NCLT Ahmedabad Admits Edelweiss ARC’s ₹13.11 Crore Insolvency Plea Against Fortune Assets Pvt Ltd

Key Facts and Tribunal Findings

The National Company Law Tribunal (NCLT), Ahmedabad Bench, has admitted a Section 7 application filed by Edelweiss Asset Reconstruction Company Limited against Fortune Assets Private Limited, initiating the Corporate Insolvency Resolution Process (CIRP) over a default of ₹13.11 crore. The Financial Creditor, acting as trustee of EARC Trust 453, filed the petition on 7 February 2026 for default in repayment of financial debt arising from two term loan facilities originally sanctioned by ECL Finance Limited. The loans, aggregating ₹400 crore, were extended in 2019 and subsequently assigned to the applicant through assignment agreements dated 25 June 2020 and 3 April 2023.

The Tribunal noted that the corporate debtor failed to maintain financial discipline and defaulted in repayment in March 2023, following which the account was classified as a non-performing asset (NPA). A loan recall notice dated 22 September 2023 and a subsequent notice under Section 13(2) of the SARFAESI Act were issued, but the dues remained unpaid. The total default amount as on 15 January 2026 stood at ₹13,11,27,85,247. The Financial Creditor relied on documentary evidence including loan agreements, security documents, assignment deeds, and records of default issued by the National e-Governance Services Limited (NeSL). The Tribunal observed that the record of default constituted valid evidence under Section 7(3)(a) of the Insolvency and Bankruptcy Code.

Despite valid service of notice, the corporate debtor failed to appear or contest the proceedings, and the matter was heard ex parte. The Tribunal held that the existence of financial debt and occurrence of default were clearly established, and the application satisfied the requirements under Sections 7(5) and 4 of the Code. Accordingly, the petition was admitted, a moratorium under Section 14 was declared, and ARCK Resolution Professionals LLP was appointed as the Interim Resolution Professional (IRP) to conduct the CIRP.

Legal Analysis

The Tribunal reaffirmed that at the admission stage under Section 7 of the Code, the scope of inquiry is limited to determining the existence of financial debt and default. It placed reliance on records from the Information Utility (NeSL), reiterating their evidentiary value in establishing default. The order also reflects settled jurisprudence that once debt and default are established through documentary evidence, admission of the application is mandatory. The Tribunal further noted that variations in dates of default across documents do not undermine the continuous nature of default.

The decision aligns with established principles laid down by the Supreme Court in Innoventive Industries Ltd. v. ICICI Bank Ltd., reinforcing the summary nature of proceedings under Section 7 and the primacy of documentary proof in insolvency admissions.