NCLT Kolkata Bench Upholds Corporate Insolvency Proceedings Against M/s S A Plywood Industry

Central Bank of India's Application to Initiate Insolvency Proceedings Against Corporate Debtor Admitted

In a significant development, the National Company Law Tribunal (NCLT) Kolkata Bench has admitted an application filed by the Central Bank of India to initiate Corporate Insolvency Resolution Process (CIRP) against M/s S A Plywood Industry Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. The bench, comprising Shri Labh Singh, Member (Judicial), and Ms. Rekha Kantilal Shah, Member (Technical), delivered the judgment on November 13, 2025.

The application was filed by Central Bank of India, the financial creditor, citing a financial default exceeding the threshold limit of Rs. 1 crore by the corporate debtor. The Tribunal found that the financial creditor had successfully demonstrated the existence of a financial debt and default, thus rendering the application maintainable.

The Tribunal also declared a moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, imposing prohibitions on the institution or continuation of suits, transferring or alienating assets, and recovery actions against the corporate debtor. However, it clarified that the moratorium does not extend to transactions notified by the Central Government or the supply of essential goods or services.

The appointment of Mr. Subodh Kumar Agrawal as the Interim Resolution Professional (IRP) was confirmed, as no disciplinary proceedings were found pending against him. The Tribunal directed the public announcement of the CIRP admission and instructed the financial creditor to deposit Rs. 3 lakh with the IRP for managing the resolution process.

The Tribunal dismissed the corporate debtor's objections, which questioned the authorization of the application and the classification of non-performing assets. It upheld the RBI's borrower-wise classification guidelines, stating that once an account is classified as an NPA, all related accounts are similarly classified.

This decision marks a pivotal point in the financial restructuring efforts for M/s S A Plywood Industry Private Limited, as the CIRP aims to resolve the insolvency and restore financial stability.

Bottom Line:

Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) against a Corporate Debtor is maintainable when financial debt and default exceeding the threshold limit of Rs. 1 crore is established.

Statutory provision(s):

Insolvency and Bankruptcy Code, 2016 - Sections 7, 14, 7(3)(b),

Indian Evidence Act, 1872 - Section 85

Reserve Bank of India Guidelines

Central Bank of India v. M/s S A Plywood Industry Private Limited, (NCLT)(Kolkata Bench) : Law Finder Doc Id # 2822071