NCLAT Principal Bench upheld insolvency admission of an aluminium unit, holding that MSME revival protections raised only in written submissions, after the unit lost MSME status, could not block a Section 7 petition.

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, has upheld the admission of S.S. Aluminium Private Limited into the corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016. It held that the MSME revival framework could not be invoked by a unit that had lost its MSME status, never applied under that framework and raised the plea for the first time in written submissions [Jadabendra Pradhan v. Canara Bank & Ors., 2026-juristway.com-3340-NCLAT(New Delhi-[PB])-IBC].

The Bench of Justice Yogesh Khanna, Officiating Chairperson, Barun Mitra, Member (Technical), and Ajai Das Mehrotra, Member (Technical), heard the appeal; the judgment was written by Justice Khanna. NCLT Cuttack had admitted Canara Bank’s petition on 9 Sep 2025 for a default of ₹15,88,33,394.26. The account was declared a non-performing asset on 11 May 2021.

The Tribunal upheld the finding on limitation. The appellant had submitted three one-time settlement proposals and executed an acknowledgement of debt on 13 Jul 2021, admitting its liability.

On the MSME plea, the Tribunal noted that the unit’s MSME status was valid only up to 31 Mar 2021, and that it never responded under Section 13(3A) of the SARFAESI Act or applied under the framework, which requires the enterprise itself to apply. It relied on Shri Swami Samarth Construction & Finance Solution & Ors. v. The Board of Directors of NKGSB Co-op. Bank Ltd. & Ors. (2025) and M/s. Pro Knits (2024 INSC 565), which place the burden on the MSME to prove its status with verifiable documents before the loan turns non-performing. Following Amit Narang v. Aditya Birla Finance Limited & Ors. (2024), it held that an RBI circular governing SARFAESI proceedings is no hurdle in a Section 7 case, which turns on debt and default.

The NCLT had relied on the loan account statements and Forms C and D of the information utility certificate, and left precise quantification to the resolution professional. Finding no reason to interfere with a reasoned order, the Tribunal dismissed the appeal. Letters from 2023 about a rehabilitation scheme, filed for the first time in appeal, did not change the outcome.

2026-juristway.com-3340-NCLAT(New Delhi-[PB])-IBC