NCLAT New Delhi Upholds Section 7 IBC Admission in Rajendra Narayan Panda vs Omkara Assets Reconstruction Private Limited
Case Overview
The National Company Law Appellate Tribunal (NCLAT), New Delhi, pronounced its judgment on 13 February 2026 in Company Appeal (AT) (Insolvency) No. 372 of 2025, arising from a challenge mounted by Rajendra Narayan Panda, the suspended director of Panda Technologies India Private Limited (the Corporate Debtor). The appeal targeted the order dated 21 January 2025 passed by the National Company Law Tribunal (NCLT), Indore Bench, in CP(IB) No. 40 (MP) 2022, through which the Adjudicating Authority had admitted the petition filed by Omkara Assets Reconstruction Private Limited (Financial Creditor and assignee of L&T Finance Limited) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The NCLAT dismissed the appeal, upheld the admission, and permitted the Corporate Insolvency Resolution Process (CIRP) to continue.
Background and Factual Matrix
Origin of the Financing Arrangement
In 2013, Panda Technologies India Private Limited approached L&T Finance Limited (then operating as L&T Fincorp Limited) for a short-term revolving financing facility intended to fund the purchase of industrial products from L&T Valves Limited. Pursuant to this request, L&T Finance Limited issued a sanction letter dated 17 July 2013, setting a maximum sanctioned limit of ₹1,50,00,000 (Rupees One Crore Fifty Lakhs) on a revolving basis, valid for one year. The key financial terms of the facility agreement dated 17 July 2013 were as follows:
| Parameter | Terms |
|---|---|
| Scheme | FINCORP VALFIN |
| Sanctioned Limit | ₹150 lakhs (Revolving, one year) |
| Tenure | 90 days from disbursement |
| Interest Rate | 13.75% p.a. for 90 days, payable monthly |
| Delayed Payment Charges | 91–120 days @ 16% p.a.; 121 days onwards @ 22% p.a. |
The Corporate Debtor issued a demand promissory note in favour of L&T Finance Limited, and disbursement was made directly to L&T Valves Limited as authorised under the facility terms.
Default and Assignment
The Corporate Debtor defaulted in repayments, and the account was classified as a Non-Performing Asset (NPA) on 11 June 2016. A demand notice was issued by L&T Finance Limited on 19 April 2017 seeking repayment of ₹67,19,390 along with further interest until realisation.
On 24 September 2019, L&T Finance Limited executed an assignment agreement in favour of Omkara Assets Reconstruction Private Limited, transferring the debt and all associated rights, title, and interest in the Corporate Debtor. Post-assignment, Omkara Assets Reconstruction Private Limited issued a loan recall notice dated 18 December 2021, calling upon the Corporate Debtor to discharge all outstanding liabilities.
Filing of Section 7 Petition
The Financial Creditor filed its petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 on 6 April 2022 (also referred to in certain parts of the record as 15 June 2022). The NCLT, Indore Bench, admitted the petition and commenced CIRP vide its order dated 21 January 2025. Thereafter, Rajendra Narayan Panda, in his capacity as suspended director, filed the present appeal before NCLAT.
Core Issues Before the Appellate Tribunal
Two principal questions fell for determination before the NCLAT:
- Whether the financial debt claimed by the Financial Creditor exceeded the statutory threshold of ₹1,00,00,000 (Rupees One Crore) prescribed under
Section 4of the Insolvency and Bankruptcy Code, 2016. - Whether the petition under
Section 7was barred by limitation.
Appellant's Submissions
On the Question of Threshold
The suspended director's primary argument was that the Financial Creditor's computation of the outstanding debt was fundamentally flawed. The specific contentions advanced were:
- The principal amount as reflected in the Form 1 application under
Section 7was stated as ₹64,33,286, against which interest of ₹76,07,249 was claimed, bringing the aggregate to ₹1,40,40,535. This figure was disputed as incorrect and defective. - According to the audited balance sheets of the Corporate Debtor, the outstanding figures were: ₹48,01,648.43 as at 31 March 2017; ₹40,06,309.79 as at 31 March 2018; ₹40,06,309.79 as at 31 March 2019; and ₹40,06,309.79 as at 31 March 2020.
- The sanction letter dated 17 July 2013 did not contemplate payment of interest beyond the 90-day tenure. Beyond 90 days, the contractual mechanism was "Delayed Payment Charges" and not "interest." The legal notice dated 19 April 2017 also expressly used the terminology "Delayed Payment Charges," not interest.
- Clause 1.5.7 of the Facility Agreement provided that interest would be computed on a 365-day year basis, and there was no contractual basis for monthly compounding of interest.
- Clause 1.5.2 of the Facility Agreement (Summary Schedule) prescribed interest at 13.75% p.a. for 90 days only, with no provision for interest beyond the 90-day period. The Delayed Payment Charges were applicable at 16% p.a. for 91–120 days and 22% p.a. thereafter on the defaulted amount for the period of default.
- The assignment agreement dated 24 September 2019 recorded the amount assigned as ₹63,04,190 (including interest), thereby establishing that the total outstanding as on the date of assignment was only ₹63,04,190, which itself was below the threshold.
- When delayed payment charges at 22% p.a. were computed on the assigned principal of ₹40,06,310 from the date of assignment (24 September 2019) to the date of filing (4 April 2022), the charges amounted to ₹22,03,470 only, and when added to the principal, the aggregate came to ₹62,09,780, which fell below the ₹1 crore threshold.
The Appellant also presented ledger-based calculations reflecting the following delayed payment charge computation: