NCLT Mumbai Allows Saraswat Bank To Make Clarificatory Amendments To Section 7 Petition

On 5 February 2026, the Mumbai Bench of the National Company Law Tribunal (NCLT) allowed Saraswat Co‑operative Bank Limited to amend its pending Section 7 petition against AAACORP Exim India Private Limited to correct the date of default, NPA classification date, and outstanding dues of Rs. 15.59 crore. 

The Bench comprising Judicial Member Sushil Mahadeorao Kochey and Technical Member Charanjeet Singh Gulati, held that that such amendments are permitted if they are clarificatory, necessary for effective adjudication, and do not create a new case or prejudice the corporate debtor. The members noted:

“There is no bar in law to the amendment of pleadings in an application under Section 7 of the Insolvency Code… the present application is limited to determining whether the particulars in the main petition… can be amended.”

The bank explained that the original petition contained incorrect details due to inadvertence, while an RBI inspection report dated 1 January 2020 and stock audit findings showed continuous default from November 2018 and a “sub-standard” NPA classification effective March 2019.

Financial records showed a deterioration in AAACORP Exim India's position: net losses of Rs. 65.87 lakhs in FY 2016–17 and Rs. 387.16 lakhs in FY 2017–18, complete erosion of reserves by March 2018, devolved letters of credit totaling Rs. 727.02 lakhs from November 2018, and a downgrade of its credit rating to 'D – Issuer Not Cooperating' by CARE Ratings.

The corporate debtor opposed the amendments, alleging malafide intent, claiming the bank “induced and engineered” the default to recover debts of an associate, J J Poly Impex Private Limited, and highlighting that previous SARFAESI notices and filings used the September 2019 NPA date.

The Tribunal clarified that it was not deciding the actual default or NPA date at this stage. The only issue was whether the petition could be corrected. Relying on Dena Bank v. C. Shivakumar Reddy (2021) 10 SCC 330, it held that amendments are allowed before admission or rejection if clarificatory, necessary for adjudication, and do not introduce a new case.

The Tribunal directed the bank to file the amended petition within two weeks and allowed the corporate debtor two weeks to respond to the amended details. Finding that the proposed changes were clarificatory and did not set up a new case, the Tribunal allowed the application.

For Applicant : Adv. Aayush Kothari a/w Adv. Shreyansh Desai

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