NCLT Admits Insolvency Plea Against Citron Infraprojects Over ₹119.64 Crore Default

The National Company Law Tribunal (NCLT) has admitted a corporate insolvency resolution process (CIRP) against Citron Infraprojects Limited. This decision was made on a petition filed by Canara Bank, which claimed that Citron Infraprojects had defaulted on a payment of ₹119.64 crore.

The petition was filed under Section 7 of the Insolvency and Bankruptcy Code (IBC). Canara Bank stated that Citron Infraprojects had executed multiple corporate guarantees in favour of a consortium of lenders for loans extended to Shrivallabh Pittie Industries Ltd. The principal borrower defaulted in repayment in March 2022, following which the corporate guarantee was invoked through a recall notice issued on March 17, 2023.

Citron Infraprojects opposed the insolvency plea, arguing that the petition was barred by limitation and had been filed merely as a recovery mechanism. The company also claimed that simultaneous proceedings against the guarantor could result in double recovery by lenders. However, the NCLT rejected these submissions, holding that the corporate guarantor's liability arose only after the guarantee was invoked through the recall notice.

The NCLT observed that the date of default was March 25, 2023, making the petition filed on November 5, 2025 well within the prescribed limitation period. The tribunal also stated that the pendency of CIRP against the principal borrower does not bar initiation of insolvency proceedings against a corporate guarantor.

The NCLT's decision is based on Supreme Court and NCLAT precedents, which hold that insolvency proceedings can continue simultaneously against both entities. The tribunal noted that safeguards under the IBC ensure that creditors cannot recover more than the amount actually due.

The admission of the insolvency plea against Citron Infraprojects is a significant development in the case. The company's default on the payment of ₹119.64 crore has serious implications for its financial stability and operations. The NCLT's decision will likely have a significant impact on the company's future and its ability to recover from the default.

The case highlights the importance of the Insolvency and Bankruptcy Code (IBC) in resolving corporate debt disputes. The IBC provides a framework for resolving insolvency and bankruptcy cases in a timely and efficient manner. The NCLT's decision in this case demonstrates the effectiveness of the IBC in addressing corporate debt defaults and ensuring that creditors receive fair treatment.

In conclusion, the NCLT's admission of the insolvency plea against Citron Infraprojects is a significant development in the case. The decision highlights the importance of the IBC in resolving corporate debt disputes and ensuring that creditors receive fair treatment. The case will likely have a significant impact on the company's future and its ability to recover from the default.

The NCLT's decision is also a reminder of the need for companies to manage their debt effectively and to take timely action to address any defaults. The case demonstrates the consequences of defaulting on payments and the importance of seeking professional advice to resolve debt disputes.

Overall, the NCLT's admission of the insolvency plea against Citron Infraprojects is a significant development in the case. The decision highlights the importance of the IBC in resolving corporate debt disputes and ensuring that creditors receive fair treatment. The case will likely have a significant impact on the company's future and its ability to recover from the default.