Technical Objections Cannot Defeat CIRP Once Debt and Default are Established: NCLT Admits ₹39.19 Cr Insolvency Plea Against Millenium Starch [Read Order]
NCLT Bengaluru Bench holds that procedural defects and solvency claims cannot override established financial debt and default under Section 7 of IBC
![Technical Objections Cannot Defeat CIRP Once Debt and Default are Established: NCLT Admits ₹39.19 Cr Insolvency Plea Against Millenium Starch [Read Order]](https://images.taxscan.in/h-upload/2026/05/04/2135434-technical-objections-cannot-defeat-cirp-once-debt-and-default-are-establishedjpg.webp "Technical Objections Cannot Defeat CIRP Once Debt and Default are Established: NCLT Admits ₹39.19 Cr Insolvency Plea Against Millenium Starch [Read Order]")
The National Company Law Tribunal has admitted insolvency proceedings against Millenium Starch India Private Limited on a petition filed by Axis Bank Limited holding that technical objections cannot defeat a Corporate Insolvency Resolution Process (CIRP) once the existence of financial debt and default is established. The facts stated that Axis Bank had approved loan facilities...
The National Company Law Tribunal has admitted insolvency proceedings against Millenium Starch India Private Limited on a petition filed by Axis Bank Limited holding that technical objections cannot defeat a Corporate Insolvency Resolution Process (CIRP) once the existence of financial debt and default is established.
The facts stated that Axis Bank had approved loan facilities up to the value of ₹40 crore in favor of Millenium Starch under a scheme of multiple banking on May 31, 2022 which included an open cash credit facility of ₹25 crore and term loan facilities of ₹15 crore each. The borrower had entered into various loan documents such as hypothecation deed, guarantee deed and deposit memorandum of title deed.
However, the corporate debtor failed to service the debt, resulting in default on February 28, 2024 and classification of the account as a Non-Performing Asset (NPA) on May 31, 2024.Further, the Axis Bank thereafter issued recall notices and initiated SARFAESI proceedings but the dues remained unpaid prompting the insolvency petition.
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The corporate debtor opposed the plea contending that the petition suffered from procedural defects including alleged non-compliance with Rule 4(3) of the Insolvency Rules, defective Bankers’ Books certificates, absence of complete NeSL records and lack of proper board authorisation. It further argued that it remained solvent and had made substantial repayments of ₹3.58 crore
The Tribunal held that Axis Bank had satisfactorily established both debt and default, the Tribunal admitted Millenium Starch into Corporate Insolvency Resolution Processes declared moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 and appointed Rahul Sudhakar Kavathekar as the Interim Resolution Professional to take charge of the corporate debtor’s affairs.
The bench comprising Sunil Kumar Aggarwal and Radhakrishna Sreepada admitted the Corporate Insolvency Resolution application after finding that the corporate debtor had defaulted on repayment of financial facilities aggregating ₹39.19 crore.
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