Case Law Details
IN2IT Systems & Services Pvt. Ltd Vs IN2IT Technologies Private Ltd. (NCLT Cuttack)
The application was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by the Financial Creditor seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor based on an alleged financial debt arising from a Loan Agreement dated 30 September 2020. The Financial Creditor claimed a default of ₹16.53 crore, comprising a principal outstanding of ₹11.04 crore and contractual interest of ₹5.49 crore at 18% per annum. The date of default was stated as 18 November 2025.
According to the Financial Creditor, the Corporate Debtor had approached it for financial assistance to meet liquidity and operational requirements. Under the Loan Agreement, a loan facility of up to ₹15 crore was sanctioned, permitting disbursements either directly to the Corporate Debtor or to its vendors based on written payment requests. The agreement provided that such disbursements constituted financial debt carrying interest at 18% per annum. The Financial Creditor submitted that funds were disbursed through banking channels pursuant to payment request letters and were utilised to settle the Corporate Debtor’s liabilities, including payments to various vendors. It relied on the Loan Agreement, payment request letters, bank statements, ledger statements, and financial statements to establish the debt.
The Financial Creditor further stated that the Loan Agreement required reimbursement of disbursements within three months from the end of the relevant financial year. Despite repeated reminders, recall notices, and a final demand notice dated 13 November 2025, the Corporate Debtor allegedly failed to repay the outstanding dues. Although the Corporate Debtor had undertaken on 2 July 2025 to repay the outstanding amount within two months, it paid only ₹1.20 crore, leaving the principal balance unpaid. The Financial Creditor asserted that the failure to repay constituted an event of default under the Loan Agreement, entitling it to initiate insolvency proceedings.
Pursuant to directions issued by the Tribunal, the Financial Creditor filed an affidavit detailing year-wise disbursements, repayments, outstanding balances, and accrued interest. It argued that acknowledgements of liability made by the Corporate Debtor through various communications and part-payments extended the limitation period under Sections 18 and 19 of the Limitation Act. It also contended that the Tribunal’s enquiry under Section 7 of the Code was confined to determining the existence of financial debt and default.
The Corporate Debtor disputed the allegations except where specifically admitted. It contended that it had continued making repayments, including payments aggregating ₹1.20 crore between 30 July and 11 August 2025, which were reflected in the Financial Creditor’s own records. According to the Corporate Debtor, these repayments demonstrated that it had not abandoned its repayment obligations and that there had been no wilful or continuous default. It argued that the insolvency petition was being used as a recovery mechanism.
The Corporate Debtor also submitted that it had proposed an amicable settlement by offering a full and final settlement payable within 180 days and requested that the proceedings be kept in abeyance. It stated that the Financial Creditor rejected the proposal and insisted on payment of the entire outstanding principal. The Corporate Debtor maintained that it was facing only temporary liquidity constraints and cash-flow mismatches, remained commercially viable, and should be granted reasonable time to regularise its payments rather than being subjected to insolvency proceedings.
After considering the pleadings and documents, the Tribunal held that the Loan Agreement, payment request letters, bank statements, and other records established that the funds were disbursed for the benefit of the Corporate Debtor and constituted a financial debt within the meaning of Section 5(8) of the Code. It found that the Applicant qualified as a Financial Creditor under Section 5(7).
On the question of default, the Tribunal observed that substantial amounts remained unpaid beyond the contractual repayment dates. It held that the Corporate Debtor had not disputed execution of the Loan Agreement, receipt of financial assistance, or the existence of outstanding amounts. The Tribunal ruled that part-payments did not erase the occurrence of default once the debt had become due and payable. It also held that the written acknowledgements of liability and part-payments extended the limitation period, making the application filed on 13 January 2026 well within limitation.
The Tribunal rejected the Corporate Debtor’s arguments regarding temporary liquidity issues, commercial viability, and settlement efforts. It held that once financial debt and default were established, such considerations did not affect the maintainability of a Section 7 application. It further observed that the settlement proposal itself reflected the existence of unresolved liability.
