Unity Small Finance Bank Limited vs Lakhari Resources Private Limited & Anr.

By this common order, we dispose of CP(IB)/157(CHE)/2024 filed by Unity Small Finance Bank Limited (hereinafter referred to as “Petitioner/Financial Creditor”) under Section 7 of IBC, 2016 against Lakhari Resources Private Limited (hereinafter referred to as “Respondent/Corporate Debtor”) and IA(IBC)/873(CHE)/2025 filed by the Corporate Debtor against the Financial Creditor under Section 60(5) of IBC, 2016.

This petition under Section 7 of the Insolvency and Bankruptcy, 2016 (”IBC”) read with Rule 4 of the Insolvency and Bankruptcy Board of India (Petition to Adjudicating Authority) has been filed by the Financial Creditor against the Corporate Debtor to initiate Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor.

Part-I of the petition sets out the details of the Petitioner/Financial Creditor. Its Registered Office is situated at 1st Floor, Vinay Bhavya Complex, CST Road, Behind Amar Brass Bus Stop, Kalina, Santacruz (E), 400098. The Financial Creditor is represented by Ashokkumar Mallaiah Manda. (The Board Resolution issuing Power of Attorney to Ashokkumar Mallaiah Manda is annexed as Annexure A-2 of the Petition typeset). Part-II of the petition sets out the details of the Corporate Debtor. It has its Registered Office at 5/2-3/2, Murugesan Street, T Nagar, Chennai, Tamil Nadu – 600 017. It was incorporated on 01.10.2018 with Authorized Capital of Rs.4,50,00,000/- (Rupees Four Crores Fifty Lakhs only) and Paid-up Share Capital of Rs.1,90,18,000/-(Rupees One Crore Ninety Lakhs Eighteen Thousand only)

In part-III of the petition, the Petitioner has proposed the name of the Interim Resolution Professional, Shri. Jitender Kothari having Registration IBBI/IPA-001/IP-P00540/2017-2018/10965.

Part-IV of the petition sets out that an amount of Rs.7,50,00,000/-(Rupees Seven Crores Fifty Lakhs only), out of which the total debt due is Rs. 6,73,37,854/- (Rupees Six Crore Seventy-Three Lakhs Thirty-Seven Thousand Eight Hundred Fifty-Four Only). The amount in default comprises of principal amount of Rs.6,62,45,429/- and interest component of Rs. 10,92,425/-. The date of default is stated to be the date of declaration of the account of the Corporate Debtor as NPA i.e., 20.04.2024.

The details of loan facilities availed by the Corporate Debtor from the Financial Creditor are extracted below:

It is stated that when the Corporate Debtor failed to make the repayment of the aforementioned facilities in a timely manner, the Financial Creditor recalled the loan facilities extended vide notice dated 18.04.2024. However, no payment was made by the Corporate Debtor despite issue of the loan recall notice. Hence, the Financial Creditor declared both the accounts of the Corporate Debtor as non-performing asset (NPA) on 20.04.2024. Subsequently, the Financial Creditor issued notice under Section 13(2) of the Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act') on 24.04.2024 seeking payment of the outstanding amount under the aforementioned financial facilities.

It is stated that the Corporate Debtor failed to make repayment of the defaulted amount despite the notices issued by the Financial Creditor. The details of the outstanding due from the Corporate Debtor to the Financial Creditor is as below:

Part – V of the Petition discloses the details of the documents filed with the Petition to prove the existence of ‘Financial debt’ and the same are enumerated hereunder: -

Statement of Account from 01.05.2023 to 24.04.2024 for Loan Account No. C23001686 pertaining to Sales Bills Discounting Facility and Statement of Account from 26.08.2022 to 25.04.2024 for Loan Reference No. 5004386 pertaining to Term Loan facility (Annexure A-5)

Copies of agreements dated 17.08.2022, 30.09.2023 & 23.01.2024. (Annexure A-6) Colly

Copy of the Loan Recall Notice, dated 18.04.2024. (Annexure A-7)

Copy of the Notice, dated 24.04.2024, issued u/s 13(2) of the SARFAESI Act. (Annexure A-8)

Copy of the charge created by the Applicant over the immovable property owned by the Corporate Debtor situated at Apartment in 4th floor, Flat No. 'D', Raag Durbar, comprised in R.S. No.351 and Re-survey No.541/2, bearing Door No.52- A, Sterling Road, Nungambakkam Village, Egmore Taluk, Chennai-600034, with the CERSAI. (Annexure A-9)

Copy of NESL charge created by the Financial Creditor (Annexure A-10)

The Tribunal directed the Petitioner/Financial Creditor to file NeSL Certificate and Form-D vide order dated 23.07.2024. In compliance of the same, the Petitioner filed the latest Record of Default (RoD) in Form D on 26.08.2024. The record of default pertaining to the Sales Bill Discounting Facility reflects a default of Rs. 4,82,47,463/-. The status of authentication in the RoD reflects as “authenticated”.

