Corporate Insolvency Resolution Process Begins Following South Indian Bank's Petition
In a significant development, the Kochi Bench of the National Company Law Tribunal (NCLT) has admitted a petition filed by South Indian Bank Ltd, initiating the Corporate Insolvency Resolution Process (CIRP) against M/s. Nellai Plantations Private Limited. The petition, filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, was admitted on December 12, 2025, by Member (Judicial) Shri. Vinay Goel.
The South Indian Bank, acting as the Financial Creditor, had sought the initiation of CIRP against Nellai Plantations, citing a default on financial debts exceeding the statutory threshold of Rupees 1 crore. The debt, amounting to approximately Rs. 2.92 crore, was primarily attributed to a Cash Credit Agricultural Loan and a Term Loan disbursed to Nellai Plantations, which defaulted on repayments.
The NCLT's order clarified that the jurisdiction for such proceedings is determined by the location of the Corporate Debtor's registered office, which in this case is situated in Kottayam, Kerala. The tribunal dismissed objections raised by Nellai Plantations regarding jurisdiction and the alleged lack of a demand notice under Sections 8 and 9 of the IBC, noting that such notice is not required for financial creditors proceeding under Section 7 of the IBC.
The tribunal has declared a moratorium, effective immediately, halting all proceedings against Nellai Plantations until the completion of the CIRP or the approval of a resolution plan. Mr. Allen Bosco has been appointed as the Interim Resolution Professional (IRP), tasked with managing the affairs of the Corporate Debtor during the resolution process.
In its defense, Nellai Plantations had contended that the initiation of CIRP would adversely affect its operations, emphasizing its unique biodiverse plantation spread over 84 acres. However, the tribunal found no legal impediments to proceeding with the CIRP, given the established default and the debt exceeding the statutory threshold.
The tribunal's order mandates a public announcement of the CIRP and requires the management of Nellai Plantations to cooperate with the IRP by providing all necessary documentation and information. The tribunal also directed the South Indian Bank to deposit Rs. 2 lakh with the IRP to cover expenses related to public notices and claim invitations.
This decision underscores the tribunal's commitment to adhering to the statutory provisions of the IBC and ensuring that financial creditors can enforce their rights through the insolvency resolution process.
Bottom Line:
Corporate Insolvency Resolution Process (CIRP) initiated under Section 7 of the Insolvency and Bankruptcy Code, 2016 - Jurisdiction determined by registered office location of Corporate Debtor.
Statutory provision(s): Sections 4, 5(8), 7, 8, 9, 14, and 60 of the Insolvency and Bankruptcy Code, 2016.
