Authority: National Company Law Tribunal, Mumbai Bench-VI (Shri Nilesh Sharma, Member Judicial and Shri Sameer Kakar, Member Technical)

Order Date: 10 July 2026

Case Overview

The operational creditor, Mr. Sachin Mahadeo Bhintade (Sole Proprietor of Gurudatta Enterprises), filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 on 16 October 2025 seeking initiation of Corporate Insolvency Resolution Process (CIRP) against ISG Hospitality Services Private Limited (Corporate Debtor). The applicant, engaged in trading fruits and vegetables, supplied goods to the corporate debtor, which provides industrial catering services, during the period from 10 April 2023 to 12 August 2024. The corporate debtor failed to make payments against invoices totaling ₹1,34,30,243 (One Crore Thirty-Four Lakhs Thirty Thousand Two Hundred Forty-Three Rupees), with the date of default determined as 28 August 2024. The applicant issued multiple payment reminders on 31 December 2024 and 7 February 2025, followed by a formal demand notice under Section 8 of the Code on 2 June 2025, which was delivered to but not replied to by the corporate debtor. The corporate debtor admitted the debt but cited temporary financial constraints and adverse business circumstances as reasons for non-payment, arguing that the Code should not be used as a debt recovery mechanism. The tribunal examined the documents including invoices, communication records, demand notice, and NeSL Form-C record of default, and found that the corporate debtor had not raised any pre-existing dispute regarding the quality, quantity, or pricing of goods supplied.

Final Outcome

The tribunal admitted the insolvency application and initiated CIRP against ISG Hospitality Services Private Limited. A moratorium was declared under Section 14 of the Code, prohibiting: (a) institution or continuation of legal proceedings against the corporate debtor; (b) transfer or disposal of assets; (c) enforcement of security interests; and (d) recovery of property by owners/lessors. The moratorium will remain effective until completion of CIRP, approval of a resolution plan, or liquidation order. KDRA Insolvency Professionals Private Limited (Registration No. IBBI/IPE-0059/IPA-1/2022-23/50037) was appointed as Interim Resolution Professional. The operational creditor was directed to deposit ₹3,00,000 with the IRP to meet initial CIRP costs, which will be treated as interim finance and repaid from available funds. The IRP must make public announcements, submit monthly progress reports, and issue notices to all statutory authorities within 7 days. Management of the corporate debtor vests with the IRP, and officers are directed to provide full assistance.

Topics: Corporate Insolvency, Operational Debt Default, Moratorium Declaration