Mumbai: NCLT Admits Superfine Metals To Insolvency On Central Bank Of India Plea Over ₹58.64 Crore Default

Mumbai, July 23: The Mumbai Bench of the National Company Law Tribunal (NCLT) has admitted the corporate insolvency resolution process (CIRP) against Ahilyanagar-based Superfine Metals Private Limited on a petition filed by Central Bank of India, after holding that the lender had established the existence of a financial debt and default amounting to Rs 58.64 crore.

The tribunal also rejected the company's contention that the insolvency plea was barred under Section 10A of the Insolvency and Bankruptcy Code (IBC). As per Section 10A, it effectively bars insolvency proceedings for defaults occurring between March 25, 2020, and the stipulated suspension period.

Tribunal Rejects Section 10A Plea

The tribunal, in its order, while explaining why Section 10A was not applicable in favour of the company, observed: “It is observed from the Statement of Accounts placed by the Financial Creditor, the bank, on record, that the outstanding amount as on February 27, 2020, was Rs 51,99,68,600.

The bank has further submitted that interest amounting to approximately Rs 48,00,000 was debited on February 29, 2020, being the last day of the month. Consequently, the outstanding amount exceeded the sanctioned credit limit of Rs 52,00,00,000.

As per the terms and conditions of the sanction, the excess amount was required to be regularised on or before March 10, 2020. However, the Corporate Debtor failed to regularise the account within the stipulated time, resulting in the occurrence of default on March 10, 2020.”

The bank, in its petition, stated that it had sanctioned and renewed multiple credit facilities, including a cash credit limit of Rs 52 crore in 2019 and an ad hoc facility in December 2019. It alleged that despite repeated notices, including a loan recall notice issued in January 2023, the company failed to clear its outstanding dues.

Company's Objections Rejected

Opposing the plea, Superfine Metals argued that the insolvency application was not maintainable as the date of default fell within the suspension period under Section 10A of the IBC, which barred the initiation of CIRP for defaults occurring during the COVID-19 period.

The company further claimed that the petition was incomplete, lacked material documents, and that it remained a financially sound going concern.

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Rejecting these objections, the tribunal held that the relevant dates of default were contractually determined as March 10 and March 24, 2020, and not the later date when the account was classified as a non-performing asset (NPA).

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