SARFAESI Proceedings, ED Provisional Attachment Do Not Bar CIRP: NCLT Ahmedabad

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has held that ongoing SARFAESI proceedings and provisional attachment of a secured property by the Directorate of Enforcement do not bar initiation of the Corporate Insolvency Resolution Process (CIRP) against Capbridge Venture LLP.

“The contention that proceedings under the SARFAESI Act, 2002 bar the present Petition is untenable. The remedies available under the SARFAESI Act and the Insolvency and Bankruptcy Code operate in different fields, and initiation of statutory recovery measures does not preclude proceedings under Section 7 of the Code,” the tribunal observed.

The bench comprised Judicial Member Shammi Khan and Technical Member Sanjeev Sharma. It also held that the attachment may have implications during CIRP, but does not affect the petition's maintainability or extinguish the financial debt or default.

The petition was filed by CFM Asset Reconstruction Private Limited over financial debt of Rs 58.55 crore as on May 31, 2026.

The debt stood at Rs 58.55 crore, including Rs 46.67 crore in principal and Rs 11.88 crore in penal interest and charges. Poonawalla Fincorp had sanctioned Capbridge a Rs 25 crore property-backed loan in December 2023, followed by a Rs 25.03 crore top-up in December 2024.

The account became an NPA on July 4, 2025. Before the lender could take possession, the Directorate of Enforcement attached the property. The debt was later assigned to CFM Asset Reconstruction. Capbridge argued it was only a co-borrower. The tribunal rejected the objection, finding Capbridge liable under the loan documents.

The tribunal found the financial debt and default established through the loan documents, statements of account, and Information Utility record. It therefore rejected the objections and admitted the petition.

The bench appointed Bhavesh Manubhai Rathod as Interim Resolution Professional