The Respondent entered appearance on 16.12.2024 and sought two weeks’ time to file Reply. This Tribunal gave ample opportunity to the Corporate Debtor to file reply statement. However, even after awarding time and opportunity, the Respondent failed to file a reply/counter statement in this matter. Hence, this Tribunal closed the right of the Respondent to file its Reply in the hearing dated 11.03.2025.

The Petitioner has filed a table showing the details of disbursement and repayment of the Sales Bill Discounting Facility Account of the Corporate Debtor vide Additional Document Typeset dated 17.04.2025.

The Financial Creditor, in compliance with the directions issued by this Tribunal on 21.04.2025 placed on record the additional facts pertaining to the Term Loan Account No. 5004386 vide Affidavit dated 07.05.2025. The Financial Creditor has made the following submissions,

It is stated that the Financial Creditor, being a regulated Financial Institution (Bank), can only place reliance upon system generated Statement of Accounts of a particular loan account to demonstrate the amount disbursed to a particular borrower, as well as the amount /due and payable as on the date of generation of such Statement of Accounts. (The Statement of Accounts as on 25.04.2024 generated by the system pertaining to term loan facility is placed at Pgs. 54-57 of the petition typeset. The Statement of Accounts pertaining to the Term Loan Account for the period between 26.08.2022 to 15.04.2025 is annexed as Annexure A-II of the Affidavit typeset)

It is stated that the Corporate Debtor clearly defaulted in its obligation towards the said term loan account. The Statement of Accounts demonstrates the disbursal of an amount of Rs. 2,00,00,000/-as below:

It is stated that in terms of the Term Loan Agreement dated 17.08.2022, the Corporate Debtor undertook to repay the entire debt along with interest in monthly instalments beginning from 04.09.2022 till 04.12.2032. (A copy of the Term Loan Agreement is placed at Pg. 59 of the Petition typeset. A copy of Payment Schedule for the Loan Account 5004386 is annexed herewith and is annexed as Annexure A-I of the Affidavit typeset)

It is stated that the Corporate Debtor was highly irregular in the payment of the aforesaid monthly instalments and did not comply with the aforesaid Payment Schedule, thereby causing the Financial Creditor to levy penal charges to the tune of INR 87,312.91.

It is stated that the Corporate Debtor defaulted in meeting its obligation with respect to the Sales Bill Discounting Facility to the tune of INR 4,82,47,463/- as on 18.04.2024 i.e., the date on which the Loan Recall Notice was issued to the Corporate Debtor. Hence, the said Sales Bill Discounting Facility Account was classified as Non-Performing Asset (NPA) as on 20.04.2024. In terms of IRAC Prudential norms, if one an account of a particular borrower is classified as NPA, the other facilities are classified as NPA. Accordingly, the Term Loan Account No. 5004386 was also classified as NPA on 20.04.2024.

It is stated that notice of demand u/s 13(2) of the SARFAESI Act, 2002 dated 24.04.2024 was issued by the Financial Creditor seeking payment of Rs. 4,82,47,463/- towards default in repayment of Sales Bill Discounting Facility and Rs. 1,90,90,391.91 towards the default in repayment of term loan facility, within 60 days of the date of issue of notice. However, the Corporate Debtor defaulted in meeting its debt obligations, thus, the instant Petition has been filed.

It is stated that even if it is assumed for the sake of argument that the Term Loan Account bearing No. 5004386 does not satisfy the threshold of Rs. 1 Crore, in terms of Section 4 of IBC, 2016, even then the captioned Petition is liable to be admitted since the default in another Sales Bill Discounting Facility Account bearing No.C23001686 is, in itself, above the requisite threshold of Rs. 1 Crore.

It is stated that it is a settled position of law that under Section 7 of the IBC, 2016, the exact quantum of default is not required to be ascertained, as long as the default to the tune of Rs. 1 Crore is established.

