Pranav B Prem

The National Company Law Tribunal (NCLT), Kolkata Bench, comprising Bidisha Banerjee (Judicial Member) and Siddharth Mishra (Technical Member), has admitted a Section 7 petition filed by IDBI Bank Limited against Jain Infraprojects Limited, while simultaneously granting the Corporate Debtor a two-month period to settle dues with the financial creditor.

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IDBI Bank had filed the petition for default exceeding ₹1072 crores as of July 1, 2023. The Corporate Debtor challenged the maintainability of the petition, arguing that the debt claimed was inflated. According to the Corporate Debtor, the original liability was only ₹162.44 crores, and the bank had repeatedly entered into One-Time Settlement (OTS) arrangements which reset the date of default. It was contended that by entering into successive settlements, including OTS proposals in 2019, 2023, and 2024, the original 2013 default could no longer be relied upon. The debtor further highlighted that seven out of eleven consortium banks had already been fully settled with, and No-Dues Certificates had been issued.

The Corporate Debtor placed reliance on judgments such as Hero Fincorp Limited v. Feedback Power Operations & Maintenance Services Pvt. Ltd. and IFCI Ltd. v. Patil Construction and Infrastructure Pvt. Ltd., where tribunals had recognized that fresh OTS arrangements could reset the default date, and that misuse of the IBC as a recovery mechanism must be avoided. It also alleged that IDBI Bank had acted in bad faith by misleading the tribunal on March 25, 2025, that the settlement had failed, even though the OTS was formally rejected only on April 15, 2025. The debtor had already paid nearly ₹10 crores under these settlement attempts, but IDBI allegedly refused to allow sale of mortgaged properties, thereby frustrating repayment efforts.

IDBI Bank, however, pressed for admission, maintaining that the outstanding dues were substantial and continuing in default. The tribunal noted that while the debtor had demonstrated intent to settle with other consortium members, the dues owed to IDBI remained very large. Importantly, the tribunal found that the creditor’s counsel had incorrectly represented that the OTS was rejected on April 3, 2025, leading to premature reservation of orders, whereas the rejection took place only on April 15, 2025.

Referring to the Supreme Court’s ruling in Vidarbha Industries v. Axis Bank, the tribunal reiterated that admission under Section 7 of the IBC is discretionary rather than automatic. Although the “Vidarbha effect” may have been diluted over time, it has not been overruled. On this basis, the tribunal admitted the petition but simultaneously allowed the Corporate Debtor a two-month window to settle dues with IDBI Bank and seek recall of the admission order if a settlement is reached.

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In conclusion, the tribunal balanced the mandatory consequences of default with the settlement efforts of the Corporate Debtor. While it admitted the insolvency petition, it left the door open for resolution through negotiation, underscoring the need to use IBC proceedings for revival rather than as a mere recovery mechanism.

Appearance

For Applicant: Mr. Joy Saha, Sr. Adv. ,Mr. Snehasish Chakraborty, Adv.

For Corporate Debtor: Mr. Jishnu Saha, Sr. Adv. Ms. Manju Bhuteria, Sr. Adv. ,Mr. Tanay Agarwal, Adv. Mr. Ram Maroo, Adv.

Cause Title: IDBI Bank V. Jain Infraprojects Limited

Case No: IA(I.B.C)/999(KB)2025 in CP (IB) No.175(KB)/ 2023

Coram: Bidisha Banerjee (Judicial Member), Siddharth Mishra (Technical Member)