NCLT Kochi Admits IMOST To Insolvency, Says International Reputation Concerns No Bar Once Default Proven

The National Company Law Tribunal (NCLT) at Kochi has admitted an insolvency petition filed by Axis Bank Limited to initiate the Corporate Insolvency Resolution Process against IMOST Academy (India) Private Limited, holding that once debt and default are established, objections based on reputational impact cannot defeat admission.

A coram of Judicial Member Vinay Goel rejected the academy's contention that initiation of CIRP would adversely affect its international standing.

“If the insolvency process is initiated against the respondent, it would have a negative impact on its image in the international market. Having considered the submission made on behalf of the Respondent, this Adjudicating Authority is of the opinion that such a defence is not tenable once debt and default are established," the tribunal observed.

IMOST Academy, a privately run educational institution in Ernakulam, had approached Axis Bank in 2019 seeking financial assistance to procure land, construct buildings, and acquire equipment for setting up a training institute.

The bank sanctioned a term loan of Rs.6.5 crore and a working capital facility of Rs.75 lakh, and later extended additional facilities under the Emergency Credit Line Guarantee Scheme between 2020 and 2022.

Following defaults and an acknowledgment of liability on June 20, 2024, the loan account was classified as a non-performing asset on June 29, 2024. The bank issued recall notices seeking repayment.

As on February 22, 2026, the outstanding default stood at Rs.5.70 crore. With no repayment forthcoming, Axis Bank moved the Tribunal under Section 7 of the Insolvency and Bankruptcy Code.

Opposing the plea, the corporate debtor argued that Axis Bank had already initiated insolvency proceedings against its corporate guarantor, Euro Tech Maritime Academy Private Limited, for the same debt and had failed to disclose this fact. It contended that the present petition was therefore liable to be rejected for suppression of material facts.

Rejecting the objection, the tribunal held that the liability of the borrower and guarantor is joint, several, and coextensive, and that a financial creditor is entitled to proceed against either or both.

Finding that Axis Bank had established the existence of financial debt and default, the tribunal admitted the petition, imposed a moratorium, and appointed AAA Insolvency Professionals LLP as the Interim Resolution Professional.

For Petitioner: Advocate Irshan Ravindran

For Respondent: Advocate Aravind Sreekumar