Corporate Debtor Desai Agrifoods Faces CIRP Over ₹1.14 Cr Loan Default: NCLT Holds Sec. 7 Petition Within Limitation [Read Order]

In a recent ruling, the National Company Law Tribunal (NCLT), Ahmedabad Bench, has admitted a Section 7 petition filed against Desai Agrifoods Pvt. Ltd., holding that the plea was filed within the limitation and supported by clear evidence of financial debt and default. Also found that the corporate debtor had failed to repay a ₹1.14 crore loan extended under a 2024 agreement.

The financial creditor, Team India Managers Ltd., had advanced a loan of ₹1 crore to Desai Agrifoods Pvt. Ltd. under a loan agreement dated 01 October 2024, carrying 12 % annual interest. The amount was disbursed on 08 November 2024, and the debtor paid only ₹1.56 lakh interest in January 2025.

By April 2025, the debtor admitted financial difficulties through email and expressed an inability to repay. Subsequent demand notices in August 2025 went unanswered, leading the creditor to file the insolvency petition on 18 December 2025.

Team India Managers Ltd. contended that the loan qualifies as a financial debt under Section 5(8) IBC and that default was proven through bank statements, ledger accounts, and email acknowledgements. The petition, it argued, was not for recovery but for resolution under the Code.

On the other hand, corporate debtor Desai Agrifoods Pvt. Ltd. argued that the petition was not maintainable, claiming that IBC cannot be invoked for recovery of dues. It maintained that the company was operational, arranging funds, and intended to repay. It also disputed the alleged default date and quantum of debt.

The creditor countered that the debtor had produced no evidence to disprove the debt or default. Admissions of financial stress, it said, confirmed inability to pay, and the petition met all statutory requirements under Section 7.

The Bench comprising  Shammi Khan  (Judicial Member) and  Sanjeev Sharma  (Technical Member)held that the loan and its transfer through banking channels were supported by documentary proof, establishing the existence of financial debt.

The tribunal noted that the date of default (12 September 2025) was substantiated by communications and ledger entries, and the petition filed on 18 December 2025 was within the limitation, extended by acknowledgement under Section 18 of the Limitation Act.

NCLT also observed that the audited financial statements showing losses and negative equity further confirmed the debtor’s financial distress.

The tribunal admitted the petition and directed initiation of the Corporate Insolvency Resolution Process (CIRP) against Desai Agrifoods Pvt. Ltd. The tribunal declared a moratorium under Section 14 of the Insolvency and Bankruptcy Code, prohibiting all suits, recoveries, and transfers of assets during the process.

The financial creditor, Team India Managers Ltd., was directed to deposit ₹3 lakh toward initial CIRP expenses, while the Registrar of Companies was asked to update the company’s status on the MCA portal as “under CIRP.”

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