NCLT Mumbai Admits Canara Bank's Insolvency Plea Against Supreme Housing Over ₹567 Crore Default

The National Company Law Tribunal (NCLT) at Mumbai on Wednesday admitted Canara Bank's Section 7 insolvency petition against Supreme Housing & Hospitality Private Limited over a default of ₹567.43 crore and initiated corporate insolvency resolution process (CIRP) against the company.

A Bench of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar observed:

“Accordingly, in our view, there exists a debt which is in default and the said debt is within limitation and exceeds the threshold prescribed under Section 4 of IBC, 2016. The present Application is complete, and as per the consent of the proposed IRP as placed on record, no disciplinary proceedings are pending against the said proposed IRP.”

The dispute arose from a Rs 390 crore term loan sanctioned by Canara Bank to Supreme Housing in March 2014 and disbursed in May 2014.

The bank stated that the company committed default from July 1, 2017, its account was classified as a non-performing asset on September 29, 2017, and outstanding dues stood at Rs 567.43 crore as on October 31, 2025.

Canara Bank submitted that earlier insolvency proceedings and multiple one-time settlement (OTS) arrangements failed after the corporate debtor repeatedly defaulted on payment commitments, including a ₹460 crore OTS accepted in June 2025.

The corporate debtor opposed the plea, arguing that insolvency proceedings initiated against its personal guarantors triggered an interim moratorium under Section 96 of the Insolvency and Bankruptcy Code (IBC), which barred the present Section 7 petition. It also contended that earlier defaults stood novated after acceptance of the OTS proposals.

Rejecting these objections, the tribunal held that the moratorium applicable to personal guarantors under Section 96 would not bar proceedings against the principal borrower company under Section 7.

The tribunal further held that the financial debt and default stood established from the loan documents, statements of account, balance sheet acknowledgments and settlement letters placed on record.

“It is also pertinent that the CD has, from time to time, acknowledged the debt through balance sheets, OTS proposals, and undertakings before judicial fora. Such conduct reinforces the existence of liability and default. At the same time, the repeated failure to honour settlement commitments, coupled with attempts to delay proceedings through multiple litigations, reflects a pattern which cannot be countenanced under the time-bound framework of the IBC”

Accordingly, the tribunal admitted the petition, declared a moratorium, and appointed KDRA Insolvency Professionals Private Limited as the Interim Resolution Professional.