NCLT Bengaluru Admits Insolvency Against BNH Infra Projects On ₹11.3 Crore Loan Default In Canara Bank's Plea

The Bengaluru Bench of the National Company Law Tribunal (NCLT) on March 16 admitted insolvency proceedings against BNH Infra Projects India Pvt. Ltd. over a loan default of about Rs 11.3 crore, after Canara Bank claimed total outstanding dues of over Rs 64 crore.

A coram comprising Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada noted that the respondent was proceeded ex parte due to failure to appear and comply with the tribunal's directions, observing that there was conscious abstention on the part of the respondent.

BNH Infra Projects India Pvt. Ltd. is a construction company incorporated in 2007, with its registered office at Shanthi Nagar, Bengaluru. According to the application, multiple credit facilities were sanctioned to the Corporate Debtor in the form of overdraft, Working Capital Term Loan under Guaranteed Emergency Credit Line (GECL), GECL Extension, and term loan facilities.

The total sanctioned facilities aggregated to Rs. 54.79 crore, secured through hypothecation agreements, mortgage by deposit of title deeds, personal guarantees, and a corporate guarantee. The company, however, failed to adhere to the repayment obligations under the loan agreements. Consequently, the loan account was classified as Non-Performing Asset (NPA) on 27 March 2024.

As per the statement of account placed on record by the Financial Creditor, the total outstanding amount stood at Rs. 64,30,48,821.77 as on 28 February 2025, along with further interest and charges.

The tribunal recorded that notice of the petition was duly served on the Corporate Debtor through hand delivery, email, and registered post. The company initially appeared through counsel and sought time to file objections; however, it failed to file vakalathnama or any reply, did not deposit the cost that had been imposed, and remained absent thereafter. The matter was accordingly proceeded ex parte.

The tribunal noted that in order to initiate the Corporate Insolvency Resolution Process (CIRP), the Financial Creditor is required to establish the existence of financial debt and the occurrence of default in repayment of such financial debt. The Bench held that,

“The FC has placed on record the sanction letters, loan documents, hypothecation agreements, guarantees, statement of accounts and record of default with the Information Utility, which establish the existence of financial debt and the default committed by the CD. The debt is reflected even in the index of charges in the MCA master data printed on 06.02.2025, sometime around the date of filing of this petition.”

The bench further held that the plea was well within limitation.

“The account of the CD was declared NPA on 27.03.2024, and the default amount claimed is above the threshold prescribed under the Code. The present petition has been filed on 09.04.2025, which is well within the period of limitation. Thus, the FC has successfully established the existence of financial debt and the occurrence of default within the meaning of Section 7 of the Code.”

Accordingly, the tribunal admitted the company into the Corporate Insolvency Resolution Process (CIRP) for default of Rs. 11,31,33,234.50.

It declared a moratorium under Section 14 of the Code and appointed Shirley Mathew as the Interim Resolution Professional (IRP). The Financial Creditor was also directed to deposit a sum of Rs 2 lakh in advance to meet the initial expenses of the Corporate Insolvency Resolution Process.