This Application has been filed by the Corporate Debtor, Lakhari Resources Private Limited, seeking the following reliefs,

It is stated that the right of the Corporate Debtor to file reply in CP(IB)/157(CHE)/2024, was closed vide order of this Tribunal dated 11.03.2025.

It is stated that it is the intention of the Corporate Debtor to settle the dues owed to the Financial Creditor. The same is evident from the efforts deployed to settle the claim raised by the Financial Creditor. It is stated that the Corporate Debtor has been requesting the Financial Creditor to lend some more time to settle the dues out of the funds raised through sale of some fixed assets.

It is stated that the Corporate Debtor has found a potential buyer for one of its properties i.e., Sri Samraj Health Services Private Limited (CIN: U85100TN2014PTC098055), a company having its registered office at No. 14/2, NGO Colony, Avarapakkam, Villupuram, Tindivanam, Tamil Nadu, India 604001. It is stated that the Company has expressed its interest to buy a commercial unit of the Corporate Debtor located at Raag Durbar Apartments, No.52A, Sterling Road, Nungambakkam, Chennai – 600034 having a built-up area of 2700 sq. feet and a UDS of 1200 sq. feet. The property is within the Chennai Central Joint II limit with an approximate market value of Rs.6,00,00,000 (Rupees Six Crores in Words). The government guideline value of the property is at Rs.15,400 per square feet, totalling to Rs.4,15,80,000/-(Rupees Four Crore Fifteen Lakhs Eighty Thousand in Words).

It is stated that the Prospective Buyer has agreed to purchase the property at Rs.5,50,00,000/- (Rupees Five Crore Fifty Lakhs in words) immediately. It is stated that the Prospective Buyer is creditworthy and financially sound to purchase the property. The Prospective Buyer has been making a profit for the preceding 3 financial years. Further, as per the balance sheet of the Prospective Buyer for financial year ending 31.03.2024, it has a general reserve and surplus of Rs. 4,37,21,765/- crores and a turnover of Rs. 7,77,83,867/-. (An affidavit of the Prospective Buyer is placed at Pgs. 9 – 11, Income Tax Return of the Prospective Buyer for the period ending 31.03.2024 is placed at Pgs. 12 – 18 and a certificate from statutory auditor certifying that the Prospective Buyer has general reserves is placed at Pg 19 of the Application typeset)

It is stated that the Corporate Debtor will be in a position to repay part of the amount in default initially. In the event that some of the property pledged as collateral is released by the Financial Creditor, the Corporate Debtor will initiate the sale proceedings of any one or more properties to repay the balance amount within three months expiring 30.09.2025. It is stated that the liability of the Corporate Debtor towards the Financial Creditor will be cleared in terms of the repayment schedule extracted below,

It is stated that the above repayment plan is logically and practically executable. It is in the interest of the business of the Corporate Debtor and its stakeholders, including the creditors, that the Corporate Debtor continues it business by liquidating some of its assets to repay to the financial creditor.

It is stated that any attempt to declare a moratorium in urgency will impact the Corporate Debtor and its shareholders, and will dilute the intention of the lawmakers.

It is stated that the Hon’ble Supreme Court in the case of Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd. (Civil Appeal No. 9405 OF 2017), has held that IBC is not meant to serve as a “recovery forum” for unpaid dues. It is intended for situations where the corporate debtor is genuinely insolvent or incapable of paying its operational debts. It is stated that in the instant case the Corporate Debtor has resources worth more than the liability due to the financial Creditor.

It is stated that the objective of IBC is to safeguard the overall financial stability of corporations rather than to allow the creditors to employ it as a tool to extract payments, which could disrupt corporate stability. It is stated that any attempt to declare a moratorium by neglecting the intention and actions of the Corporate Debtor to settle the debt of Financial Creditor will be against the purpose and objective of IBC.

It is stated that the Application is a frivolous and a desperate attempt to delay the adjudication of the CP(IB)/157(CHE)/2024.

It is stated that the alleged proposal, in the Interim Application is mere farce since neither the Corporate Debtor nor any of its officers has directly approached the Financial Creditor with such proposal neither prior to or after filing the Application. It is stated that the filing of the Application, with alleged proposal consisting of sale of pledged property reflects the mala fide intent of the Corporate Debtor to avoid the rigours of law and to evade its liability.

It is stated that the filing of the Application and the repayment proposal is a mere dilatory tactic. It is stated that the since the right of the Corporate Debtor to file reply was extinguished, it has filed the captioned Application to delay the adjudicatory process and to evade its liability.

It is stated that a bare perusal of the prayer clause in the Application makes it clear that the Corporate Debtor has sought a positive direction against the Financial Creditor to accept the unilaterally proposed repayment schedule and permit the sale of secured assets to a third party. It is stated that the prayers sought by the Corporate Debtor are beyond the scope of adjudicatory powers of this Tribunal under Section 7 of IBC, 2016.

It is stated that the Hon'ble Supreme Court in the case of E.S. Krishnamurthy v. Bharath Hi-Tecch Builders (P) Ltd., (2022) 3 SCC 161 has held that in terms of Section 7 of the IBC, 2013, the Adjudicating Authority cannot compel a party to the proceedings before it to settle a dispute.

It is stated that relying upon the decision of the Hon’ble Supreme Court in the case of E.S. Krishnamurthy (supra), the Hon'ble NCLAT in the matter of Sanjeev Mahajan versus India Bank (erstwltile Allahabad Bank) (CA(AT)(INS) No. 1440 of 2024, has held that no direction can be issued to a financial creditor to positively grant the benefit of settlement to a Corporate Debtor. Where there is an existence of debt and default, a petition under Section 7 has to be admitted by the Adjudicating Authority, irrespective of whether there is any settlement proposed by the Corporate Debtor.

It is stated that the Corporate Debtor has till date not approached the Financial Creditor with any settlement proposal, nor shown any interest in repayment of the outstanding dues. Further, the alleged proposal is not in accordance with the policies of the Financial Creditor, with respect to settlement of the debt. The repayment schedule, as proposed by the Corporate Debtor, is neither feasible nor viable and will cause grave prejudice to the Financial Creditor. Therefore, the said proposal to clear the outstanding dues is not acceptable to the Financial Creditor.

It is stated that it is a clear case of debt and default on the part of the Corporate Debtor, demonstrating its inability to repay the debt owed to the Financial Creditor. Therefore, the Financial Creditor is well within its rights to seek initiation of the Corporate Insolvency Resolution Process of the Corporate Debtor.

We have heard Ld. Counsel for the parties and perused the record.

The Petitioner/ Financial Creditor, Unity Small Finance Bank Limited, has filed CP(IB)/157(CHE)/2024 petition under Section 7 of Insolvency and Bankruptcy Code, 2016 (IBC, 2016) seeking to initiate Corporate Insolvency Resolution Process against the Corporate Debtor (Lakhari Resources Private Limited). Since the right of the Corporate Debtor to file reply was closed vide order of this Tribunal dated 11.03.2025 during the course of the proceeding in CP(IB)/157(CHE)/2024, Corporate Debtor has filed IA(IBC)/873(CHE)/2025 seeking approval of a repayment plan for settlement of debts due to the Financial Creditor. Per contra, the Financial Creditor has submitted that the proposal of the Corporate Debtor is neither concrete nor feasible, and does not constitute a binding settlement proposal covering the admitted debt. It is contended that the statutory ingredients under Section 7 of IBC, 2016 i.e., existence of financial debt, disbursement, and default have been established, therefore, the CP(IB)/157(CHE)/2024 is liable to be admitted.

The issue for consideration that lies before this Tribunal is:

Whether a petition filed under Section 7 of IBC, 2016 may be rejected on the ground of settlement /repayment plan proposed by the Corporate Debtor?

This Tribunal refers to Section 7(5) which deals with the factors to be considered by this Tribunal while considering a petition under Section 7 of IBC, 2016. Section 7(5) of IBC reads as under:

The Hon’ble Supreme Court of India in the case of Innoventive Industries Ltd vs ICICI Bank (Civil Appeal Nos. 8337-8338 of 2017), has held as below,

In terms of Section 7(5) of IBC, 2016 and the decision of the Hon’ble Supreme Court in the case of Innoventive Industries Ltd (supra), it is clear that while considering a petition under Section 7 of IBC, 2016, the Adjudicating Authority’s scope of enquiry is confined to whether there is a ‘debt’ which is due and payable under law and; whether the default is more than Rupees One Lakh (now Rupees One Crore). The moment the default amount exceeds Rupees One Crore; the Adjudicating Authority/ Tribunal is required to initiate Corporate Insolvency Resolution Process against the Corporate Debtor.

