NCLT Initiates Insolvency Against Supreme Engineering Over Rs 117.50 Crore Debt
On June 27, the National Company Law Tribunal (NCLT) admitted a Corporate Insolvency Resolution Process (CIRP) against Navi Mumbai-based Supreme Engineering Limited. The order was passed following a petition filed by the Bank of India over an outstanding financial debt of more than Rs 117.50 crore.
The NCLT bench, comprising Judicial Member Nilesh Sharma and Technical Member Sameer Kakar, admitted the Section 7 petition under the Insolvency and Bankruptcy Code (IBC). The tribunal held that the bank had successfully established the existence of both the financial debt and the subsequent default.
As part of the ruling, the tribunal also dismissed an interlocutory application filed by Supreme Engineering Limited that sought a stay on the insolvency proceedings.
According to the tribunal's order, Bank of India claimed that Supreme Engineering had defaulted on credit facilities aggregating nearly Rs 98.17 crore. The total outstanding amount grew to Rs 117.50 crore as of March 2, 2025. The bank had classified the company's account as a non-performing asset (NPA) in August 2021 following repeated defaults.
During the proceedings, the NCLT observed that Supreme Engineering had repeatedly acknowledged its liability. The company had submitted multiple one-time settlement (OTS) proposals to the bank between July 2023 and February 2025, which extended the limitation period under Section 18 of the Limitation Act.
Supreme Engineering had argued that separate proceedings against its personal guarantors under Section 95 of the IBC triggered an interim moratorium, which should prevent action against the corporate debtor. However, the tribunal rejected this argument, ruling that the interim moratorium under Section 96 applies solely to personal guarantors and does not bar insolvency proceedings against the principal borrower.
The NCLT noted that its primary role at this stage of a time-bound admission is to verify whether a default has occurred based on the records and evidence. It concluded that a debt exists, a default occurred, and the debt remains within the limitation period while exceeding the threshold prescribed under Section 4 of the IBC, 2016.
