Kolkata-based Priya Food staring at insolvency; Aditya Birla Capital plea against company admitted in NCLT

The National Company Law Tribunal (NCLT), Kolkata Bench, has admitted a petition filed by Aditya Birla Capital Limited to initiate insolvency proceedings against Priya Food Products Limited for a default of nearly ₹10 crore.

The bench, comprising Member (Judicial) Shri Labh Singh and Member (Technical) Ms. Rekha Kantilal Shah, allowed the plea under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, paving the way for a Corporate Insolvency Resolution Process (CIRP) against the Kolkata-based food products company.

The financial creditor, originally Aditya Birla Finance Limited, was legally substituted with Aditya Birla Capital Limited in the proceedings following a scheme of amalgamation approved by the NCLT’s Ahmedabad bench in March 2025.

Background of the Debt

According to the tribunal’s order, Priya Food Products Limited, incorporated in 1994, had availed loan facilities as a co-borrower along with Gee Pee Food Private Limited. The total sanctioned debt amounted to approximately ₹14.04 crore, which included a term loan and multiple lines of credit extended between 2016 and 2022.

The corporate debtor defaulted on repaying the dues, and the account was classified as a Non-Performing Asset (NPA) on August 29, 2023. The total default amount claimed by the creditor as of August 31, 2023, stood at ₹9,90,09,826.07, comprising principal and interest.

Despite a formal demand notice under the SARFAESI Act in September 2023, the company failed to repay the outstanding amount, leading to the insolvency petition.

Tribunal’s Findings and Orders

The NCLT noted that the corporate debtor had been served notice through publication in both English and vernacular newspapers but chose not to appear, leading the court to proceed with an ex-parte hearing.

Satisfied with the evidence of default, including records from the National E-Governance Services Limited (NeSL), the tribunal held that the application was complete and the default was clear. The bench referenced the Supreme Court’s judgment in the Innoventive Industries vs. ICICI Bank case, reiterating that its role is limited to ascertaining whether a default has occurred.

As a consequence of admitting the petition:

• An immediate moratorium has been imposed under Section 14 of the IBC, prohibiting any legal actions, transfers of assets, or recovery proceedings against Priya Food Products Limited.
• Mr. Mahesh Chand Gupta has been appointed as the Interim Resolution Professional (IRP) to manage the company’s affairs during the CIRP.
• The IRP has been directed to make a public announcement inviting claims from all creditors.
• The financial creditor has been directed to pay an initial amount of ₹3 lakh to the IRP to meet the initial costs of the CIRP.

The tribunal has listed the matter for further hearing on October 27, 2025, for the submission of a progress report by the IRP. The management of Priya Food Products Limited has been ordered to extend full cooperation and provide all necessary documents to the IRP within a week, failing which coercive action may follow.

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