NCLT Mumbai Admits Authum Investments' Insolvency Petition Against RPL Sunlight Power

The Mumbai Bench of the National Company Law Tribunal (NCLT) on 26 March, admitted a Section 7 application under the Insolvency and Bankruptcy Code, 2016, filed by Authum Investments & Infrastructure Limited (erstwhile Reliance Commercial Finance Limited) against RPL Sunlight Power Private Limited.

A Bench comprising Judicial Member Nilesh Sharma and Technical Member Sameer Kakar initiated the Corporate Insolvency Resolution Process (CIRP) after finding that the Financial Creditor had established the existence of a financial debt and the default exceeding the statutory threshold. They held:

“the Applicant has successfully demonstrated the existence of a financial debt as the transaction involves money borrowed against the payment of interest under section 5(8)(a) of IBC 2016, the occurrence of default which is way above the threshold as stipulated under Section 4 of the Code, & continuing nature of such default supported by clear documentary evidence.”

RPL Sunlight Power Private Limited, incorporated in 2015 with its registered office in Mumbai, availed two working capital facilities from Reliance Home Finance Limited (RHFL) in 2018. RHFL sanctioned facilities of Rs. 100 crore and Rs. 47 crore in March and August 2018 respectively at an interest rate of 13.5% per annum on a bullet repayment basis.

The Corporate Debtor defaulted on repayment in March and August 2019. The Financial Creditor later issued a loan recall notice dated 31 July 2023 demanding payment of outstanding dues exceeding Rs. 77 crore, but the Corporate Debtor did not make any repayment.

In 2023, Reliance Commercial Finance Limited (RCFL) acquired the business undertaking of RHFL on a slump sale and going concern basis along with assignment of the relevant loan accounts. RCFL subsequently merged with Authum Investments & Infrastructure Limited under a Scheme of Arrangement approved by the NCLT on 10 May 2024, transferring the lending business to the present Financial Creditor.

Before the Tribunal, Authum Investments relied on the loan agreements, statements of accounts and records from National e-Governance Services Limited (NeSL), which reflected a “DEEMED TO BE AUTHENTICATED” default. The Applicant also pointed out that the Corporate Debtor acknowledged the outstanding liability in its audited financial statements for FY 2021-22, thereby extending the limitation period.

Despite service of notice, the Corporate Debtor did not appear before the Tribunal, and the Bench proceeded against it ex parte.

Relying on the Supreme Court judgment in Dena Bank v. C. Shivakumar Reddy, the Tribunal observed:

“This Tribunal is of the opinion that the debt involved herein is well within the limitation period as the acknowledgement in Balance Sheets extends the limitation period by another 3 years and that the Application is filed within the limitation.”

The Tribunal admitted RPL Sunlight Power Private Limited into the Corporate Insolvency Resolution Process, declared a moratorium under Section 14 of the Code and appointed NPV Insolvency Professionals Private Limited (erstwhile Mantrah Insolvency Professional Private Limited) as the Interim Resolution Professional. It also directed the Financial Creditor to deposit Rs. 3 lakh towards the initial CIRP expenses.

Accordingly, the Tribunal confirmed that the Corporate Debtor would now undergo the CIRP under the supervision of the appointed Interim Resolution Professional.

For Applicant: Adv. Siddha Pamecha, Adv. Mr.Nehal Rajput i/b Thodur Law Associates

For Respondent: Ex parte