NCLT Ahmedabad Admits CIRP Against Blu-Smart Mobility Over ₹1.28 Crore NCD Default
Pranav B Prem
The Ahmedabad Bench of the National Company Law Tribunal (NCLT), comprising Justice Shammi Khan (Judicial Member) and Mr. Sanjeev Kumar Sharma (Technical Member), has admitted Blu-Smart Mobility Ltd. into the Corporate Insolvency Resolution Process (CIRP) following a default of ₹1,28,02,195. The petition was filed by Catalyst Trusteeship Limited, acting as Financial Creditor in its capacity as the Debenture Trustee for holders of secured Non-Convertible Debentures (NCDs).
The financial creditor had filed the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), alleging that Blu-Smart Mobility Ltd., which operates a 100% electric four-wheeler ride-hailing platform, defaulted on payments due in relation to NCDs issued to meet its working capital requirements. The Corporate Debtor had issued 15 secured, redeemable, unrated, and unlisted NCDs valued at ₹15 crore under a Debenture Trust and Hypothecation Deed (DTHD) dated 24.04.2023. As per the terms of the deed, the Corporate Debtor was required to redeem the debentures in instalments over a period of 24 months.
The Financial Creditor alleged that the Corporate Debtor failed to pay the instalments that became due on 28.02.2025, 31.03.2025, and 30.04.2025. These missed payments constituted an “Event of Default” under the DTHD. In support of the claim, the Financial Creditor relied on Debenture Certificates, NeSL Form-D, and an email from the Corporate Debtor dated 10.04.2025 admitting its liability.
During the hearing, counsel for the Financial Creditor submitted that the Corporate Debtor's acknowledgment of liability, combined with the failure to meet redemption obligations, was sufficient to establish both the existence of financial debt and default. It was argued that the objections raised by the Corporate Debtor were not legally sustainable under the framework of the IBC. Reference was made to the judgment of the Supreme Court in Innoventive Industries Ltd. v. ICICI Bank [(2018) 1 SCC 407], which laid down the threshold standard of proof in Section 7 petitions.
On the other hand, the Corporate Debtor opposed the maintainability of the petition, arguing that the application was premature and filed with mala fide intent. It submitted that the defaults occurred due to a temporary financial crunch and therefore did not amount to a “default” as contemplated under Section 3(12) of the IBC. It also sought to rely on the pendency of SEBI proceedings and commercial negotiations with investors to argue that the matter did not warrant admission.
The Tribunal rejected the contentions of the Corporate Debtor, holding that financial difficulty or the pendency of regulatory proceedings cannot be grounds to avoid admission when default is otherwise established. It noted that the existence of debt and default was clearly proven through documentary evidence and the admission contained in the Corporate Debtor’s email dated 10.04.2025. The Bench observed that “the Corporate Debtor’s defences of temporary financial crunch and malicious intent lack evidentiary support and do not negate the debt and default prerequisite for initiation of CIRP.”
Further, the Tribunal dealt with the issue of different dates of default for different instalments. It held that technical objections based on such discrepancies do not defeat a Section 7 application. Relying on Dena Bank v. C. Shivakumar Reddy [(2021) 10 SCC 330], the Tribunal observed that so long as default is established for any part of the debt and it crosses the threshold requirement, admission under Section 7 must follow. Having found that the Financial Creditor had fulfilled its burden to prove financial debt and default, the Tribunal admitted the petition and ordered the commencement of CIRP against Blu-Smart Mobility Ltd.
Appearance
For the Applicant/F.C: Mr. Anmol A. Mehta, Advocate
For the Respondent/CD: Mr. Himanshu Dubey, Advocate.
Cause Title: Catalyst Trusteeship Limited V. Blu-Smart Mobility Limited
Case No: C.P.(IB)/205(AHM)2025
Coram: Justice Shammi Khan [Judicial Member], Mr. Sanjeev Kumar Sharma [Technical Member]
