The Ahmedabad Bench of the National Company Law Tribunal (NCLT) has admitted the petition filed by CFM Asset Reconstruction Private Limited against M/s Capbridge Venture LLP and commenced the Corporate Insolvency Resolution Process, holding that the statutory requirements of Section 7 stood fully established. The Tribunal held that the remedies under the SARFAESI Act and the IBC operate in different fields, and that the provisional attachment of the secured asset by the Directorate of Enforcement under the PMLA does not extinguish the Financial Debt or the occurrence of default, although it may have implications during the CIRP.
The Tribunal applied the well-settled principle that once the Adjudicating Authority is satisfied regarding the existence of a Financial Debt and the occurrence of default, the petition under Section 7 deserves admission. The Bench referred to judgments of Supreme Court in Innoventive Industries Ltd. v. ICICI Bank [(2018) 1 SCC 407], to hold that the statutory requirements of Section 7 stood fully established in the present case. The decision in Vidarbha Industries Power Ltd. v. Axis Bank [(2022) 8 SCC 352], which was relied upon by the Respondent, was distinguished on facts, with the Bench holding that it did not assist the Respondent because the Financial Debt and the default stood duly established by the loan documents, Statements of Account, and the Information Utility record.
The Tribunal reaffirmed that a corporate person who owes a debt falls within the definition of a Corporate Debtor under Section 3(8) of the Code, and that the liability of a co-borrower is sufficient to invoke Section 7. The Bench also reiterated that the IBC is not a recovery mechanism, but the existence of alternative remedies does not bar the maintainability of a Section 7 petition once the statutory ingredients are satisfied.
The Coram comprising Shammi Khan (Judicial Member) and Sanjeev Sharma (Technical Member) observed that the loan documents clearly disclosed the Respondent as a borrower owing liability under the loan transactions, and therefore the co-borrower objection was unsustainable. The Bench noted that the variation between the default dates of 4 July 2025 and 3 August 2025 was inconsequential because the second facility was only a top-up loan, and the NPA classification date of 4 July 2025 had been consistently disclosed in Form-1 and supported by the material on record.
The Tribunal further observed that the Applicant derived its rights under the Deed of Assignment dated 31 March 2026, which had been duly communicated to the Respondent, and that the remedies under the SARFAESI Act and the Insolvency and Bankruptcy Code operate in different fields, with the initiation of statutory recovery measures not precluding proceedings under Section 7. The Bench also held that the provisional attachment by the Enforcement Directorate under the PMLA did not extinguish the Financial Debt or the occurrence of default, although it might have implications during the CIRP.
Briefly, the dispute traces back to a Loan Against Property facility of Rs. 25 crores sanctioned by Poonawalla Fincorp Limited in favour of the Corporate Debtor and its co-borrowers on 28 December 2023, followed by a top-up loan of approximately Rs. 25.03 crores sanctioned on 19 December 2024. The Corporate Debtor and co-borrowers executed the loan and security documents and created an equitable mortgage over a high-value apartment in The Camellias, Gurugram. The first instalment fell due on 5 January 2025, and the borrowers defaulted in repayment, leading to the loan account being classified as a Non-Performing Asset on 4 July 2025.
Following the NPA classification, the Original Lender issued a demand notice under Section 13(2) of the SARFAESI Act on 8 July 2025 and a possession notice under Section 13(4) on 9 September 2025. Before possession could be taken, the Directorate of Enforcement provisionally attached the mortgaged property under the Prevention of Money Laundering Act, 2002. Subsequently, the entire financial debt along with underlying rights and securities was assigned by Poonawalla Fincorp to CFM Asset Reconstruction by way of a Deed of Assignment dated 31 March 2026, and the assignment was communicated to the Corporate Debtor on 19 May 2026. The Applicant claimed a total outstanding of Rs. 58.55 crores as on 31 May 2026, comprising Rs. 46.67 crores towards principal and Rs. 11.88 crores towards penal interest and other charges.
