Bank of India Vs Karvir Nivasini Mahalaxmi Ispat Private Limited (NCLT Mumbai)
Summary: The National Company Law Tribunal, Mumbai Bench-VI admitted Bank of India’s application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for commencement of Corporate Insolvency Resolution Process (CIRP) against Shri Karvir Nivasini Mahalaxmi Ispat Private Limited. The application was filed on 13.01.2026. The Financial Creditor claimed Rs. 23,66,42,307.14/- as outstanding, with the pleaded date of default being 17.09.2024 and NPA classification dated 15.12.2024.
The Bank had sanctioned and renewed various facilities, including a Cash Credit facility ultimately enhanced to Rs. 15 Crores and a GECL Term Loan of Rs. 1.50 Crores. A Bank Guarantee facility of Rs. 3 Lakhs was also reflected but was not included in the claimed default as it remained uninvoked. The Corporate Debtor had executed loan, hypothecation, mortgage, guarantee and other security documents and an Acknowledgement of Debt and Security for Cash Credit dated 29.08.2024. The Bank relied upon certified statements of account, the NeSL Record of Default, sanction letters, security documents and other contemporaneous records. The computation table reproduced on page 5 of the order records total dues of Rs. 23,66,42,307.14/- as on 02.12.2025.
The Corporate Debtor opposed admission on several grounds. It disputed the debt and date of default, challenged the authority of the Bank’s signatory, contended that the Cash Credit facility had not been recalled and therefore no default had occurred, and argued that the NPA classification was legally invalid because the Bank had allegedly not complied with RBI prudential norms and the MSME Revival and Rehabilitation Framework. It also relied upon restructuring proposals, additional security offered to the Bank, proposed asset monetisation, investor interest, alleged incorrect CIBIL reporting, pending SARFAESI/DRT proceedings and its continuing operational viability.