Concluding that a financial debt existed, the Applicant was a Financial Creditor, the Corporate Debtor had committed default, and the application was within limitation, the Tribunal admitted the petition under Section 7 of the Insolvency and Bankruptcy Code, initiated CIRP against the Corporate Debtor, declared a moratorium under Section 14, appointed an Interim Resolution Professional, and issued consequential directions for conduct of the insolvency process.
FULL TEXT OF THE NCLT JUDGMENT/ORDER
The instant application was filed on 13.01.2026 by In2IT Systems & Services Private Limited (formerly known as Alpha Codes IT Solutions Private Limited) (hereinafter referred to as the “Applicant/Financial Creditor”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code”) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as the “Adjudicating Authority Rules”) seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) against In2IT Technologies Private Limited (hereinafter referred to as the “Respondent/Corporate Debtor”) in respect of an alleged financial debt arising out of the Loan Agreement dated 30.09.2020. The Applicant has claimed a default amount of Rs.16,53,41,365/-(Rupees Sixteen Crores Fifty-Three Lakhs Forty-One Thousand Three Hundred and Sixty-Five only), comprising principal outstanding of Rs.11,04,07,794/- and interest amounting to Rs.5,49,33,570/- calculated at the contractual rate of 18% per annum as on 12.01.2026. The date of default, as stated by the Applicant, is 18.11.2025.
2. The averments made by the Financial Creditor/Applicant in its application and as argued by the learned counsel are summarised as under:
2.1.The Applicant, In2IT Systems & Services Pvt. Ltd. (formerly known as Alpha Codes IT Solutions Pvt. Ltd.), is a company incorporated under the provisions of the Companies Act and is a Financial Creditor within the meaning of Section 5(7) of the Code, 2016. The Corporate Debtor, In2IT Technologies Pvt. Ltd., is a company incorporated under the Companies Act having its registered office at Bhubaneswar, Odisha and is engaged in the business of providing IT Infrastructure, Application and IT Security Services in sectors including BFSI, Telecommunication, Manufacturing, FMCG and Retail.
2.2. The Applicant, by virtue of a Board Resolution dated 02.01.2026, authorised Mr. Roshan Kumar Dubey (DIN: 10167035) to institute and prosecute the application under Section 7 of the Code, 2016 on its behalf.
2.3. The Corporate Debtor, in order to meet its liquidity requirements, approached the Applicant seeking financial assistance. Pursuant thereto, the Applicant (“Lender”) and the Corporate Debtor (“Borrower”) executed a Loan Agreement dated 30.09.2020 at Noida, whereby the Applicant agreed to extend a loan facility with an overall sanctioned limit of Rs. 15 Crores. The said facility was intended to meet the liquidity and operational requirements of the Corporate Debtor, including settlement of its vendor liabilities. The loan facility contemplated disbursements either directly to the Corporate Debtor or to its vendors on behalf of the Corporate Debtor upon written requests made by it.
2.4. The Loan Agreement expressly provided that the disbursements made either directly into the account of the Corporate Debtor or to its vendors on its behalf, pursuant to written payment requests raised by the Corporate Debtor, would constitute financial debt carrying interest at the rate of 18% per annum for the time value of money within the meaning of Section 5(8) of the Code, 2016.
2.5. Pursuant to the Loan Agreement dated 30.09.2020, the Corporate Debtor from time to time raised Payment Request Letters on monthly basis expressly requesting the Applicant to disburse amounts either directly to the Corporate Debtor or to various third-party vendors on its behalf towards meeting its liquidity requirements and operational obligations. It is the case of the Applicant that in the Payment Request Letter dated 01.07.2023, the Corporate Debtor acknowledged its inability to repay the outstanding amount and assured the Applicant that the repayment would be made shortly.
