Acknowledgments and Part‑Payments Extend Statutory Filing Period: NCLT Initiates CIRP Under Sec. 7 IBC for ₹16.53 Cr Outstanding [Read Order]

In a recent ruling, the National Company Law Tribunal (NCLT), Cuttack Bench, admitted a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by a financial creditor against the corporate debtor for a default of ₹16.53 crore arising from a loan agreement dated 30 September 2020.

Financial creditor, In2IT Systems & Services Pvt. Ltd. (formerly Alpha Codes IT Solutions Pvt. Ltd.) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against In2IT Technologies Pvt. Ltd.

The dispute arose from a loan agreement dated 30 September 2020, under which the creditor extended a facility of ₹15 crore to meet the debtor’s liquidity and vendor obligations. The loan carried interest at 18% per annum. As of 12 January 2026, the outstanding stood at ₹16.53 crore, comprising ₹11.04 crore principal and ₹5.49 crore interest. The default date was recorded as 18 November 2025.

The financial creditor argued that the disbursements made under the loan agreement constituted “financial debt” under Section 5(8) IBC. It produced payment request letters, bank statements, and ledger extracts to show that funds were disbursed and utilized by the debtor.

The Corporate creditor stated that the debtor had acknowledged liability in multiple communications dated 01 July 2023, 20 June 2024, 11 April 2025, and 02 July 2025. It also pointed to part‑payments, including ₹1.20 crore between July and August 2025, which extended limitation under Sections 18 and 19 of the Limitation Act.

The debtor contended that it had been servicing dues and pointed to payments of ₹1.20 crore made in July–August 2025. It argued that there was no willful or continuous default, only temporary liquidity constraints. The debtor also proposed a settlement of ₹2.5 crore in February 2026, which was rejected by the creditor.

It claimed that insolvency proceedings were being misused as a debt recovery mechanism and insisted that its financial difficulties were short‑term, not reflective of insolvency. The debtor requested time to stabilize cash flows and regularize payments rather than being subjected to CIRP.

The tribunal held that the loan agreement and disbursements clearly constituted financial debt. It found that substantial amounts remained unpaid beyond contractual repayment dates, establishing default. Part‑payments and written acknowledgments extended limitation, making the petition timely.

The bench comprising judicial member Cheekati Radha Krishna and technical member Banwari Lal Meena rejected the debtor’s argument that temporary liquidity issues should prevent insolvency, noting that once debt and default are proven, viability is not examined under Section 7 IBC. The settlement proposal itself was seen as evidence of subsisting liability. Relying on precedents such as Dena Bank v. C. Shivakumar Reddy and Koncentric Investments v. Standard Chartered Bank, the tribunal concluded that the petition satisfied statutory requirements.

The NCLT admitted the petition under Section 7 IBC and initiated CIRP against In2IT Technologies Pvt. Ltd. A moratorium under Section 14 IBC was declared, prohibiting suits, recovery actions, and asset transfers during the insolvency process.

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