevant provisions of Section 60(1) of the IBC, 2016.

The Bench under whose jurisdiction the registered office of the Company/Corporate Debtor is situated has the authority to entertain an Application under Section 7 of IBC, 2016. Admittedly, the Respondent/Corporate Debtor has its registered office in Kottayam, and therefore, the Application filed under Section 7 of the IBC, 2016 is well maintainable before the NCLT, Kochi Bench. For the purpose of determining jurisdiction to entertain an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, the location of the assets or the mortgaged property is irrelevant. Likewise, the issuance of a demand notice by any particular branch does not confer jurisdiction upon that branch to initiate the insolvency process. Jurisdiction is determined solely by the location of the registered office of the Corporate Debtor. Hence, there is no error in choosing the jurisdiction of the NCLT, Kochi Bench.

It is further argued that no demand notice was issued to the Corporate Debtor in terms of Sections 8 and 9 of the IBC, 2016. The Applicant has placed on record the demand notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, which is annexed as Annexure 25 at page 239 of this Petition. The issuance and receipt of the said notice have not been denied.

During the course of arguments, the Learned Counsel for the Respondent submitted that after the demand notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the Respondent had made certain payments. It appears that the Respondent has misconceived the provisions of the IBC, 2016. Sections 7 and 9 of the IBC, 2016 are distinct provisions operating for different categories of creditors. The notice under Section 8 of the IBC, 2016, is required only for initiating proceedings under Section 9 of the IBC, 2016. There is no requirement to issue a notice under Section 8 of the IBC, 2016, for the initiation of proceedings under Section 7 of the IBC, 2016.

Section 7 of the IBC, 2016, deals with financial debts, whereas Sections 8 and 9 deal with operational debts. The learned Counsel for the Respondent vehemently argued that, as there was no demand notice, there was a breach of the principles of natural justice. However, the fact remains that the Financial Creditor has issued a demand notice, annexed as Annexure 25, and it appears that the Respondent has misunderstood the provisions of the IBC, 2016. The Respondent has taken the defence of non-issuance of a demand notice under Section 8 of the IBC, 2016, although no such notice is required to be issued under Section 7 for initiating the Corporate Insolvency Resolution Process (CIRP). Such a defence is therefore untenable.

The present proceedings are for the initiation of the CIRP and are not meant for the recovery of dues or enforcement of securitisation measures. Consequently, the other defences raised by the Respondent are also not tenable.

The Applicant has duly proved, on record, the existence of debt and default under Section 7 of the IBC, 2016. The amount claimed is more than Rupees 1 crore, which is the threshold as per Section 4 of IBC, 2016. The loans sanctioned constitute a financial debt within the meaning of Section 5(8) of the Code, being disbursal against consideration for the time value of money.

Petitioner has placed on record a recall notice dated 05.06.2025 and a notice issued under section 13(2) of the SARFAESI Act, 2002, dated 23.07.2025. The claim is within the limitation period calculated from the date of execution of the loan documents and commission of default, and the respondent has failed to respond to the date of default as reported to NeSL. The financial debt exceeds the threshold limit of Rupees 1 Crore. Accordingly, this Adjudicating Authority is satisfied that a financial debt exists, and the Corporate Debtor has committed default in repayment, and finds no legal impediment to initiate the process under section 7 of IBC against the respondent on the default reported by the Petitioner against the respondent based on the material available on record.

In light of the above facts and circumstances, it is hereby ordered as follows: -

The Registry is directed to send e-mail copies of this order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps.

Certified Copy of this order may be issued, if applied for, upon compliance with all requisite formalities.

File be consigned to records.