NeSL Record of Default Not Mandatory to Establish Financial Default Under IBC: NCLT Cuttack

Case Overview

Case Name: Minaxi Suppliers Private Limited Vs Sun Granite Export Limited
Forum: National Company Law Tribunal, Cuttack Bench
Case Number: CP(IB) No. 14/CB/2026
Date of Order: 05.08.2026

The NCLT Cuttack Bench delivered a significant ruling on a Section 7 petition filed under the Insolvency and Bankruptcy Code, 2016 (IBC 2016), settling an important procedural question: whether the absence of a Record of Default from an Information Utility such as NeSL renders a Section 7 application fatally defective. The Tribunal answered in the negative, admitting the petition and initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.

Background and Facts of the Case

The Parties Involved

Minaxi Suppliers Private Limited, the Financial Creditor and Applicant, is a Non-Banking Finance Company (NBFC) registered under the Companies Act, 2013 and duly registered under Section 45I of the Reserve Bank of India Act, 1934. The Corporate Debtor, Sun Granite Export Limited, is a publicly listed, non-government company incorporated under the Companies Act, 1956, engaged in commodity trading, real estate, and granite slab manufacturing, trading, and polishing activities.

The Loan Transaction

In April 2024, the Corporate Debtor approached the Financial Creditor seeking financial assistance for business expansion and working capital needs. Following Board Resolutions passed by both parties — the Financial Creditor on 27.04.2024 and the Corporate Debtor on 20.04.2024 — a formal Loan Agreement dated 30.04.2024 was executed. Under this agreement:

  • The Financial Creditor agreed to disburse a commercial loan of up to Rs. 4,00,00,000/- in one or more tranches
  • The applicable interest rate was fixed at 9% per annum
  • Accumulated interest up to 31.03.2025 was payable on or before 15.04.2025
  • Subsequent interest instalments were payable on the 7th of each succeeding month
  • The entire outstanding principal and interest were to be fully repaid on or before 30.06.2025

Pursuant to the Loan Agreement, a total principal of Rs. 3,55,00,000/- was disbursed in multiple tranches between 15.10.2024 and 18.01.2025, as corroborated by auditor-certified ledger entries and the State Bank of India bank statement of the Financial Creditor.

Default and Pre-Petition Conduct

The Corporate Debtor failed to pay any interest instalments or repay the principal on the designated due dates. Key documentary milestones leading to the petition included:

  • 28.05.2025: The Corporate Debtor issued a Balance Confirmation Letter acknowledging an outstanding principal liability of Rs. 3,55,00,000/- as of 31.03.2025
  • 01.06.2025 and 21.09.2025: The Corporate Debtor, through written communications, admitted its inability to repay due to adverse market conditions and sought extensions of time
  • 08.11.2025: The Financial Creditor issued a Loan Recall and Termination Notice
  • 15.12.2025: A post-termination Demand Notice was issued claiming the aggregate outstanding of Rs. 3,95,96,011/-, comprising Rs. 3,55,00,000/- in principal and Rs. 40,96,011/- in unpaid interest calculated up to 30.11.2025
  • 30.11.2025: The loan account was classified as a Non-Performing Asset (NPA) in the Financial Creditor's books

The instant Section 7 petition was filed before the NCLT Cuttack Bench on 06.02.2026, citing a date of default of 30.06.2025.

Contentions of the Parties

Submissions of the Financial Creditor

The Financial Creditor maintained that the disbursement of Rs. 3,55,00,000/- was duly evidenced through audited ledger records and the SBI bank statement. It submitted that the Corporate Debtor had not disputed either the execution of the Loan Agreement or the actual receipt of the loan tranches. The Financial Creditor argued that the reference to "Operational Debt" appearing in an accompanying affidavit was a pure typographical error that could not override the substantive financial character of the underlying transaction. It further contended that the settlement proposal dated 11.04.2026 put forth by the Corporate Debtor amounted to an unequivocal admission of liability, and that the application was well within the limitation period since the default date was 30.06.2025.

Objections Raised by the Corporate Debtor

The Corporate Debtor raised both substantive and procedural objections: