NCLT Chandigarh Admits Himalaya Food's Insolvency Plea Against A.P.J. Laboratories Over ₹14.41 Cr Default

The Chandigarh Bench of the National Company Law Tribunal National Company Law Tribunal on 25 May admitted a Section 7 petition filed by Himalaya Food International Limited and initiated Corporate Insolvency Resolution Process (CIRP) against A.P.J. Laboratories Limited for default of Rs 14.41 crore, holding that the debt and default stood admitted and undisputed.

Judicial Member Khetrabasi Biswal and Technical Member Kaushalendra Kumar Singh admitted the petition, appointed an Interim Resolution Professional, and declared a moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016. The Bench held:

“..the Corporate Debtor has neither disputed the existence of the debt nor the occurrence of default. On the contrary, the Corporate Debtor has acknowledged its financial inability to repay the dues and has expressed no objection to the initiation of Corporate Insolvency Resolution Process. Such conduct further reinforces the conclusion that the debt and default are admitted and undisputed.”

Himalaya Food International Limited extended loans to A.P.J. Laboratories from 2012, aggregating Rs 5.61 crore. The parties executed a mortgage deed on 28 August 2015, converting the unsecured loan into a secured facility. They structured repayment in 120 monthly instalments starting 10 October 2015 at 12.5% interest.

The corporate debtor defaulted from the first instalment and failed to cure the default despite notices issued in 2018. It continued to reflect the liability in its balance sheets up to FY 2021–22, which extended limitation under Section 18 of the Limitation Act.

The outstanding dues, including interest, stood at Rs 14.41 crore as on 31 March 2023. The record showed partial payments of Rs 1 lakh in February 2021 and Rs 10 lakh in February 2022, but the debt remained largely unpaid.

The applicant relied on bank transfer records, balance sheets, and Master Data entries to prove the financial debt and default.

A.P.J. Laboratories did not file a substantive reply. Instead, it filed an affidavit in September 2024 stating that the petition was not collusive. It admitted its inability to repay dues, confirmed that operations had ceased since 2015, and gave no objection to initiation of CIRP, thereby effectively admitting default.

The Tribunal held that the debt exceeded the statutory threshold of Rs 1 crore under Section 4 of the Insolvency and Bankruptcy Code, 2016, and found the application within limitation.

Accordingly, it admitted the petition under Section 7 and initiated CIRP against the corporate debtor.