NCLT Mumbai Admits Section 7 Petition in Authum Investment & Infrastructure Ltd. v. RPL Sunlight Power Pvt. Ltd.

The National Company Law Tribunal, Mumbai Bench (Court VI), in its order dated 26 March 2026, admitted a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by Authum Investment and Infrastructure Limited against RPL Sunlight Power Private Limited, reaffirming the limited scope of judicial scrutiny at the admission stage and the decisive role of financial debt and default.

Financial Debt, Default, and Limitation

The Financial Creditor sought initiation of CIRP for a default amount exceeding ₹409 crore arising from working capital loan facilities originally sanctioned by Reliance Home Finance Limited in 2018 and subsequently assigned to the applicant. The loans were disbursed in two tranches of ₹100 crore and ₹47 crore, with repayment structured as bullet payments at the end of tenure. The Corporate Debtor failed to service the debt upon maturity, leading to defaults in March and August 2019. The Tribunal relied on documentary evidence including loan agreements, statements of account, and NeSL records, where the default status was recorded as “deemed authenticated.” It further noted that the Corporate Debtor had acknowledged the outstanding liabilities in its audited financial statements for FY 2021–22. Relying on Dena Bank v. C. Shivakumar Reddy, the Tribunal held that such acknowledgment constitutes a valid extension of limitation under Section 18 of the Limitation Act, rendering the petition filed in March 2024 well within limitation.

The Corporate Debtor failed to appear despite service of notice and was proceeded against ex parte, further strengthening the evidentiary position of the Financial Creditor.

Tribunal Reasoning and Legal Consequences

Applying the settled law in Innoventive Industries v. ICICI Bank and subsequent Supreme Court jurisprudence, the Tribunal reiterated that the Adjudicating Authority is only required to ascertain the existence of a financial debt and default. It emphasized that issues relating to commercial viability or ability to repay are irrelevant at the admission stage. The Tribunal also clarified the interplay between Innoventive and Vidarbha Industries, noting that the latter does not dilute the general rule of mandatory admission upon proof of default, except in fact-specific scenarios. The decision further reaffirmed that disputes or restructuring proposals do not negate default unless legally extinguishing the debt.

Upon satisfaction of the statutory requirements, the Tribunal admitted the application and declared moratorium under Section 14, prohibiting institution of proceedings, enforcement of security interests, and transfer of assets. An Interim Resolution Professional was appointed, and directions were issued for public announcement, claim collation, and transfer of management to the IRP. The ruling reinforces the summary nature of Section 7 proceedings and underscores that once financial debt and default are established through credible evidence, admission of CIRP is a legal consequence rather than a matter of discretion.