The Mumbai Bench of the National Company Law Tribunal (NCLT) has admitted a plea filed by Bank of Maharashtra seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Tirumalla India Storehouse Private Limited over a default of Rs 17.98 crore.
Bank Moves Tribunal Under IBC Section 7 Against Corporate Guarantor
The bank had approached the tribunal under Section 7 of the Insolvency and Bankruptcy Code (IBC), stating that Tirumalla India Storehouse was the corporate guarantor for credit facilities availed by Tirumalla Agro Industries Private Limited. The bank had sanctioned aggregate credit facilities of Rs 16 crore, comprising two term loans of Rs 6 crore and Rs 8 crore and a cash credit facility of Rs 2 crore under the Maha Krishi Samrudhi Yojana.
“As the Corporate Debtor failed to file any reply to the Application and alsoto make appearance before this Tribunal, it closed the right of the Corporate Debtor to file reply and it was also set ex-parte vide the same order. In absence of any representation or reply by the Corporate Debtor, this bench has, while passing this order relied upon the documents as placed on record by the applicant alongwith the application and also vide its Additional Affidavit. The applicant has also attached alongwith the application NeSL record of default in Form-C with respect to the Principal Borrower. This bench also holds that as the revised date of default is November 28,2025, this application is well within the limitation period. Thus bench is convinced that the Corporate Debtor has extended its Corporate Guarantee to the Applicant in respect of the dues of the Principal Borrower M/s. Tirumalla Agro Industries Pvt Ltd, thePrincipal Borrower has defaulted in repayment of the said dues to theapplicant, the Corporate Guarantee was therefore invoked by the applicant and that the Corporate Guarantor has defaulted in making payment of the outstanding demanded by the applicant. The debt defaulted by the Corporate Debtor amounts to Rs. 17,98,68,464, whichThe corporate guarantor had executed a guarantee agreement on January 9, 2023, and had also mortgaged an industrial plot and building in Beed measuring 38,659.50 sq ft and 3,415.69 sq metres respectively, to secure the facilities. The property was valued at Rs 8.18 crore in a valuation report dated July 23, 2024,”the order copy reads.
NCLT Relies On Bank Records After Corporate Debtor Fails To Appear
According to the bank, the principal borrower defaulted on repayment of the term loans and in maintaining its cash credit account. The bank subsequently initiated action under the SARFAESI Act and issued a notice invoking the corporate guarantee on October 29, 2025. The notice was returned undelivered, following which the bank published the invocation notice in newspapers on November 20, 2025, giving the corporate guarantor seven days to clear the outstanding dues.
The tribunal noted that the principal borrower had already been admitted into CIRP on October 9, 2025, in proceedings initiated by an operational creditor. The Bank of Maharashtra had submitted a claim of Rs 17.87 crore in the CIRP of the principal borrower, which was admitted by the Interim Resolution Professional and remained unpaid.
The corporate debtor failed to appear before the tribunal or file a reply despite service of notice through email, speed post, affixture and dasti service. Its registered office was found closed during physical service. The tribunal subsequently closed its right to file a reply and proceeded against it ex parte.
The tribunal held that the bank had established the existence of financial debt and default through documentary evidence. It noted that the outstanding default of Rs 17,98,68,464 exceeded the Rs 1-crore threshold prescribed under Section 4 of the IBC and therefore admitted the application under Section 7.
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