HDFC Bank's Insolvency Plea Against Turnest Resources Approved by NCLT Ahmedabad

National Company Law Tribunal initiates Corporate Insolvency Resolution Process amid allegations of fraudulent intent.

In a significant development, the National Company Law Tribunal's (NCLT) Ahmedabad Bench has admitted HDFC Bank Limited's insolvency petition against Turnest Resources Private Limited. The application, filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeks to initiate the Corporate Insolvency Resolution Process (CIRP) due to Turnest Resources' alleged default on financial obligations exceeding Rs. 30 crore.

The tribunal, comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma, issued the order on November 7, 2025, dismissing Turnest Resources' claims of fraudulent and malicious intent under Section 65 of the IBC. The Ahmedabad-based company had contended that the insolvency petition was orchestrated to exert undue pressure rather than resolve genuine insolvency issues.

HDFC Bank substantiated its claims with extensive documentation, including sanction letters, acknowledgments of debt, and notices of default. Despite Turnest Resources' objections regarding the unilateral release of solvent guarantors and alleged engineered defaults, the tribunal ruled that the financial creditor had adhered to legal and contractual obligations without malice.

The tribunal's decision underscores the importance of cogent evidence when alleging fraudulent intentions under Section 65, emphasizing that mere assertions without substantial proof are insufficient to dismiss an insolvency petition.

As a result of the order, Turnest Resources is now subject to a moratorium under Section 14 of the IBC, prohibiting legal actions against the company and protecting its assets during the CIRP. Mr. Rajendra Devidas Puranik has been appointed as the Interim Resolution Professional to manage the process.

This ruling reaffirms the NCLT's stance on maintaining the integrity of insolvency proceedings, focusing on the existence of financial debt and default, as reinforced by precedents from the Supreme Court and other legal authorities.

Bottom Line:

Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016, cannot be dismissed on mere allegations of fraudulent or malicious intent unless supported by cogent evidence under Section 65 of the Code.

Statutory provision(s): Insolvency and Bankruptcy Code, 2016 - Sections 7, 14, 65, 128, 138; Indian Contract Act, 1872; SARFAESI Act, 2002

HDFC Bank Limited v. Turnest Resources Private Limited, (NCLT)(Ahmedabad Bench) : Law Finder Doc Id # 2819865