2.6. The Applicant, notwithstanding the defaults committed by the Corporate Debtor, honoured the Payment Request Letters and released funds through regular banking channels. According to the Applicant, such disbursements were received, utilised and enjoyed for the economic benefit of the Corporate Debtor, thereby constituting valid disbursements and financial debt within the meaning of Section 5(8) of the Code. It has further been averred that the Corporate Debtor never disputed receipt of such amounts and had, on several occasions, admitted that the said amounts were raised under the Loan Agreement and remained payable along with contractual interest.
2.7. It has been submitted that each Payment Request Letter contained details of the vendor payees, bank account particulars, IFSC codes and the amounts sought to be disbursed, which were duly honoured by the Applicant by transferring funds accordingly. The Applicant has relied upon bank statements, ledger statements and financial statements to demonstrate that the payments were effected pursuant to the Payment Request Letters issued by the Corporate Debtor.
2.8. The Applicant has further stated that the disbursements were utilized for settlement of liabilities owed by the Corporate Debtor to vendors including Trustone Wegmans Developers, Microsoft Corporation India, Artha Infratech Pvt. Ltd., Achal Kumar through Axis Bank and other entities. According to the Applicant, such payments clearly establish release of funds for the benefit of the Corporate Debtor and the existence of a legally enforceable debt obligation.
2.9. In terms of Clause 3 of the Loan Agreement dated 30.09.2020, the Corporate Debtor was required to reimburse the Applicant for all disbursements made either directly in its favour or on its behalf during a financial year, within a period of three months from the end of the relevant financial year, i.e., on or before 30th June of the succeeding financial year during the subsistence of the Loan Agreement.
2.10.The Applicant has averred that there had been persistent irregularities on the part of the Corporate Debtor in adhering to its repayment obligations under the Loan Agreement. Nevertheless, the Applicant, despite not being a related party to the Corporate Debtor, continued to honour the payment requests raised by the Corporate Debtor in good faith and with a view to maintaining cordial commercial relations.
2.11.The applicant submitted that owing to the continuous defaults committed by the Corporate Debtor in discharging its repayment obligations, the Applicant issued various payment recall notices and reminder communications demanding repayment of the outstanding dues. It has been stated that in response to such recall notices, the Corporate Debtor, instead of liquidating the outstanding dues, sought repeated extensions of time for repayment of its obligations.
2.12.The Applicant has pleaded that notwithstanding the unequivocal undertaking furnished by the Corporate Debtor vide its letter dated 02.07.2025 to repay the entire outstanding liability within a period of two months therefrom, the Corporate Debtor failed to honour the said commitment. Upon expiry of the stipulated period, the Corporate Debtor remitted only a sum of Rs.1,20,00,000/- against the admitted outstanding amount of Rs. 12,24,07,794/-, thereby leaving an unpaid principal amount of Rs.11,04,07,794/-.
2.13. Thereafter, the Applicant issued a Final Demand Notice dated 13.11.2025 through Registered Post, electronic mail and hand delivery calling upon the Corporate Debtor to clear the entire outstanding dues within five days from the date of receipt thereof. According to the Applicant, the said notice was duly served upon the Corporate Debtor.
2.14.It has been contended by the Applicant that despite service of the Demand Notice dated 13.11.2025, the Corporate Debtor neither discharged its outstanding liability nor furnished any reply thereto
2.15. The Applicant has submitted that the failure of the Corporate Debtor to discharge its debt obligations constitutes an “Event of Default” under Clause 7 of the Loan Agreement dated 30.09.2020, which, inter alia, provides that default in repayment of disbursements on the applicable repayment dates would amount to an event of default.
2.16.It has further been contended that in terms of Clause 8 of the Loan Agreement dealing with the consequences of an event of default, the Applicant is entitled to initiate insolvency proceedings against the Corporate Debtor under the provisions of the Insolvency and Bankruptcy Code, 2016.