The scope of powers vested upon this Tribunal under Section 7(5) of IBC, 2016 was further explained by the Hon’ble Supreme Court in the case of E S Krishnamurthy and Ors. v. Bharath Hi Tech Builders Pvt. Ltd. (Civil Appeal No. 3325 of 2020). It was held that Section 7(5) of IBC, 2016, prescribes only two courses for the Adjudicating Authority. The Tribunal can admit the application if debt and default are established and the application is complete. Alternatively, the Tribunal is at liberty to reject the application if debt and default are not established, the application is incomplete, or the proposed Resolution Professional is facing disciplinary proceedings before the IBBI. It was made clear by the Hon’ble Supreme Court that the Adjudicating Authority/ Tribunal has no power to defer admission of a Section 7 petition, direct settlement of the debt, or otherwise compel parties to explore repayment terms even before admission of the petition i.e., at the pre-CIRP stage. The relevant paragraphs are extracted hereunder,

Subsequent to the decision of the Hon’ble Supreme Court in the case if E S Krishnamurthy and Ors (Supra), the legislative intent behind the usage of the word ‘may’ in Section 7(5) of IBC, 2016 was discussed by the Hon’ble Supreme Court in the Vidarbha Industries Power Ltd. v. Axis Bank Ltd. (Civil Appeal No. 4633 of 2021). The Court recognised that the word “may” in Section 7(5)(a) confers discretion on the Tribunal to either admit or reject an application filed under Section 7 of IBC, 2016. The relevant paragraphs are extracted hereunder,

The Hon’ble Supreme Court in the Vidarbha Industries Power Ltd (supra), has however disclaimed that the discretionary power vested on this Tribunal under Section 7 must be used sparingly based on the facts and circumstances of the case. The relevant paragraphs are extracted hereunder,

The decision of the Hon’ble Supreme Court in the above case was reviewed in the case of Axis Bank Limited v. Vidarbha Industries Power Limited Review Petition [(Civil) No. 1043 of 2022 in Civil Appeal No. 4633 of 2021] wherein it was clarified that the discretion vested on the Tribunal under Section 7(5)(a) is context-specific and cannot be read to dilute the binding ratio of Innoventive Industries Ltd (supra) and E S Krishnamurthy and Ors (Supra). The Vidarbha Industries Review Order, reaffirmed that the scope of adjudication under Section 7 of IBC, 2016, is binary i.e., either admission or rejection, based on the satisfaction of debt and default. The Hon’ble Supreme Court in the case of M. Suresh Kumar Reddy v. Canara Bank & Ors. (Civil Appeal No. 7121 of 2022) reiterated that the decision in Vidarbha Industries Power Ltd (supra) must be read narrowly in the context of that case alone. The relevant paragraphs from the case of Vidarbha Industries Review Order, is extracted hereunder,

The Hon’ble NCLAT in the case of Drip Capital Inc. v. Concord Creations (India) P. Ltd. (Company Appeal (AT)(CH) (Ins.) No. 167 of 2021) has held that factors like solvency, profitability, or temporary financial stress is irrelevant at the admission stage and the Financial Creditor, at the pre-CIRP stage, cannot be forced to explore the option of settlement with the Corporate Debtor on the grounds of such factors. The relevant paragraphs are extracted hereunder,

Hence, the current position of law is that while there exists some level of discretion vested on the Adjudicating Authority under Section 7(5)(a), the same must be exercised cautiously. Such discretionary power cannot be used to impel the financial creditor to consider the settlement proposed by the Corporate Debtor.

In IA(IBC)/873(CHE)/2025, the Corporate Debtor has made assertions about repayment of the defaulted debt by selling the properties attached by the Financial Creditor. The Corporate Debtor has placed on record an Affidavit by the Prospective Buyer, Income Tax Return of the Prospective Buyer as well as a certificate issued by a Chartered Accountant on the usage of General Reserves for purchase of the property of the Corporate Debtor. However, the Financial Creditor has found the proposal made by the Corporate Debtor not feasible or viable. Hence, in view of decision of the Hon’ble Supreme Court in the case of Innoventive Industries Ltd (supra) and E S Krishnamurthy and Ors (Supra), the proposed settlement cannot be made binding on the Financial Creditor. Moreover, in terms of the decision of the Hon’ble NCLAT in the case of Drip Capital Inc. (supra), the financial status of the Corporate Debtor cannot be a ground for rejection of CP(IB)/157(CHE)/2024.

