CIRP Initiated Against Neurostar Hospital Private Limited: NCLT Mumbai’s Section 7 Admission Analysed

Overview of the Insolvency Application

The National Company Law Tribunal, Mumbai Bench, admitted a Section 7 application under the Insolvency and Bankruptcy Code, 2016 (IBC) filed by Bank of India against Neurostar Hospital Private Limited. The matter culminated in the initiation of the Corporate Insolvency Resolution Process (CIRP) after the Tribunal was satisfied that a financial debt existed and that default had occurred.

The financial creditor sought commencement of CIRP in respect of the corporate debtor on account of unpaid dues aggregating ₹28,51,75,324.38, with:

  • Date of default: 28.02.2023
  • Account classified as NPA: 29.05.2023

The application, bearing C.P. (IB) No. 1031/MB/2025, was filed on 08.09.2025 under Section 7 IBC read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

Parties and Authorisation

  • **Financial Creditor (FC)😗* Bank of India, a scheduled bank and body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.
  • **Corporate Debtor (CD)😗* Neurostar Hospital Private Limited.

The application was affirmed on behalf of the financial creditor by Mr. Anil Kumar Srivastava, its authorised signatory, acting under a Power of Attorney dated 12.05.2016.

Sanctioned Credit Facilities and Security Structure

Nature and Quantum of Financial Debt

The corporate debtor had availed the following facilities from the financial creditor:

  1. Term Loan Facility

    • Amount sanctioned: ₹20.45 crore
    • Sanction letter dated: 13.03.2020
    • Documentation: Term Loan Agreement dated 08.09.2020

  2. Working Capital Term Loan (WCTL) under GECL Scheme

    • Amount sanctioned: ₹5.85 crore
    • Sanction date: 29.01.2022
    • Documentation: Supplemental Loan cum Hypothecation Agreement dated 29.01.2022

Together, the facilities aggregated to ₹26,30,00,000 disbursed to the corporate debtor.

Security and Collateral Documentation

To secure the above facilities, the corporate debtor executed multiple documents in favour of Bank of India, including:

  • Deed of Hypothecation dated 08.09.2020
  • Supplemental Loan cum Hypothecation Agreement dated 29.01.2022
  • Multipurpose Agreement
  • Deed of Guarantee dated 08.09.2020 executed by personal guarantors
  • Demand Promissory Notes dated 08.09.2020 and 29.01.2022
  • Memorandum of Oral Assent and Mortgage Deeds evidencing creation and extension of equitable mortgage
  • Affidavit-cum-Undertakings and Oral Assent for deposit of title deeds
  • Special Power of Attorney authorising the bank to create mortgage and complete registration formalities

Creation of Security Interest over Assets

The securities mentioned in the application included:

  1. Hypothecation of Plant & Machinery

    • Estimated distress sale value: ₹2,79,30,000

  2. Equitable Mortgage of immovable property

    • B-Wing Building of “Yash Towers” (multiple floors, basement godowns and parking)
    • Situated at Akurdi, Taluka Haveli, District Pune, within Pimpri Chinchwad Municipal Corporation limits
    • Covered by various C.T.S. and Survey Numbers and supported by registration records
    • Estimated distress sale value: ₹27,35,84,000

The charge details were supported through:

  • ROC charge reports
  • CERSAI registration records
  • Registered notice of intimation of mortgage (Index-II extracts and registration receipts)

Contractual Obligations and Repayment Terms

Disbursement of Loans

The records showed that:

  • Disbursement under the Term Loan commenced on 10.11.2020.
  • Disbursement under the Working Capital Term Loan under the GECL scheme began from 29.01.2022.

Certified account statements, filed along with a certificate under the Bankers’ Books Evidence Act, substantiated the flow of funds to the corporate debtor.

Repayment Schedule

  1. Term Loan

    • Repayment in 110 instalments
    • Instalments to commence after 9 months from first disbursement
    • Overall tenor: 119 months

  2. Working Capital Term Loan (GECL)

    • Repayment in 36 instalments
    • Monthly instalments: ₹18,19,714 each
    • Repayment commencement date: 31.01.2024

Acknowledgement of Debt

The corporate debtor, through a Letter of Acknowledgement of Debt/Securities dated 29.01.2022, expressly confirmed:

  • Outstanding dues of ₹19,45,02,733.26 as on 28.01.2022
  • Execution and continuation of security and mortgage documents in favour of Bank of India