Canara Bank Vs Citron Infraprojects Limited (NCLT Mumbai)
Summary: The National Company Law Tribunal, Mumbai Bench-VI, admitted Canara Bank’s application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process against M/s Citron Infraprojects Limited, a corporate guarantor of M/s Shrivallabh Pittie Industries Ltd.
The Financial Creditor stated that the Principal Borrower had availed several credit facilities from a consortium of banks. A term loan facility of Rs. 275 Crores was sanctioned on 09.03.2015, with Canara Bank’s exposure at Rs. 35 Crores, followed by working capital facilities and subsequent enhancement. An ad-hoc facility of Rs. 12 Crores was sanctioned in 2020, Canara Bank’s exposure being Rs. 3.60 Crores, besides GECL 2.0 facilities of Rs. 11.39 Crores and Rs. 5.70 Crores and a vehicle loan. The overall consortium facilities aggregated to Rs. 415 Crores, apart from the GECL facilities and vehicle loan.
The Corporate Debtor had executed corporate guarantees securing the facilities. The Principal Borrower defaulted on 30.03.2022 and its account was classified as NPA on 28.06.2022. Canara Bank issued a recall notice dated 17.03.2023 invoking the corporate guarantees and demanding Rs. 77.22 Crores as on 28.02.2023. The Corporate Debtor failed to pay. The amount claimed in the Section 7 application was Rs.119,64,40,125.82 as amended by additional affidavit.
