NCLT Mumbai admits Section 7 IBC application against Heera Hospitality Private Limited

Background of the proceedings

The National Company Law Tribunal, Mumbai Bench, dealt with C.P. (IB) No.133/MB/2026, an application filed on 03.02.2026 by Union Bank of India as Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The application sought initiation of Corporate Insolvency Resolution Process (CIRP) against Heera Hospitality Private Limited, the Corporate Debtor.

The petition was affirmed by Mr. Amit Bhaskar Rao Thorat, authorised signatory of the Financial Creditor, acting under a Power of Attorney executed pursuant to a Board Resolution dated 14.09.2009.

As disclosed in Part IV of the application:

  • The amount stated to be in default is Rs. 3,45,11,940.74
  • The date of default is recorded as 10.04.2023
  • The Financial Creditor proposed Mr. Mahesh Bagla, Insolvency Professional (Registration No. IBBI/IPA-002/IP-N00689/2018-2019/12207), as Interim Resolution Professional (IRP), who holds a valid Authorisation for Assignment up to 30.06.2027.

Facilities sanctioned and security structure

Nature of the Corporate Debtor’s business

Heera Hospitality Private Limited is a private limited company engaged in the hospitality sector, including management of:

  • Hotels
  • Restaurants and bars
  • Holiday resorts, rest houses, lodging and boarding facilities
  • Clubs and allied hospitality services

Additionally, it provides catering and housekeeping services to various business establishments and organisations in India and abroad, and has been in such operations since about 2010.

Credit facilities sanctioned by Union Bank of India

In 2019, the Corporate Debtor approached Union Bank of India seeking multiple credit facilities totalling Rs. 3,46,47,000 for its hotel and hospitality activities. The Bank:

  • Issued a sanction advice dated 26.08.2019
  • Sanctioned the entire aggregate limit of Rs. 3,46,47,000
  • Fully disbursed the sanctioned amounts on 09.10.2019

The break-up of the facilities as per the sanction and disbursement record was as follows:

  • Cash Credit Facility: Rs. 50,00,000
  • Term Loan – I: Rs. 59,55,000
  • Term Loan – II: Rs. 36,92,000
  • Term Loan – III: Rs. 2,00,00,000

In view of the disruption caused by the COVID-19 pandemic, the Corporate Debtor sought additional support and requested a loan under the Union Guaranteed Emergency Credit Line (UGECL). The Bank sanctioned and disbursed a further Rs. 1.28 crore on 11.06.2021.

Thus, the overall sanctioned exposure under the two sets of facilities amounted to Rs. 4,74,47,000.

Security and guarantees

To secure the above facilities, the Corporate Debtor executed several security documents, including:

  • A Mortgage Deed for immovable property
  • A Composite Hypothecation Deed dated 27.09.2019
  • An undertaking dated 27.09.2019
  • Registration of charge with ROC, Mumbai (Charge Identification Number – 100335537)

Further, the Corporate Debtor also executed a Corporate Guarantee dated 27.09.2019 in favour of the Bank, guaranteeing the Cash Credit/Working Capital limits of Rs. 40 crore extended to Heera-Ind Trading Private Limited. When the account of Heera-Ind Trading Private Limited was classified as NPA on 16.04.2023, the Bank invoked the guarantee on 29.11.2025, but the Corporate Debtor did not respond.

Default and recovery actions by the Bank

Emergence of default

The Corporate Debtor’s accounts became irregular, and repayment obligations were not honoured. As per the Bank’s records:

  • The accounts of the Corporate Debtor were classified as NPA on 10.04.2023
  • A demand notice under Section 13(2) of the SARFAESI Act, 2002 was issued on 24.04.2023
  • A Recall Notice dated 03.07.2023 followed, requiring repayment of outstanding dues

The Financial Creditor also initiated proceedings before the Debt Recovery Tribunal, Aurangabad, by filing an Original Application.

Subsequently, the Corporate Debtor made some intermittent payments and, on 06.07.2024, closed the Cash Credit facility, Term Loan I and Term Loan II. However, Term Loan III and the UGECL facility were not regularised and remained in default.

As of 30.11.2025, the Bank asserted that an amount of Rs. 3,45,11,940.74 remained unpaid in respect of the facilities. The Bank treated 10.04.2023, the date of NPA classification, as the date of default.

NeSL authentication and supporting documentation

By way of an additional affidavit dated 27.02.2026, the Financial Creditor produced NeSL Form D, reflecting the status of “Authentication of Default” as “Authenticated”.

The Bank filed a comprehensive set of documents, including:

  • Authority letter in favour of Mr. Amit Bhaskarrao Thorat
  • Master Data of the Corporate Debtor
  • Detailed working computation of outstanding dues
  • Sanction advice dated 26.08.2019
  • Mortgage Deed and registered charge documents
  • Composite Hypothecation Deed and undertaking dated 27.09.2019
  • Internal sanction note for UGECL facility
  • Section 13(2) SARFAESI notice dated 24.04.2023
  • Copy of OA filed before DRT, Aurangabad
  • NeSL Report
  • Certificate under Section 65B of the Indian Evidence Act
  • Certificates under the Bankers Books Evidence Act, 1891
  • NPA Certificate dated 11.12.2025

These documents were relied upon to establish that a financial debt existed and that default had occurred over the statutory threshold of Rs. 1 crore under Section 4 of the IBC.

Corporate Debtor’s objections

The Corporate Debtor, through an affidavit in reply dated 26.03.2026 affirmed by **Ms.