State Bank of India Vs Varidhi Cotspin Pvt. Ltd. (NCLT Ahmedabad)
The NCLT Ahmedabad admitted State Bank of India’s application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of CIRP against Varidhi Cotspin Private Limited for default of Rs.43,39,28,196.47, with the date of default stated as 01.07.2024. The applicant had advanced Rs.49.50 crore under a consortium arrangement through various credit facilities secured against assets. Following non-repayment, SBI issued a loan recall notice dated 30.11.2024. The application was supported by, among other documents, the corporate debtor’s board resolution, consortium term loan agreement dated 24.08.2017, SARFAESI notice dated 25.10.2024, legal notice dated 30.11.2024, Record of Default and statements of account.
The Corporate Debtor opposed admission, alleging suppression of restructuring and settlement discussions, payments and other material facts, lack of proper authorization of the officer filing the application, limitation, deficiencies in computation of dues and evidentiary defects in the documents relied upon. It also contended that SARFAESI and other recovery proceedings were already underway and that it remained a running manufacturing concern with substantial assets and operational capacity. Relying on Vidarbha Industries Power Ltd v Axis Bank, it argued that its overall financial health and viability should be considered before admission. SBI disputed these objections, stating that the signatory was duly authorized, the application was within limitation, and the debt and default were established through certified records, acknowledgments and Information Utility records.
