NCLT Mumbai Dismisses CIRP Plea Filed To Avoid Consequences Of ₹250 Crore Statutory Demands

The National Company Law Tribunal (NCLT) at Mumbai has dismissed an insolvency plea filed by Infinite Pinnacle Pvt Ltd against Mart Overseas Pvt Ltd. The tribunal held that the petition was a fraudulent application filed to get away from criminal consequences arising from statutory demands of about ₹250 crores against the corporate debtor.

A bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar held that the petition was filed for a purpose other than the resolution of the corporate debt.

“The above facts relating to non-accounting of the interest by either of the parties, the filing of this petition primarily for interest component, absence of any business in the corporate debtor since FY-2020-21, absence of any fixed asset and existence of loans and advances receivable for few lacs, and existence of statutory liability amount to approximately Rs. 250 crores lead to an inevitable conclusion that this petition is filed for the purpose other than the resolution of the corporate debtor.” the bench said.

Infinite Pinnacle had filed the plea under Section 7 of the Insolvency and Bankruptcy Code claiming a default of ₹1,24,13,200.96 arising from a business loan agreement dated March 8, 2021.

According to the financial creditor, it had advanced a ₹1 crore business loan to Mart Overseas for business expansion at an interest rate of 24% per annum, with quarterly compounding in the event of non-payment, repayable by March 31, 2021.

It relied on correspondence exchanged between 2021 and 2024, including acknowledgment letters, along with a final loan recall notice issued in March 2025, to establish default.

Mart Overseas, while admitting financial difficulties, contended that it had made substantial repayments aggregating to ₹99.89 lakh between January and February 2024.

It argued that the claim was substantially interest-driven and that insolvency proceedings should not be used as a recovery mechanism.

While drafting the judgment, the tribunal de-reserved the matter and directed the corporate debtor to place on record its financial statements and both parties to produce ledger accounts.

On examining the records, the bench found that neither side had accounted for any interest payable or receivable in their books till March 31, 2025, despite the agreement providing for 24% interest, with quarterly compounding upon default.

It also noted that the corporate debtor had no business operations since FY 2020-21, no fixed assets, and contingent VAT and CST liabilities aggregating to nearly ₹250 crore, against which criminal proceedings had already been initiated.

The tribunal also noted that the applicant creditor had shown only an opening balance of ₹ 10,050 due from the corporate debtor as on April 1, 2025, before debiting ₹1.24 crore towards interest the same day.

The bench further observed that correspondence exchanged between the parties over four years appeared in an identical type set and format, while the loan agreement dated March 8, 2021 was neither stamped nor witnessed.

Holding that the parties had created a “purported story of interest bearing loan” unsupported by their books of account till March 31, 2025, to “get away from the criminal consequences” of the statutory demands, the tribunal dismissed the plea as fraudulent.

It also directed Infinite Pinnacle to deposit costs of ₹ 1 lakh in the “Bharatkhosh” account in favour of the Pay and Accounts Officer, Ministry of Corporate Affairs, Mumbai.