2.17. According to the Applicant, as on 12.01.2026, a total sum of Rs.16,53,41,365/ – (Rupees Sixteen Crores Fifty-Three Lakhs Forty-One Thousand Three Hundred and Sixty-Five only) remained due and payable by the Corporate Debtor, which comprises a principal amount of Rs.11,04,07,794/ – and simple interest amounting to Rs.5,49,33,570/- calculated at the contractual rate of 18% per annum.
2.18.The Applicant has asserted that the date of default is 18.11.2025. It has been pleaded that though the Corporate Debtor had defaulted in making repayments within the timelines stipulated under the Loan Agreement and despite issuance of reminder letters dated 08.06.2024, 03.04.2025 and 18.06.2025, the Corporate Debtor failed to liquidate the outstanding dues. Consequently, the Applicant issued the Demand Notice dated 13.11.2025 requiring payment within five days of receipt thereof. Since the Corporate Debtor failed to comply with the said demand despite due service, the Applicant has treated 18.11.2025 as the date of financial default for the purposes of initiation of the present proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016.
3. It was noticed by this Tribunal, vide order dated 12.02.2026, that the date of default in Part IV of the application had been shown as 18.11.2025 under the terms of the Loan Agreement. Accordingly, learned counsel appearing for the Financial Creditor was directed to furnish the details of the payments made to the Corporate Debtor and the defaults which had occurred during the relevant period in accordance with the terms of the Loan Agreement.
4. Pursuant to the directions issued by this Tribunal vide order dated 12.02.2026, the Financial Creditor filed an affidavit placing on record the bifurcation of the outstanding balance as on 31st March of each financial year commencing from the financial year 2020-21 onwards. According to the Financial Creditor, the said statement demonstrated the details of disbursements made, repayments received till 30th June of the succeeding financial year and the resultant outstanding balance in terms of the repayment obligations stipulated under the Loan Agreement dated 30.09.2020.
4.1. The Financial Creditor, in the aforesaid affidavit, furnished a year-wise statement showing that against the aggregate disbursements made during the financial years 2020-21 to 202526, the Corporate Debtor had failed to liquidate the entire dues within the timelines contemplated under the Loan Agreement, resulting in a cumulative outstanding principal amount of Rs. 11,04,07,795/- as on the financial year 2025-26. The Financial Creditor further furnished a separate bifurcation of the interest outstanding as on 31st March of each financial year and stated that the total outstanding interest had accumulated to Rs. 5,49,33,570/- as on the financial year 2025-26.
4.2. The Financial Creditor further submitted that it is not mandatory for a financial creditor to initiate proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 immediately upon occurrence of the first default and that the creditor retains the discretion to institute insolvency proceedings at any subsequent point of time, subject to the claim being within the period of limitation prescribed under law. In support of the said proposition, reliance was placed upon the judgment of the Hon’ble National Company Law Appellate Tribunal in Koncentric Investments Ltd. v. Standard Chartered Bank, along with other decisions rendered in Indiabulls Housing Finance Limited v. Revital Realty Private Limited, Shilpi Asthana v. IndusInd Bank Ltd. & Ors., and SREI Equipment Finance Ltd. v. R. S. Kamthe Infrastructure Developers Pvt. Ltd., as affirmed by the Hon’ble Supreme Court.
4.3. It was further contended by the Financial Creditor that the Corporate Debtor had, from time to time, acknowledged its liability in writing through communications dated 01.07.2023, 20.06.2024, 11.04.2025 and 02.07.2025, thereby extending the period of limitation in terms of Section 18 of the Limitation Act, 1963. In support of the said submission, reliance was placed upon the judgment of the Hon’ble Supreme Court in Dena Bank v. C. Shivakumar Reddy & Anr., wherein it has been held that an acknowledgment of liability made before expiry of the prescribed period of limitation gives rise to a fresh period of limitation.
