Mumbai, April 3: The Mumbai bench of the National Company Law Tribunal (NCLT) has admitted an insolvency petition filed by Canara Bank against a Pune-based firm, M/s Mitsom Enterprises Pvt. Ltd., initiating the Corporate Insolvency Resolution Process (CIRP) over a default exceeding Rs 73 crore.
NCLT admits insolvency plea
A division bench comprising Judicial Member Nilesh Sharma and Technical Member Sameer Kakar passed the order thereafter, concluding that the financial creditor had successfully established the existence of debt and default beyond the statutory threshold under the Insolvency and Bankruptcy Code (IBC).
Bank cites default on credit facilities
Canara Bank had approached the tribunal under Section 7 of the IBC, stating that it had sanctioned credit facilities to the Pune-based company in 2017, including a cash credit limit and a letter of credit facility. The bank claimed that Mitsom Enterprises defaulted on its repayment obligations, with the total outstanding amount mounting to over Rs 73.69 crore.
Company disputes claims
The corporate debtor, however, opposed the plea, disputing the quantum of dues, the date of default, and the maintainability of the application. It also argued that the claim was barred by limitation and that an alleged one-time settlement (OTS) proposal could not be treated as a valid acknowledgment of debt.
Tribunal rejects objections
Rejecting these contentions, the tribunal held that the bank had placed sufficient material on record, including loan documents, account statements, and a record of default authenticated through the information utility.
It further ruled that payments made by the company over the years, along with the OTS proposal submitted in May 2023, constituted valid acknowledgments of liability, thereby extending the limitation period.
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IRP appointed to oversee process
The tribunal has appointed insolvency professional Pankaj Sham Joshi as the Interim Resolution Professional (IRP) to take charge of the company’s management and oversee the resolution process.
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