NCLT Mumbai Admits Authum Investments’ Section 7 Insolvency Plea Against RPL Sunlight Power
NCLT Mumbai Admits Authum Investments’ Section 7 Insolvency Plea Against RPL Sunlight Power
Introduction
The Mumbai Bench of the National Company Law Tribunal admitted a Section 7 application filed by Authum Investments & Infrastructure Limited against RPL Sunlight Power Private Limited after holding that the financial debt and default were clearly established through documentary evidence and the claim was within limitation.
Factual Background
RPL Sunlight Power Private Limited had availed two working capital facilities in 2018 from Reliance Home Finance Limited aggregating to ₹147 crore, carrying interest at 13.5% per annum on a bullet repayment basis. The first facility of ₹100 crore was sanctioned in March 2018, followed by a second facility of ₹47 crore in August 2018. The corporate debtor defaulted in repayment upon the respective due dates in March and August 2019. Thereafter, a recall notice dated 31 July 2023 was issued demanding repayment of more than ₹77 crore, but no payment was made. In the meanwhile, the lending business of RHFL was transferred to Reliance Commercial Finance Limited through a slump sale, which later merged into Authum Investments & Infrastructure Limited under a scheme sanctioned by the NCLT.
Procedural Background
Authum Investments filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the NCLT Mumbai. In support, it placed on record the loan agreements, account statements, and National e-Governance Services Limited (NeSL) records reflecting a “deemed to be authenticated” default. The applicant also relied on the corporate debtor’s audited financial statements for FY 2021–22, which acknowledged the outstanding dues. Despite service of notice, the corporate debtor failed to appear, and the matter proceeded ex parte.
Issues
1. Whether the applicant had established the existence of a financial debt under Section 5(8) of the IBC.
2. Whether the occurrence of default exceeding the statutory threshold was proved.
3. Whether the Section 7 application was within limitation in light of acknowledgments in the balance sheets.
Contentions of Parties
The financial creditor contended that the facilities clearly constituted financial debt as money was borrowed against payment of interest. It further argued that the default was established by loan documents, account statements, NeSL records, and the corporate debtor’s own balance sheet acknowledgments, which also extended limitation. Since the corporate debtor remained absent despite service, no defence was advanced on its behalf.
Reasoning and Analysis
The Bench comprising Judicial Member Nilesh Sharma and Technical Member Sameer Kakar
found that the loan transactions squarely fell within the ambit of Section 5(8)(a) as they involved disbursal of money against consideration for time value in the form of interest. The default was supported by clear documentary evidence, including the recall notice, account statements, and NeSL authentication records. On limitation, the Bench relied on the Supreme Court’s decision in Dena Bank v. C. Shivakumar Reddy and held that the acknowledgment of liability in the corporate debtor’s audited balance sheet for FY 2021–22 extended the limitation period by another three years. Since the application had been filed within this extended period, it was held to be maintainable. The Tribunal also noted that the respondent had chosen not to appear, leaving the creditor’s evidence unrebutted.
Decision
The NCLT admitted the Section 7 application, commenced CIRP against RPL Sunlight Power Private Limited, declared moratorium under Section 14, and appointed NPV Insolvency Professionals Private Limited as the Interim Resolution Professional. The financial creditor was also directed to deposit ₹3 lakh towards the initial CIRP expenses.
In this case the appellant was represented by Adv. Siddha Pamecha, Adv. Mr.Nehal Rajput i/b Thodur Law Associates.
