NCLT Mumbai Admits IIFL Home Finance Insolvency Plea Against J-Seventy One Properties Over ₹2.42 Crore Default

The Mumbai Bench of the National Company Law Tribunal (NCLT) has admitted an insolvency plea filed by IIFL Home Finance Ltd. against J-Seventy One Properties and Pictures Pvt. Ltd. after finding that the company owed a financial debt of about ₹2.42 crore and had remained in default.

Judicial Member Nilesh Sharma and Technical Member Sameer Kakar held that the financial debt and the continuing default were established through documentary evidence.

"In view of the above, the Applicant has successfully demonstrated the existence of a financial debt, as the transaction involves money borrowed against the payment of interest under section 5(8)(a) of IBC 2016, the occurrence of default, which is way above the threshold as stipulated under Section 4 of the Code, and continuing nature of such default supported by clear documentary evidence."

The dispute arose from loan facilities sanctioned to the corporate debtor in March 2017 followed by top up loans in October 2020 and April 2021. The borrower defaulted on repayment, leading to its account being classified as a Non Performing Asset on April 6, 2021.

IIFL then initiated proceedings under the SARFAESI Act, issued a demand notice under Section on April 12, 2021 and subsequently sold two mortgaged properties through e-auction in March and July 2024. Despite a legal recall notice dated February 13, 2025, the outstanding dues remained unpaid.

Examining the material on record. the Tribunal held that the financial creditor had successfully established the existence of a financial debt and continuing default far above the threshold prescribed under the Insolvency and Bankruptcy Code, supported by documentary evidence.

Relying on the Supreme Court's decision in Power Trust (Promoter of Hiranmaye Energy Ltd.) v. Bhuvan Madan, the Tribunal observed that at the admission stage under Section 7, it is only required to ascertain the existence of a default and not examine the corporate debtor's financial viability or other disputes.

The Tribunal also clarified that it had not crystallised the amount claimed by the financial creditor and left the determination of the final admitted claim to the IRP during the CIRP.

Accordingly, the Tribunal admitted the petition, declared a moratorium under Section 14 of the IBC and appointed Kamal Agarwal as the interim resolution professional. 

For Applicant: Advocates Aayush Kothari aling with  Advocate Nikhil Rajani & Mrunalini Deshpande instructed by  v. Deshpande & Co.

For Respondent: Ex-Parte