4.4. The Financial Creditor also submitted that the repayments made by the Corporate Debtor under the Loan Agreement constituted part-payments within the meaning of Section 19 of the Limitation Act, 1963, thereby resulting in commencement of a fresh period of limitation from the respective dates of such payments. In this regard, the Financial Creditor referred to various repayments made by the Corporate Debtor, including payments of Rs.3,60,250/- on 31.03.2021, Rs.4,83,80,000/- on 31.03.2022, Rs.53,550/- on 25.08.2023, Rs.15,00,000/- on 19.07.2024 and Rs.3,20,200/- on 31.03.2025. Reliance was placed upon the decision of the Hon’ble National Company Law Appellate Tribunal in Super Floorings Pvt. Ltd. v. Napin Impex Ltd. in support of the aforesaid contention.
4.5. The Financial Creditor further submitted that the scope of enquiry under Section 7 of the Code, 2016 is confined to ascertaining the existence of a financial debt and the occurrence of default in relation thereto and that once such debt and default are established, the Adjudicating Authority is required to admit the application. In support of the said proposition, reliance was placed upon the judgments of the Hon’ble Supreme Court in Catalyst Trusteeship Ltd. v. Ecstasy Realty Pvt. Ltd. and B. Prashanth Hegde v. State Bank of India & Anr.
5. The submissions made by the Corporate Debtor/Respondent in its reply and as argued by the learned counsel appearing on its behalf are summarised as under:
5.1. The Corporate Debtor has denied and disputed the averments made by the Financial Creditor in the present petition, except to the extent specifically admitted in its reply.
5.2. The Corporate Debtor has averred that substantial payments were made even during the period immediately preceding the filing of the present petition. In this regard, it has been submitted that an aggregate amount of Rs.1,20,00,000/- (Rupees One Crore Twenty Lakhs only) was paid by the Corporate Debtor to the Financial Creditor between 30.07.2025 and 11.08.2025 through multiple banking transactions, which fact is reflected from the documents relied upon by the Financial Creditor itself in the present proceedings.
5.3. The Corporate Debtor has specifically contended that the aforesaid payments comprised, inter alia, two payments of Rs.25,00,000/- each made on 30.07.2025, two payments of Rs.25,00,000/- each made on 06.08.2025 and a further payment of Rs.20,00,000/- made on 11.08.2025.
According to the Corporate Debtor, the said payments clearly demonstrate that it had been regularly servicing its dues and had not abandoned its repayment obligations.
5.4. The Corporate Debtor has further submitted that the particulars of all repayments effected by it stand duly acknowledged in the ledger statement relied upon by the Financial Creditor in the present petition and, therefore, the allegation that the Corporate Debtor had completely defaulted in repayment is incorrect.
5.5. It has been contended that in light of the admitted payments reflected from the Financial Creditor’s own documents, there has been no willful or continuous default on the part of the Corporate Debtor and that the present petition constitutes a misuse of the provisions of the Code, 2016.
5.6. The Corporate Debtor has averred that its conduct clearly establishes that there has been neither any abandonment of liability nor any refusal to repay the dues. On the contrary, it has been averred that the Corporate Debtor has been servicing the debt to the extent possible and, therefore, the essential ingredient of “default” under Section 7 of the Code, 2016 has not been established.
5.7. It has further been submitted that the present petition has been instituted solely with the intention of subjecting the Corporate Debtor to insolvency proceedings on the premise that the outstanding amount allegedly satisfies the statutory threshold prescribed under the Insolvency and Bankruptcy Code, 2016, despite there being no willful or intentional default committed by the Corporate Debtor.
5.8. It has been submitted that with a bona fide intention to amicably resolve the disputes between the parties, the Corporate Debtor approached the Financial Creditor with a settlement proposal vide letter dated 25.02.2026. According to the Corporate Debtor, the said proposal was made with a genuine intention to avoid unnecessary litigation and settle the matter in a commercially viable manner.
