NCLT Admits Rs 2,888 Cr Insolvency Petition by Canara Bank Against Gupta Power Infrastructure, Appoints IRP [Read Order]
The Tribunal directed the financial creditors to pay ₹5 lakh to the IRP as advance fees while admitting the petition.
![NCLT Admits Rs 2,888 Cr Insolvency Petition by Canara Bank Against Gupta Power Infrastructure, Appoints IRP [Read Order]](https://images.taxscan.in/h-upload/2025/10/03/2093563-nclt-insolvency.webp "NCLT Admits Rs 2,888 Cr Insolvency Petition by Canara Bank Against Gupta Power Infrastructure, Appoints IRP [Read Order]")
The National Company Law Tribunal (NCLT) Kolkata bench admitted Rs 2,888 Cr Insolvency petition by Canara Bank against Gupta Power Infrastructure, holding that when a financial creditor consortium establishes a valid default exceeding the threshold limit under Section 4 of the IBC, supported by proper authorization and undisputed evidence of debt, the Adjudicating Authority is bound to admit the Section 7 petition and initiate the Corporate Insolvency Resolution Process (CIRP).
The present petition was filed by Canara Bank Ltd. & Ors. (a consortium of 10 financial creditors) under Section 7 of the IBC, seeking CIRP against Gupta Power Infrastructure Ltd. for a claimed default of ₹2,888.11 crore as of December 20, 2023. The consortium had sanctioned working capital facilities totaling ₹3,590 crore (revised from ₹255 crore in 2006) and an additional COVID-19 relief loan of ₹78.56 crore, secured through a Joint Deed of Hypothecation dated August 26, 2022.
The debtor defaulted from January 2023 onwards, with accounts classified as NPAs in August-September 2023. Despite an Inter-Creditor Agreement and rectification attempts, the debtor admitted defaults and failed to provide a viable resolution plan, leading to loan recall notices and SARFAESI action.
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The petitioners produced Power of Attorney authorizing Canara Bank as Lead Bank, consortium meeting minutes recording the debtor's admissions of default, NESL Certificates, CRILC reports, and NPA Certificates. The corporate debtor challenged maintainability citing inadequate authorization, alleged suppression of facts, limitation bar under Section 10A IBC, and illegal NPA classification. It further contended that lenders' own breaches caused financial distress.
The Bench of Smt. Bidisha Banerjee, Member (Judicial) and Cmde. Siddharth Mishra, Member (Technical) examined the provisions of Section 7 and relied on Supreme Court precedents including Rajendra Narottamdas Sheth v. Chandra Prakash Jain (2022) 5 SCC 600, Pioneer Urban Land (2019) 8 SCC 416, and Innoventive Industries Ltd. (2018) 1 SCC 407.
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The Tribunal held that the Power of Attorney constituted valid authorization under IBC, the debt far exceeded the ₹1 crore threshold, and defaults occurred outside the Section 10A exclusion period. It emphasized that the existence of "financial debt" (disbursal against time value of money) and "default" were conclusively established through documentary evidence, making the debt "due and payable" despite the debtor's disputes.
Accordingly, the Tribunal admitted the petition, initiated CIRP, and appointed Mr. Pradeep Kumar Kabra as Interim Resolution Professional with requisite directions including public announcement, document handover, and police assistance if needed. The NCLT imposed a moratorium under Section 14, prohibiting legal proceedings, asset transfers, and recovery actions. Additionally, the Tribunal directed the financial creditors to pay ₹5 lakh to the IRP as advance fees while admitting the petition.
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