Relief for BOI: NCLT Admits Section 7 Plea under IBC after Finding Corporate Debtor in Default of ₹153.98 Crore [Read Order]
A moratorium under Section 14 was declared, and directions were issued for public announcement and deposit of initial CIRP expenses.
The Delhi Bench of National Company Law Tribunal ( NCLT ) admitted a Section 7 application filed by Bank of India under the Insolvency and Bankruptcy Code, 2016, after finding the corporate debtor in default of ₹153.98 crore.
Bank of India,applicant-financial creditor, filed a Company Application under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate CIRP against TDT Copper Limited,corporate debtor. The application was filed through its authorised representative, Mr. Manoj Kumar Gupta.
The corporate debtor was incorporated on 17.11.1993 under the Companies Act, 1956, and had its registered office at Tolstoy House, Connaught Place, New Delhi, falling under the jurisdiction of this Bench. Its authorised share capital was ₹82 crore, and the paid-up capital was ₹81.85 crore.
The application, filed on 19.03.2025, stated that the corporate debtor had defaulted in repaying ₹153.98 crore as of 25.01.2019.
The applicant counsel stated that the applicant had sanctioned a working capital limit of ₹40 crore to the corporate debtor on 07.06.2010. In 2011, a consortium of lenders was formed, and a Working Capital Consortium Agreement was signed on 25.01.2011.
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The applicant later enhanced the limits to ₹62 crore on 31.10.2011 and to ₹81 crore on 08.05.2013. Dena Bank (now Bank of Baroda) acted as the lead bank under a revised consortium agreement dated 12.10.2013.
The corporate debtor later sought an ad-hoc limit for LoU/Buyers Credit, and the applicant sanctioned ₹10 crore on 20.11.2013 for 120 days. The facilities were again reviewed on 08.02.2018. These loans were secured by personal guarantees of Shri Avinash Ladha and Shri Laxman Das Ladha, and corporate guarantees from M/s Madura Spinning and Manufacturing Limited and M/s Sivog Marketing Private Limited.
The account was overdrawn on 25.01.2019, marking the default date. Due to non-repayment, the account was classified as NPA on 30.04.2019. A notice under Section 13(2) of the SARFAESI Act, 2002, was issued on 12.02.2020.
The applicant also filed OA No. 133/2021 before the Debts Recovery Tribunal-II, which was pending. The secured property at Bawal, Rewari, was auctioned on 16.01.2024 for ₹61.01 crore, and the proceeds were distributed among the lenders, including the applicant.
As of 15.02.2025, the total outstanding debt was ₹153.98 crore, including uncharged and penal interest. The corporate debtor had acknowledged the debt in its financial statements for 2019-2020 and 2020-2021 and submitted an OTS proposal on 23.01.2024, which was rejected by the lenders on 29.01.2024.
The Adjudicating Authority, through order dated 01.04.2025, directed the applicant to serve notice to the respondent. Despite service through email, speed post, and later by publication, no one appeared on behalf of the corporate debtor on the listed dates. Hence, the corporate debtor was set ex-parte vide order dated 02.09.2025.
The two member bench comprising Mahendra Khandelwal (Judicial Member) and Anu Jagmohan Singh (Technical Member) heard the counsels for the financial creditor and reviewed the petition. Since the registered office of the corporate debtor was in Delhi, the Tribunal had jurisdiction to decide the matter under Section 7 of the Insolvency and Bankruptcy Code.
It noted that the applicant had sanctioned working capital limits to the corporate debtor, starting with ₹40 crore on 07.06.2010, which were later enhanced. The documents and financial statements confirmed that a financial debt existed. The account was overdrawn on 25.01.2019 and classified as a Non-Performing Asset on 30.04.2019.
A notice under Section 13(2) of the SARFAESI Act was issued on 12.02.2020. The corporate debtor’s financial statements and its OTS proposal dated 23.01.2024 showed acknowledgment of the debt, keeping the petition within limitation.
Referring to the Supreme Court’s decision in Innoventive Industries Ltd. v. ICICI Bank, the tribunal held that once default was established, there was no discretion to reject the application. The petition was found complete, and the default amount of ₹153.98 crore exceeded the statutory threshold.
Accordingly, the tribunal admitted the petition filed by Bank of India and initiated CIRP against TDT Copper Limited. Mr. Shailesh Chandra Ojha was appointed as Interim Resolution Professional (IRP) and directed to submit consent in Form-2 with required documents within five days.
A moratorium under Section 14 was declared, restricting legal proceedings, transfer of assets, enforcement of security interests, and recovery of property. The tribunal also directed the IRP to make a public announcement within three days and the financial creditor to deposit ₹2 lakh towards initial CIRP expenses.
The IRP was instructed to carry out his duties under the Code and ensure cooperation from the corporate debtor’s management. Copies of the order were sent to the parties, IBBI, and ROC for compliance.
Thus, the application under Section 7 of the Code, was admitted.