5.9. The Corporate Debtor has stated that under the said settlement proposal, it proposed a full and final settlement of the alleged outstanding dues for an amount of 22,50,00,000/- (Rupees Two Crores Fifty Lakhs only), inclusive of principal and accrued interest, and assured that the said amount would be paid within a period of 180 days from the execution of a formal settlement agreement. It was further requested that the present proceedings be kept in abeyance during the settlement period.
5.10. It has further been contended that despite the bona fide efforts undertaken by the Corporate Debtor to amicably resolve the dispute, the Financial Creditor rejected the settlement proposal vide its communication dated 09.03.2026. According to the Corporate Debtor, the Financial Creditor stated that the proposed settlement amount was unacceptable and insisted upon payment of the entire outstanding principal amount, thereby refusing to engage in meaningful settlement discussions.
5.11. The Corporate Debtor has argued that the Financial Creditor failed to appreciate the settlement proposal in its proper perspective and neglected to consider the genuine efforts undertaken by the Corporate Debtor to resolve the matter amicably.
5.12.The Corporate Debtor has reiterated its willingness and readiness to explore settlement and resolve the dispute amicably, subject to reasonable terms and conditions.
5.13. It has been submitted that the Corporate Debtor is presently experiencing a short-term mismatch in cash flow due to temporary financial constraints and liquidity challenges. According to the Corporate Debtor, the said circumstances are temporary in nature and do not reflect upon its overall financial health or commercial viability.
5.14. The Corporate Debtor has further contended that temporary financial constraints cannot be equated with insolvency or inability to pay debts within the meaning and contemplation of the Code, 2016.
5.15. It has been submitted that in view of the prevailing circumstances, the Corporate Debtor requires reasonable time to stabilize its cash flows and discharge its obligations and has assured that payments shall be made to the Financial Creditor within a reasonable period.
5.16.The Corporate Debtor has lastly submitted that it ought to be afforded an opportunity to regularize its payments in accordance with its existing financial position rather than being subjected to insolvency proceedings, which, according to it, are not intended to operate as a recovery mechanism. It has further been contended that, the present application having been initiated at the instance of a sole creditor, this Hon’ble Tribunal retains the discretion to decline admission of the petition in the facts and circumstances of the case.
Findings and Analysis
6. We have heard the submissions advanced by the learned counsel appearing for the Financial Creditor and the Corporate Debtor and have carefully perused the pleadings, documents placed on record, written submissions and the judgments relied upon by the respective parties.
7. The first issue that arises for consideration is whether the amount claimed by the Applicant constitutes a “financial debt’ within the meaning of Section 5(8) of the Code, 2016. From the material available on record, it is evident that the parties entered into a Loan Agreement dated 30.09.2020 whereby the Applicant agreed to provide financial assistance up to an aggregate limit of Rs. 15 Crores to the Corporate Debtor. The Loan Agreement specifically contemplated disbursement of funds either directly to the Corporate Debtor or to third-party vendors on its behalf, against written payment requests raised by the Corporate Debtor. The agreement further stipulated payment of interest at the rate of 18% per annum.
7.1. The Applicant has produced copies of the Loan Agreement, Payment Request Letters, bank statements, ledger extracts and other supporting documents demonstrating that funds were disbursed from time to time either directly to the Corporate Debtor or to its vendors for and on behalf of the Corporate Debtor. The disbursements were made against specific requests issued by the Corporate Debtor and were admittedly utilized towards discharge of its liabilities and operational requirements. The transaction, therefore, bears all the essential characteristics of a financial debt, namely disbursement against consideration for the time value of money. Accordingly, we are satisfied that the amount claimed by the Applicant falls within the ambit of Section 5(8) of the Code and that the Applicant is a Financial Creditor within the meaning of Section 5(7) thereof.
