Case Overview

This order pertains to an application filed by The South Indian Bank Limited (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016 against M/s Royal Dry Fruits Private Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP).

The financial relationship commenced in 2016 when the Corporate Debtor availed multiple credit facilities aggregating ₹9.90 crore from the Financial Creditor, including Cash Credit Open Loan (₹3.90 crore), Term Loan (₹2.00 crore), and Import Letter of Credit (₹4.00 crore). These facilities were subsequently renewed and enhanced over the years, with additional facilities including a Working Capital Term Loan under ECLGS scheme of ₹95.97 lakh sanctioned in January 2022.

The Corporate Debtor provided security through personal guarantees of promoters Mr. Sameer Abdulhusein Lalani and Mrs. Heena Lalani, and equitable mortgages of two properties: Flat No. 1802, 18th Floor, Adhara Building, Pune (carpet area 316.19 sq.mts) and Flat No. 4, Asiya Manor CHS, Bandra West, Mumbai (carpet area 350 sq.ft).

The account was classified as NPA on 29.07.2024 with a total default amount of ₹9,95,60,745.61 (principal ₹7,01,55,646.00 + interest). The Financial Creditor issued loan regularisation notice (06.08.2024), recall notice (14.08.2024), and SARFAESI notices under Section 13(2) before filing this application on 28.07.2025.

During pendency of the application, the Financial Creditor auctioned the mortgaged properties: the Pune property was sold for ₹5.27 crore on 20.08.2025 and the Mumbai property for ₹1.47 crore on 10.09.2025, realizing total proceeds of ₹6.74 crore. After appropriating ₹1.54 crore towards Mrs. Heena Lalani's housing loan, the remaining ₹5.20 crore was adjusted against the Corporate Debtor's dues.

The Corporate Debtor contested the application on grounds of alleged suppression of auction details, undervaluation of properties, pendency of Securitization Application (SA 90/2026) before DRT challenging the SARFAESI sale, and disputed quantum of debt. The Tribunal rejected these objections, citing established legal principles that allow parallel proceedings under IBC and SARFAESI.

Final Outcome

The Tribunal admitted the application under Section 7(5) of IBC, finding:

  • Financial debt existence and default clearly established
  • Outstanding amount well above ₹1 crore threshold even after SARFAESI recoveries
  • Application complete and within limitation from default date of 29.07.2024
  • All procedural requirements satisfied

Corporate Insolvency Resolution Process commenced against Royal Dry Fruits Private Limited with immediate moratorium under Section 14 of IBC. CA Siddhant Vinod Agrawal (IBBI/IPA-001/IP-P-02832/2023-2024/14370) appointed as Interim Resolution Professional. Financial Creditor directed to pay ₹3,00,000 advance to IRP for CIRP costs.

Topics: Corporate Insolvency, Debt Recovery, Banking NPA