NCLT Admits Application for CIRP by SBI against Corporate Debtor for Providing financial assistance of Rs.25.75 Cr [Read Order]

The Petition is filed by the Applicant- State Bank of India ( "Financial Creditor") against the Respondent- Raninga Paper Mills Private Limited ( "Corporate Debtor") under Section 7 of the Insolvency and Bankruptcy Code, 2016 ( "IBC, 2016") read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 ( "1B (AAA) Rules, 2016") for initiation of Corporate Insolvency Resolution Process (CIRP), to appoint Interim Resolution Professional ( "IRP") and declare the moratorium for having defaulted in payment of the outstanding Financial Debt of Rs.28,12,30,051.61ps. including interest. The date of default was stated to be 30.06.2024.

Practical Case Studies in Forensic Accounting & Corporate Fraud Investigation Click Here

The Applicant/Financial Creditor is State Bank of India, a body corporate constituted under the State Bank of India Act, 1955, having its Corporate Office at Madam Cama Marg, Mumbai, and the branch handling the debt is the Stressed Assets Management Branch (SAM Branch). The authorized person to submit the application is Shri Kumar B Rajesh,AGM & CLO, with address at Stressed Assets Management Branch (SAM Branch), 4th Floor, SBI Building, Lal Darwaza, Ahmedabad 380001, supported by an authorization letter dated 11.07.2025 annexed as Annexure-NI.

The Respondent/Corporate Debtor is Raninga Paper Mills Private Limited, bearing CIN U21000GJ2018PTC103279, incorporated on 16.07.2018, with nominal share capital and paid-up share capital of Rs.8,35,00,000/- each, and guarantee clause as per Memorandum of Association. The registered office is at GF 38, Neel Kanth Paradise, Nr. Galaxy Cinema, Naroda, Ahmedabad, Gujarat382440 as per the Master Data available on the website of the Ministry of Corporate Affairs which is annexed with the Petition as Annexure A/2.

The Financial Creditor has proposed the name of Jigar Tarunkumar Bhatt under section 13 (l)(c) of the Code to act as Interim Resolution Professional (IRP). He has filed his written communication Form-2 along-with Form-B being AFA as well as Certificate of registration, which is annexed with the Petition as per the requirement of Rule 9(l) of the Insolvency and Bankruptcy (AAA) Rules, 2016. No disciplinary proceedings are pending against the proposed IRP, as confirmed in Form-2.The AFA of the proposed IRP is valid up to 31 .12.2025.

The Corporate Debtor requests the Adjudicating Authority to pass appropriate orders for the admission of the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor.

It was found that the Applicant/Financial Creditor had provided financial assistance of Rs.25.75 Crore to the Corporate Debtor. Admittedly, the Corporate Debtor defaulted its repayment; and as on 07.04.2025, an outstanding amount remained payable to the Applicant/Financial Creditor.

The Tribunal found that the Financial Creditor has discharged its burden of proof under Section 7 of the Code by demonstrating the existence of a financial debt and default in payment of the financial debt by the Corporate Debtor. The outstanding financial debt is of more than rupees one crore, which meets the threshold limit as per section 4 of the Code and is well within the limitation for filing the present Petition, which is supported by comprehensive documentation.

Step by Step Guide of Preparing Company Balance Sheet and Profit & Loss Account Click Here

A two member bench of Shammi Khan, Member (Judicial) and Sanjeev Sharma, Member (Technical) found that the Financial Creditor is entitled to the relief as sought. The Corporate Debtor's default, acknowledgment of the financial obligations while seeking resolution through the CIRP mechanism under the Insolvency and Bankruptcy Code, justifies the admission of the petition and the initiation of CIRP under the Code.

The Tribunal admitted the application filed under section 7(2) of the Insolvency and Bankruptcy Code for initiation of the corporate insolvency resolution process against (CIRP) the Respondent/Corporate Debtor.

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