NCLT starts CIRP against Millennium Starch India Pvt. Ltd. on Axis Bank’s Section 7 application

The National Company Law Tribunal, Bengaluru Bench, has ordered commencement of Corporate Insolvency Resolution Process (CIRP) against Millennium Starch India Private Limited on a petition filed by Axis Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Tribunal concluded that a financial debt existed and that the Corporate Debtor had committed default to the tune of ₹39.19 crore, thereby satisfying the statutory requirements for admission.

The order also imposes a moratorium under Section 14, appoints an Interim Resolution Professional (IRP), and suspends the Board of Directors of the Corporate Debtor.

Background of parties and financing arrangement

Axis Bank, a banking company registered under the Companies Act, 2013 and regulated by the Banking Regulation Act, had extended credit facilities to Millennium Starch India Private Limited, a company incorporated on 11.04.2008 under the Companies Act, 1956 and engaged in manufacture and trading of modified starch and industrial starch products, with registered office in Belgaum, Karnataka.

Sanction of credit facilities

The Corporate Debtor approached the Financial Creditor for working capital and term finance. Based on this request, Axis Bank sanctioned credit facilities under a Multiple Banking Arrangement dated 19.05.2022:

• Aggregate sanction: ₹40 crore
  • Open Cash Credit facility: ₹25 crore
  • Term Loan facility: ₹15 crore

To operationalise these facilities, the Corporate Debtor executed a suite of finance and security documents in favour of the Bank on 19.05.2022, including:

• Term Loan Agreement
• Working Capital Facility Agreement
• Deed of Hypothecation
• Deed of Guarantee and Undertaking
• Beneficial Ownership declarations
• Disbursement Request
• List of Directors
• Receipt of Documents
• Debit Authorization
• Connected Lending documentation
• Letter of Pledge
• Memorandum of deposit of title deeds executed among the Corporate Debtor, Cosmos Cooperative Bank Limited and Axis Bank

These documents collectively recorded the terms of lending, security creation and guarantees backing the facilities.

Emergence of default and classification as NPA

According to Axis Bank, after enjoying and utilising these facilities, the Corporate Debtor failed to adhere to the agreed repayment and interest servicing obligations:

• Date of initial default: 28.02.2024 (non-servicing of interest and repayment)
• Consequent classification of the loan account as Non-Performing Asset (NPA) with effect from 31.05.2024

Recall notices and SARFAESI proceedings

Post default, the Bank escalated recovery steps:

1. Loan recall notice AXIS/SAG/SC/2023-24 dated 09.07.2024 calling upon the Corporate Debtor to pay an outstanding amount of ₹37,68,26,549/-.
2. Notice AXISB/SAG/SS/2024-25/67 dated 26.08.2024 issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002) for ₹37,08,60,585.16.

Despite these notices, the Bank asserted that no meaningful repayment followed and the outstanding defaulted amount as on the petition date stood at ₹39,19,66,380.76, prompting filing of the Section 7 application before NCLT.

Axis Bank’s case under Section 7 IBC

Core assertions by the Financial Creditor

Axis Bank’s petition under Section 7 of the Insolvency and Bankruptcy Code, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, was premised on the following:

• A financial debt of ₹40 crore was duly sanctioned and disbursed under the Multiple Banking Arrangement.
• The Corporate Debtor availed and utilised the facilities.
• Default occurred on 28.02.2024, followed by NPA classification on 31.05.2024.
• The amount in default as claimed is ₹39,19,66,380.76.
• Detailed documentary evidence was filed, including:
  • Sanction letters
  • Facility and security agreements
  • Statements of account with certificates under the Bankers’ Books Evidence Act, 1891
  • Recall notices and SARFAESI Section 13(2) notice
  • Record of default and NeSL report (for one of the facilities)

The Bank argued that, once existence of financial debt and occurrence of default are demonstrated, the Adjudicating Authority is bound to admit the petition, relying on the principle laid down in Innoventive Industries Ltd. v. ICICI Bank Ltd., (2018) 1 SCC 407.

Response to technical objections

In its rejoinder, Axis Bank addressed the objections raised by the Corporate Debtor:

1. Service under Rule 4(3):

   • The Bank pointed out that the petition had been served through email dated 08.11.2024.
   • Subsequently, the petition was uploaded on the IBBI portal on 28.04.2025 and a notice number generated.
   • Placing reliance on Lakshmi Engineering Industries (Bhopal) Pvt. Ltd. v. Canara Bank, CP (IB)/08/MP/2022, the Bank contended that any lapse was merely technical, capable of rectification during proceedings and not fatal to maintainability.

2. Authority to file Section 7 application:

   • The petition was filed by a Vice President of Axis Bank, acting under a General Power of Attorney dated 07.02.2023.
   • The Bank produced a Board Resolution dated 16.01.2023 and notarised copy of the General Power of Attorney in compliance with the Tribunal’s order dated 06.08.2025.
   • Relying on Rajendra Narottamdas Sheth and Anr. v. Chandra Prakash Jain and Anr., (2022) 5 SCC 600 and Palogix Infrastructure Private Limited v. ICICI Bank Limited, 2017 SCC OnLine NCLAT 266, the Bank submitted that a duly authorised attorney of the Bank, acting under the authority of a Board Resolution, is competent to file a Section 7 application.

3. Bankers’ Books Evidence Act certificate:

   • Axis Bank maintained that the certificates were validly issued in terms of the Bankers’ Books Evidence Act, 1891, confirming that the statements of account were generated in the ordinary course of banking business at the Belgaum branch.
   • The certificates only authenticated the account statements and were legally admissible.