IDBI Bank Limited Vs Minwool Rock Fibres Limited (NCLT Cuttack)
The National Company Law Tribunal (NCLT), Cuttack Bench, considered an application filed by IDBI Bank Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Minwool Rock Fibres Limited for an alleged financial debt of Rs. 20,17,10,235.01. The amount comprised the decretal sum awarded by the Debts Recovery Tribunal (DRT) together with accrued interest, and the Financial Creditor relied upon the Recovery Certificate issued by the DRT as the basis for the date of default.
According to the Financial Creditor, the Corporate Debtor had obtained various credit facilities, including Letter of Credit, Bank Guarantee, Bill Discounting, and Cash Credit facilities, initially sanctioned in November 2006 and subsequently enhanced from time to time until the total exposure reached Rs. 9.75 crore by January 2013. To secure these facilities, the Corporate Debtor executed various facility documents, hypothecation agreements, supplemental deeds, demand promissory notes, omnibus counter guarantees, and personal guarantees. Certain shareholders also pledged their shares in favour of the bank.
The Financial Creditor stated that Bank Guarantees and Letters of Credit amounting to Rs. 3,68,51,529 were invoked, resulting in liability on the part of the Corporate Debtor. Following alleged failure to discharge these obligations, the bank recalled the facilities on 4 September 2015 and demanded repayment. Recovery proceedings were thereafter initiated before the Debts Recovery Tribunal-I, Hyderabad. On 20 April 2018, the DRT directed payment of Rs. 8,20,51,316.21 along with future interest at 14.50% per annum. Subsequently, Recovery Certificate No. 306 of 2022 was issued on 12 December 2022, followed by a demand notice dated 4 January 2023. Based on the DRT order and Recovery Certificate, the Financial Creditor claimed that the outstanding amount as on 1 December 2025 stood at Rs. 20,17,10,235.01, comprising the decretal amount and accrued interest. The Financial Creditor treated 12 December 2022, the date of issuance of the Recovery Certificate, as the date of default.
