Progfin Private Limited Vs Ganesh Benzoplast Limited (NCLAT Delhi)
Material Facts
The appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) challenged the order of the National Company Law Tribunal, Mumbai Bench-V dated 01.09.2025 dismissing a Section 7 application seeking initiation of Corporate Insolvency Resolution Process (CIRP). The financial creditor had claimed that it extended working capital facilities initially of ₹10 crore and later enhanced to ₹15 crore to the principal borrower, supported by a Facility Agreement, corporate guarantee and personal guarantees executed by Ramakant Pilani. Upon alleged default, a recall notice dated 15.04.2024 was issued, followed by filing of the Section 7 petition.
The respondent denied liability, asserting that the loan documents, board resolutions and bank account relied upon by the appellant were unauthorized, forged and fabricated. It alleged that the relevant bank account had been fraudulently opened without corporate authorization and that the transactions did not benefit the corporate debtor.
Procedural History
The Adjudicating Authority dismissed the Section 7 petition after observing that although debt and default appeared facially established, the surrounding circumstances involving alleged fraud, forged documents and unauthorized transactions prevented establishment of debt and default against the respondent within the Tribunal’s summary jurisdiction. The financial creditor appealed before the NCLAT.