In the light of the discussion made above, the application IA(IBC)/873(CHE)/2025 is dismissed.

This Tribunal now considers whether CP(IB)/157(CHE)/2024 is admissible in terms of Section 7 of IBC, 2016 and the tenets laid down in Innoventive Industries Ltd (supra).

It is seen that the Corporate Debtor has availed sales bills discounting facilities from the Financial Creditor vide Sales Bills Discounting Agreement dated 30.09.2023. As per Schedule I Part B of the Agreement dated 30.09.2023, the sanction limit of the facility is up to Rs. 5,00,00,000/- at the rate of 13% per annum. The Financial Creditor, vide Supplemental Facility Agreement dated 23.01.2024 provided additional Adhoc limit to the tune of Rs.50,00,000/- subject to invoice discounting charges of 13.50% per annum. (The Sales Bills Discounting Agreement dated 30.09.2023 is placed at Pg. Nos. 83-109 and the Supplemental Sales Bills Discounting Agreement dated 23.01.2024 is placed at Pg. Nos. 110-116 of the petition typeset)

The Corporate Debtor has also availed term loan facilities to the extent of Rs. 2,00,00,000 at an interest rate of 14.5% per annum from the Financial Creditor vide Term Loan Agreement dated 17.08.2022. (The Term Loan Agreement dated 17.08.2022 is placed at Pg. Nos. 59-82 of the petition typeset)

The Petitioner has placed the Record of Financial Information in Form C submitted to the NeSL pertaining to the sales bills discounting facility of Rs. 5,50,00,000/- and the term loan facility of Rs. 2,00,00,000/-, as proof of financial debt extended by it to the Corporate Debtor. (The record of financial information pertaining to the sales bill discounting facility and the term loan facility is annexed and marked as Annexure A-10 of the petition typeset)

It is the submission of the Financial Creditor that disbursement pertaining to the Sales Bills Discounting Facility were made on 30.09.2023 and 23.01.2024 for an amount of Rs. 5,50,00,000/-. The Financial Creditor has also disbursed a Term Loan facility of Rs. 2,00,00,000/-

As proof of disbursement of the term loan, the Financial Creditor has placed the Statement of Account of the Corporate Debtor pertaining to the Term Loan Account bearing Reference No. 5004386 for the period between 26.08.2022 to 25.04.2024. On perusal of the Statement of Accounts it is seen that an amount of Rs. 2,00,00,000 has been disbursed to the Corporate Debtor across various dates i.e., 27.08.2022, 19.10.2022 and on 18.11.2022. The details of the loan disbursal made is tabulated below:

(The Statement of Accounts is placed at Pg. Nos. 54-58 of the Petition Typeset)

The Financial Creditor has also placed on record the Statement of Accounts pertaining to the Sales Bills Discounting Facility bearing Customer Code C23001686 for the period from 01.05.2023 to 24.04.2024 as proof of disbursement of the facility. On perusal of the Statement of Accounts, it is seen that an amount of Rs. 4,74,69,230/- was utilized by the Corporate Debtor out of the total limit of Rs. 5,00,00,000. (The Statement of Accounts is placed at Pg. Nos. 35-53 of the Petition Typeset)

As per the Statement of Accounts pertaining to Statement of Accounts for the Sales Bills Discounting Facility, it is seen that the Corporate Debtor has made the last payment of instalment on 20.01.2024 of a sum of Rs. 25,00,122/- subsequent to which the Account remained irregular. It is seen that as on 31.03.2024, an amount of Rs. 4,82,47,463/-was payable by the Corporate Debtor to the Financial Creditor. The amount payable comprises of principal, interest as well as additional penalty imposed for default in compliance with the terms stipulated in the Sales Bills Discounting Agreement dated 30.09.2023 and the Supplemental Facility Agreement dated 23.01.2024.

The Financial Creditor has also submitted the NeSL record of default in Form D pertaining to the Sales Bill Discounting Facility reflecting a default of Rs. 4,82,47,463/-. The status of authentication in the RoD reflects as “authenticated”.

