Cuttack NCLT Admits Canara Bank's Insolvency Plea Against S.S. Aluminium Pvt. Ltd.
Tribunal Dismisses MSME Claim and Limitation Plea, Initiates Corporate Insolvency Resolution Process.
The National Company Law Tribunal (NCLT), Cuttack Bench, has admitted the application filed by Canara Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. S.S. Aluminium Private Limited. The tribunal, in its judgment dated September 9, 2025, ruled in favor of the financial creditor, establishing the existence of financial debt and default beyond doubt.
Canara Bank, represented by Advocate Mr. Supriyo Ranjan Mahapatra, argued that M/s. S.S. Aluminium Pvt. Ltd., represented by Advocate Mr. Nalini Kanta Sahoo, defaulted on a financial debt exceeding Rs. 1 crore. The application was supported by loan account statements, a NeSL certificate, and debt acknowledgment instruments, which conclusively established the debtor's financial liabilities.
The respondent's attempts to challenge the application were dismissed by the tribunal. Their plea of limitation was refuted based on the acknowledgment of debt by the respondent, which extended the limitation period under Section 18 of the Limitation Act, 1963. Furthermore, the tribunal rejected the respondent’s late claim of MSME status, as it was raised without documentary evidence and not initially pleaded.
The tribunal also noted that the filing of an FIR against the financial creditor did not bar the initiation of CIRP under Section 7 of the Insolvency and Bankruptcy Code, 2016, as a pre-existing dispute cannot prevent such proceedings.
The tribunal declared a moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, prohibiting the institution of suits, disposal of assets, and enforcement of security interests against the corporate debtor during the Corporate Insolvency Resolution Process. Mr. Suresh Chandra Pattanayak was appointed as the Interim Resolution Professional (IRP) to carry out the functions as per the Code.
The tribunal's order emphasized the need for the respondent to assist the IRP in managing the corporate debtor's operations as a going concern, while also detailing the responsibilities of the IRP in protecting and preserving the corporate debtor’s property value.
This decision underscores the tribunal's commitment to uphold the provisions of the Insolvency and Bankruptcy Code, ensuring that financial debts are resolved within the legal framework. The initiation of CIRP marks a critical step in addressing the financial default and paving the way for potential resolution or liquidation of the corporate debtor’s assets.
Bottom Line:
Insolvency and Bankruptcy Code - Application under Section 7 for initiating Corporate Insolvency Resolution Process (CIRP) admitted - Moratorium declared under Section 14 of the Code - Financial debt and default established - Plea of limitation dismissed - MSME status raised belatedly not accepted - FIR against Financial Creditor not a bar for admission under Section 7 of IBC.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Section 7, Insolvency and Bankruptcy Code, 2016 Section 14, Limitation Act, 1963 Section 18, MSMED Act, 2006
Canara Bank v. M/s. S.S. Aluminium Private Limited : Law Finder Doc id # 2782282