7.2. The next issue is whether a default has occurred. Clause 3 of the Loan Agreement required the Corporate Debtor to reimburse the disbursements made during a financial year within three months from the end of such financial year. The statement furnished pursuant to the directions of this Tribunal demonstrates that substantial amounts remained unpaid beyond the contractual repayment dates. The Corporate Debtor has not disputed execution of the Loan Agreement, issuance of Payment Request Letters, receipt of financial assistance, or the fact that amounts remain outstanding.
7.3. The principal defense of the Corporate Debtor is that it had been making repayments from time to time and that an aggregate amount of U.20 Crores was paid between 30.07.2025 and 11.08.2025. In our considered view, such repayments do not efface the occurrence of default. It is well settled that for the purposes of Section 7 of the Code, the Adjudicating Authority is required to ascertain the existence of a financial debt and default. Mere part-payment of the outstanding dues does not obliterate the default once the debt has become due and payable and remains unpaid. The Corporate Debtor itself admits that amounts remain outstanding and has not produced any material demonstrating complete discharge of its liability.
7.4. The Financial Creditor has also placed on record various communications dated 01.07.2023, 20.06.2024, 11.04.2025 and 02.07.2025 whereby the Corporate Debtor acknowledged its liability and sought time for repayment. Significantly, in its communication dated 02.07.2025, the Corporate Debtor undertook to clear the outstanding dues within two months. However, only a sum of Z1.20 Crores was thereafter remitted, leaving a substantial balance unpaid. These acknowledgements unequivocally establish the subsistence of debt and also constitute acknowledgements under Section 18 of the Limitation Act, 1963.
7.5. We also find merit in the submission of the Financial Creditor that the repayments made by the Corporate Debtor constitute part-payments within the meaning of Section 19 of the Limitation Act, 1963, thereby extending the period of limitation. Consequently, the present application filed on 13.01.2026 is clearly within limitation.
7.6. The contention of the Corporate Debtor that it is facing only temporary liquidity constraints and that insolvency proceedings should not be initiated against a commercially viable entity cannot be accepted. The Hon’ble Supreme Court has repeatedly held that once a financial debt and default are established, the Adjudicating Authority is not required to enter into an examination of the viability of the Corporate Debtor or the reasons for default. The existence of financial stress, cash-flow mismatch, or willingness to pay at a future date does not defeat a petition otherwise maintainable under Section. 7 of the Code. 7.7. Equally untenable is the argument that the present proceedings have been instituted as a recovery mechanism. The Applicant has demonstrated the existence of a financial debt and continuing default. The Corporate Debtor’s proposal dated 25.02.2026 offering a full and final settlement of Rs. 2.5 Crores against the claimed dues itself indicates the existence of unresolved liability. The rejection of the settlement proposal by the Financial Creditor cannot dilute the statutory consequences flowing from the admitted default.
7.8. The judgments relied upon by the Financial Creditor in Koncentric Investments Ltd. v. Standard Chartered Bank, Indiabulls Housing Finance Ltd. v. Revital Realty Pvt. Ltd., Shilpi Asthana v. IndusInd Bank Ltd., SREI Equipment Finance Ltd. v. R.S. Kamthe Infrastructure Developers Pvt. Ltd., Dena Bank v. C. Shivakumar Reddy, Catalyst Trusteeship Ltd. v. Ecstasy Realty Pvt. Ltd. and B. Prashanth Hegde v. State Bank of India support the proposition that acknowledgment of liability and part-payments extend limitation and that the enquiry under Section 7 is confined to determination of debt and default. The facts of the present case squarely satisfy the requirements laid down therein.
7.9. Upon consideration of the entire material available on record, the Tribunal is satisfied that:
a. a financial debt exists between the parties;
b. the Applicant is a Financial Creditor;
c. the Corporate Debtor has committed default in repayment of the said financial debt; and
d. the application has been filed within the prescribed period of limitation.
8. In view of the foregoing discussion and being satisfied that a financial debt is due and payable by the Corporate Debtor and that default has occurred, the present Company Petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 is
9. Accordingly, the CIRP is hereby initiated against In2IT Technologies Private Limited.
10. A moratorium is declared under Section 14 of the Code, 2016, prohibiting the following actions in terms of Section 14(1) of the Code:
10.1. The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor, including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;
10.2. Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein;
10.3. Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property, including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
10.4. The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate Debtor.
11. The moratorium shall remain in force from the date of this order till the completion of the Corporate Insolvency Resolution Process or until this Adjudicating Authority approves a resolution plan under section 31(1) of the code or passes an order for liquidation of the Corporate Debtor under Section 33 of the Code, whichever is earlier.
12. The Financial Creditor proposed the name of an IRP through its petition and has filed a separate application annexing the consent in Form-2, seeking appointment of Ishant Jain (IBBI Regn. No. IBBI/IPA-001/IP-P-02530/2021-22/14038) as the Interim Resolution Professional, in terms of Section 16(4) of the Insolvency and Bankruptcy Code, 2016.
13. The Interim Resolution Professional so appointed shall make a public announcement of the initiation of the Corporate Insolvency Resolution Process and call for submission of claims in terms of Section 15 read with Section 13(1)(b) of the Code.
14. The supply of essential goods or services to the corporate debtor, if continuing, shall not be terminated, suspended or interrupted during the moratorium period. The Corporate Debtor shall extend full assistance and cooperation to the Interim Resolution Professional in discharge of his duties as and when he takes charge of the assets and management of the corporate debtor”.
15. The IRP shall perform all its functions as contemplated, inter alia, by sections 17,18,20 86 21 of the code. It is further made clear that all personnel connected with Corporate Debtor, its Promoter or any other person associated with the management of the Corporate Debtor are under a legal obligation under Section 19 of the Code to extend every assistance and co-operation to the Interim Resolution Professional where any personnel of the corporate Debtor, its Promoter, or any other person is required to assist or co-operate with IRP, that does not assist or co-operate, the IRP is at liberty to make an appropriate application to this Adjudicating Authority with a prayer for passing an appropriate order.
16. The IRP shall be under a duty to protect and preserve the value of the properly of the corporate Debtor and manage the operations of the Corporate Debtor as a going concern as a part of the obligation imposed by Section 20 of the Code, 2016.
17. The Interim Resolution Professional / Resolution Professional shall submit periodic progress reports before this Adjudicating Authority in accordance with the provisions of the code and the regulations framed thereunder.
18. The Operational creditor shall deposit an initial amount of Rs. 2,00,000/- (Rupees Two Lakhs only within 3 days (Three days) from the date of receipt of this order towards the expenses of the Corporate Insolvency Resolution Process. Proof of such deposit shall be filed before this Adjudicating Authority along with the first progress report. The Interim Resolution Professional shall be at liberty to seek further interim finance, as required, in accordance with law.
19. Further, the Registry is directed to communicate a copy of this order to the financial creditor, the Corporate Debtor, the Interim Resolution professional and the concerned Registrar of Companies within seven working days and upload the same on the website of this Tribunal immediately after pronouncement.
20. The Interim Resolution Professional shall also serve a copy of this order upon statutory authorities including the Income Tax Department, GST authorities, State commercial Tax Department, Provident Fund authorities and such other authorities as may have claims against the corporate Debtor, 85S well as employees or workmen associations, if any.
21. The Corporate Insolvency Resolution Process shall commence from the date of this order.
22. The Resolution Professional shall submit reports and compliances before this Adjudicating Authority strictly in accordance with the timelines prescribed under Code, 2016 and the regulations made thereunder.
23. The petition CP (IB) No 9/CB/2026 is ALLOWED and the IN2IT Technologies Pvt. Ltd., the Corporate Debtor is ADMITTED in the CIRP under IBC,2016.
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