Due to the failure of the Corporate Debtor to comply with the repayment terms of the Sales Bills Discounting Facility, the Financial Creditor issued Loan Recall Notice dated 18.04.2024 seeking repayment of the entire outstanding amounts as on 16.04.2024 of Rs. 4,82,47,463.00 (Rupees Four Crore Eighty-Two Lakh Forty-Seven Thousand Four Hundred Sixty-Three Only) pending in the account of the Sales Bill Discounting Facility within seven days from the date of notice. (The Recall notice dated 18.04.2024 is annexed and marked as Annexure A-7 of the petition typeset)

The Sales Bills Discounting Facility Account bearing Reference No. C23001686 was classified as NPA on 20.04.2025. In compliance with the Master Circular on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances issued by Reserve Bank of India (RBI), the NPA classification has to be done borrower-wise and not asset-wise. Accordingly, the Term Loan Account bearing Account No. 5004386 was also classified as NPA on 20.04.2024.

The Corporate Debtor did not repay the outstanding amounts in terms of the Loan Recall Notice dated 18.04.2024, hence, the Financial Creditor issued notice dated 24.04.2024 under Section 13(2) of SARFAESI Act, 2002 for enforcing security interest provided by the Corporate Debtor for the default committed under Sales Bills Discounting Facility Agreement and Term Loan Agreement. The details of the outstanding facilities sought to be enforced by way of SARFAESI notice are extracted below,

The Financial Creditor has also placed on record the Statement of Account of the Term Loan for the period from 26.08.2022 to 15.04.2025. As per the payment schedule for the Term Loan Facility, the Corporate Debtor was obliged to repay the term loan in monthly instalments from 04.09.2022 to 04.12.2032. However, the Corporate Debtor has been irregular in complying with the repayment schedule since the 19^th Instalment which fell due on 04.04.2024. It has been repeatedly incurring penalties for such non-compliance. (The Statement of Accounts pertaining to the Term Loan Account for the period between 26.08.2022 to 15.04.2025 is annexed as Annexure A-II of the Affidavit typeset)

In view of the facts as stated supra and also in view of the ‘financial debt’ which is proved by the Financial Creditor and the ‘default’ having been committed on the part of the Corporate Debtor, this Tribunal admits the present petition and initiates the Corporate Insolvency Resolution Process in relation to the Corporate Debtor viz., Lakhari Resources Private Limited.

The Financial Creditor has proposed the name Mr. Jitender Kothari with Registration Number: IBBI/IPA-001/IP-P00540/2017-2018/10965, (email- [email protected]) as the Interim Resolution Professional (IRP) who has also filed his consent in Form – 2 and also upon verification from the IBBI website, it is seen that the Authorization for Assignment is granted to the IRP till 31.12.2025. We therefore appoint Mr. Jitender Kothari as the IRP. The proposed IRP who is appointed shall take forward the process of Corporate Insolvency Resolution of the Corporate Debtor. The IRP appointed shall take in this regard such other and further steps as are required under the Statute, more specifically in terms of Section 15,17,18 of the Code and file his report within 20 days before this Tribunal. The powers of the Board of Directors of the Corporate Debtor shall stand superseded as a consequence of the initiation of the CIRP in relation to the Corporate Debtor in terms of the provisions of IBC, 2016. (The consent of the Interim Resolution Professional in Form 2 is annexed as Annexure A-4 of the Petition typeset)

The Financial Creditor is directed to pay a sum of Rs. 3,00,000/-(Rupees Three Lakhs Only) to the Interim Resolution Professional to meet out the expenses and to perform the functions assigned to him in accordance to Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

As a consequence of the Petition being admitted in terms of Section 7 of the Code, the moratorium as envisaged under the provisions of Section 14(1) and as extracted hereunder shall follow in relation to the Corporate Debtor:

However, during the pendency of the moratorium period in terms of Section 14(2) (2A) and 14(3) as extracted hereunder:

The duration of the period of moratorium shall be as provided in Section 14(4) of the Code and for ready reference reproduced as follows:

Based on the above terms, the CP(IB)/157(CHE)/2024 stands admitted in terms of Section 7 (5) of IBC, 2016 and the moratorium shall come in to effect as of this date. A copy of the Order shall be communicated to the Financial Creditor as well as to the Corporate Debtor above named by the Registry. In addition, a copy of the Order shall also be forwarded to IBBI for its records. Further, the Interim Resolution Professional above named who is figuring in the list of Resolution Professionals forwarded by IBBI be also furnished with copy of this Order forthwith by the Registry, who will also communicate the initiation of the CIRP in relation to the Corporate Debtor to the Registrar of Companies concerned.