NCLT Bengaluru Admits HSBC’s ₹10.37 Crore Insolvency Plea Against Mahara Pushya Agri; CIRP Initiated Despite Failed Settlement

Key Facts and Tribunal Findings

The National Company Law Tribunal (NCLT), Bengaluru Bench, has admitted a Section 7 insolvency application filed by The Hongkong and Shanghai Banking Corporation Limited (HSBC) against Mahara Pushya Agri Products Private Limited, initiating the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor sought initiation of CIRP on account of default in repayment of ₹10.37 crore as on 28 February 2025. The Corporate Debtor had availed multiple credit facilities, including overdraft, working capital demand loan, guarantee facilities, and loan against property, aggregating to ₹11.80 crore, later reduced to ₹10 crore under a renewal facility.

The Tribunal noted that the Corporate Debtor executed various security documents, including hypothecation agreements, lien arrangements, and personal guarantees. The account was classified as a Non-Performing Asset (NPA) on 16 June 2024 following continued default despite repeated demand notices. The record further revealed that the parties had entered into a settlement agreement in September 2025, acknowledging liability of over ₹10.84 crore and agreeing to settle the dues for ₹6 crore in instalments. However, the Corporate Debtor failed to make any payment under the settlement, despite multiple opportunities granted by the Tribunal.

The Corporate Debtor neither filed objections nor appeared during subsequent hearings, and the matter proceeded ex parte. The Tribunal relied on financial documents, statements of account, and record of default from NeSL to conclude that financial debt and default were established. The petition was held to be complete and within limitation.Accordingly, the application was admitted, moratorium under Section 14 was declared, and Ms. Anuja Sudhir Bhate was appointed as Interim Resolution Professional (IRP).

Legal Analysis

The Tribunal reaffirmed that for admission under Section 7 of the Insolvency and Bankruptcy Code, the Financial Creditor must establish existence of financial debt and occurrence of default, both of which were satisfied through documentary evidence and admitted liability. The order also highlights that failure to honour settlement terms does not bar insolvency proceedings and may reinforce the creditor’s case. The Tribunal’s reliance on NeSL records and executed security documents underscores their evidentiary significance in insolvency admission.

The decision reflects strict adherence to the summary admission framework under the Code, particularly where the Corporate Debtor remains unresponsive and defaults remain undisputed.