The National Company Law Tribunal (NCLT) at Chennai on 7 August admitted Gangotri Textiles Limited's application under Section 10 of the Insolvency and Bankruptcy Code, 2016 (IBC), thereby initiating Corporate Insolvency Resolution Process (CIRP) against it.

A Bench comprising Judicial Member Jyoti Kumar Tripathi and Technical Member Ravichandran Ramasamy observed:

“….this Tribunal is satisfied that the Corporate Debtor has established the existence of financial debt and default and that the application filed under Section 10 of the Code is complete in all respects. Accordingly, this Tribunal is of the considered view that the present application deserves to be admitted.”

Gangotri Textiles is a public limited company whose shares are listed on the Bombay Stock Exchange and the National Stock Exchange of India Limited.

The company had availed financial facilities from several lenders, including State Bank of India (SBI) and IDBI Bank, for its business operations. Owing to adverse financial conditions and cash flow constraints, it defaulted on repayment of the loans. The company disclosed financial debt in default of Rs. 240.46 crore.

SBI opposed the application, contending that recovery proceedings were already pending before the Debt Recovery Tribunal and that most of the secured assets had been sold under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). It alleged that the application was a mala fide attempt to stall the recovery proceedings initiated by the Bank and obtain the benefit of the moratorium under Section 14 of the IBC.

Examining the material on record, the Tribunal observed:

“….it is observed that the Corporate Debtor has placed on record the necessary documents including financial statements, statement of affairs, details of its creditors, and the authorisation for filing the present application by Resolution of the Board of Directors of the Corporate dated 08.11.2023 and shareholders/ members resolution dated 15.12.2023.”

The Bench found that Gangotri Textiles had placed on record the necessary documents, including its financial statements, statement of affairs, details of creditors and authorisation for filing the application through the Board of Directors' resolution dated 8 November 2023 and shareholders' resolution dated 15 December 2023. It held that the loan documents, statements and recall notices established the existence of financial debt and default.

On the pending recovery proceedings, the Bench reiterated that mere pendency of such proceedings before other forums does not bar initiation of CIRP under the IBC. It relied on National Company Law Appellate Tribunal's decision in Unigreen Global Private Limited v. Punjab National Bank, and observed that where a Section 10 application is complete and the corporate debtor is not ineligible under Section 11 of the IBC, the Adjudicating Authority is bound to admit it.

Accordingly, the NCLT admitted the application, initiated CIRP and appointed G. Gunasekaran as the Interim Resolution Professional.

For Applicant: Advocate Pranav Gopala Krishnan

For State Bank of India: Advocates K Chandrasekaran and K Muthukumar

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Case Title :  Gangotri Textiles LimitedCase Number :  CP(IBC)/310(CHE)/2025CITATION :  2026 LLBiz NCLT(CHE) 834
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