₹3.62 Crore Loan Default Triggers Insolvency: NCLT Rejects Objections On Stamping and NeSL Record [Read Order]

In a recent ruling, the National Company Law Tribunal (NCLT), Mumbai Bench, admitted a company into the Corporate Insolvency Resolution Process (CIRP) over a ₹3.62 crore loan default, rejecting objections related to stamping, NeSL authentication, and default date inconsistencies.

The application was filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, by a financial creditor who had disbursed ₹2.95 crore between July 2021 and March 2022 to support the company’s working capital needs. The loan carried 8% annual interest and was backed by a corporate guarantee and a demand promissory note.

The applicant, R. K. Purushothaman, stated that the loan of ₹2.95 crore was disbursed under a written agreement dated 09.09.2020, supported by a corporate guarantee and a demand promissory note, and that interest at 8% per annum was agreed.

They also attached documents such as Bank statements, ledger entries, and the debtor’s own financial statements, which corroborated the debt.

He also clarified that default information had been lodged with NeSL but authentication was awaited. It argued that NeSL records are directory, not mandatory, citing tribunal and appellate rulings that insolvency petitions can be admitted on other evidence of default.

On the other hand, the company argued that the loan agreement relied upon by the applicant was neither notarised nor stamped, and therefore could not be treated as valid evidence of debt. The respondent contended that the applicant failed to submit a proper, authenticated NeSL (National E-Governance Services Ltd.) record of default, and had only attached an email, not a certified report.

The respondent denied creating any mortgage or security in favour of the applicant, implying that the claim lacked enforceable backing.

After hearing the submissions, the tribunal held that the debt and default were clearly established through multiple documents, including bank statements, ledger entries, financial disclosures, and the demand notice dated 19 September 2024.

The bench of Sameer Kakar (technical member )and Nilesh sharma (judicial member ) observed that “Even assuming, arguendo, that the Loan Agreement is insufficiently stamped, the claim stands fully corroborated by other admissible evidence”

The tribunal also clarified that NeSL authentication is not mandatory, citing precedents from NCLAT and its own coordinate benches. It upheld the default date of 04 October 2024 as legally sustainable, noting that the debt became due upon expiry of the demand period.

Further, it dismissed allegations of misuse of insolvency proceedings, stating that no material evidence was placed to support such claims.

accordingly , the company was admitted into CIRP, a moratorium was imposed under Section 14 of the IBC, and Mr. Sabbani Maruthi was appointed as Interim Resolution Professional (IRP). The financial creditor was directed to deposit ₹3 lakh to cover initial CIRP costs.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates