Mumbai: NCLT Admits Central Bank’s Insolvency Plea Against Rama Agro Foods Over ₹27.29-Crore Default

Mumbai, September 2, 2026: The Mumbai bench of the National Company Law Tribunal (NCLT) has admitted a plea filed by Central Bank of India to initiate insolvency proceedings against Pune-based Rama Agro Foods Pvt Ltd, which had stood as a corporate guarantor for a loan extended to a sugar company, Shri Gajanan Maharaj Sugar Limited, Malkapur.

Bank Claims Rs 27.29-Crore Default

The bank had claimed a total default of Rs 27.29 crore, comprising Rs 27,29,61,728.78, in connection with financial facilities extended to the principal borrower, Shri Gajanan Maharaj Sugar Ltd, formerly known as Utech Sugar Ltd.

The tribunal, however, clarified that it was not quantifying the exact amount of default at the admission stage and said the amount would be determined by the Interim Resolution Professional (IRP).

According to the order, Central Bank had sanctioned a term loan of Rs 23.68 crore to the principal borrower under sanction letters issued in July and October 2016.

Rama Agro Foods executed a corporate guarantee on December 14, 2016, undertaking to repay the outstanding dues in the event of default by the principal borrower.

Loan Account Classified As NPA

The loan account was classified as a non-performing asset on December 29, 2019. The bank subsequently issued a demand notice under the SARFAESI Act in January 2020. The principal borrower failed to clear the dues and was itself admitted into CIRP by the NCLT on July 31, 2026.

The bank invoked Rama Agro Foods’ corporate guarantee on January 17, 2026. The notice sent to the company’s registered office was returned with the postal remark, “Addressee Left without Instructions.”

The bank subsequently sent the invocation notice by email to the company’s registered email address with the Registrar of Companies on February 10, 2026. The tribunal held that the guarantee had been validly invoked and treated February 10 as the date of default by the corporate guarantor.

Tribunal Rejects Limitation Objection

The tribunal also rejected any limitation objection, noting that the principal borrower had acknowledged its liability in its audited balance sheet as of March 31, 2024, while an earlier one-time settlement proposal and subsequent events also supported the bank’s case on limitation. It held that both the guarantee invocation and the Section 7 application were within limitation.

Rama Agro Foods did not contest the proceedings before the tribunal. Despite being served, nobody appeared on behalf of the company on April 9, 2026. The tribunal subsequently closed its right to file a reply and set the company ex-parte on May 7, 2026.

CIRP Proceedings Commence

The NCLT held that the bank had established the existence of the debt, execution of the corporate guarantee, default by the principal borrower, invocation of the guarantee and failure of Rama Agro Foods to make payment after the invocation. It consequently found the requirements for commencement of CIRP satisfied.

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The tribunal has appointed Shekhar Arvind Parkhi as the Interim Resolution Professional (IRP), directing him to take charge of the company’s management and conduct the insolvency resolution process.

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