NCLT Admits Bank of Maharashtra Plea Against Tirumalla India Storehouse

The Mumbai Bench of the National Company Law Tribunal (NCLT) has admitted a plea filed by Bank of Maharashtra to initiate the Corporate Insolvency Resolution Process (CIRP) against Tirumalla India Storehouse Private Limited.

The bank had approached the tribunal under Section 7 of the Insolvency and Bankruptcy Code (IBC), stating that Tirumalla India Storehouse was the corporate guarantor for credit facilities availed by Tirumalla Agro Industries Private Limited. The credit facilities included two term loans of Rs 6 crore and Rs 8 crore and a cash credit facility of Rs 2 crore under the Maha Krishi Samrudhi Yojana.

The bank had sanctioned aggregate credit facilities of Rs 16 crore, but the principal borrower defaulted on repayment of the term loans and in maintaining its cash credit account. The bank subsequently initiated action under the SARFAESI Act and issued a notice invoking the corporate guarantee on October 29, 2025.

The notice was returned undelivered, following which the bank published the invocation notice in newspapers on November 20, 2025, giving the corporate guarantor seven days to clear the outstanding dues. The corporate guarantor had executed a guarantee agreement on January 9, 2023, and had also mortgaged an industrial plot and building in Beed measuring 38,659.50 sq ft and 3,415.69 sq metres respectively, to secure the facilities.

The property was valued at Rs 8.18 crore in a valuation report dated July 23, 2024. The debt defaulted by the Corporate Debtor amounts to Rs 17,98,68,464. The NCLT relied on the bank's records after the corporate debtor failed to appear before the tribunal.

The tribunal held that the corporate debtor had extended its corporate guarantee to the applicant in respect of the dues of the principal borrower, and the principal borrower had defaulted in repayment of the said dues to the applicant. The corporate guarantee was therefore invoked by the applicant, and the corporate guarantor had defaulted in making payment of the outstanding demanded by the applicant.

The NCLT's decision to admit the bank's plea is a significant step in the insolvency process. The tribunal's order will have implications for the corporate debtor and the principal borrower. The case highlights the importance of corporate guarantee and the consequences of defaulting on loan repayments.

The Insolvency and Bankruptcy Code (IBC) has been instrumental in providing a framework for resolving insolvency cases in India. The code has helped in improving the ease of doing business in the country and has provided a mechanism for lenders to recover their dues.

In this case, the bank had taken all necessary steps to recover its dues, including initiating action under the SARFAESI Act and invoking the corporate guarantee. The NCLT's decision to admit the bank's plea is a testament to the effectiveness of the IBC in resolving insolvency cases.

The outcome of this case will be closely watched by lenders and borrowers alike. It will have significant implications for the lending landscape in India and will provide a precedent for future cases. The case highlights the importance of prudent lending practices and the need for borrowers to fulfill their obligations.

The NCLT's decision is a significant development in the insolvency process, and its implications will be felt across the industry. The case will provide valuable insights into the workings of the IBC and its effectiveness in resolving insolvency cases.

In conclusion, the NCLT's decision to admit the bank's plea against Tirumalla India Storehouse is a significant step in the insolvency process. The case highlights the importance of corporate guarantee and the consequences of defaulting on loan repayments. The outcome of this case will have significant implications for the lending landscape in India and will provide a precedent for future cases.