2 hrs ago
Mumbai NCLT Rejects Israel Discount Bank Insolvency Plea
Israel Discount Bank asked a Mumbai tribunal to start insolvency proceedings against Hella Infra Market.
The bank said it was owed about ₹69.20 crore.
The claim was connected to a business deal involving Hella’s Singapore company and an Israeli company called P. Marom.
The bank said a promissory note and a guarantee supported its claim.
Hella Infra Market said the deal was about supplying goods, not a loan made to Hella.
The tribunal agreed that the bank had not proved the claim was a financial debt under the law.
It therefore rejected the insolvency request.
The tribunal issued its order on October 6, 2026.
The Mumbai NCLT rejected Israel Discount Bank’s plea to begin insolvency proceedings against Hella Infra Market.
The bank sought recovery of USD 7.80 million, reported as about ₹69.20 crore, under a promissory note and corporate guarantee.
The tribunal said the bank had not shown that the liability qualified as a financial debt under Section 5(8) of the Insolvency and Bankruptcy Code.
The underlying transaction involved Hella Infra Market Singapore and P. Marom Construction Services, with the bank disbursing funds to P. Marom.
Hella Infra Market argued that the matter arose from a commercial supply arrangement and cited a pending civil suit over goods quality.
- Who
- Israel Discount Bank Limited and Hella Infra Market Limited.
- What
- The Mumbai NCLT rejected the bank’s request to initiate insolvency proceedings against Hella Infra Market.
- Where
- Mumbai, India.
- When
- The order was pronounced on October 6, 2026.
- Why
- The tribunal held that the bank had not established that the claimed liability was a financial debt under Section 5(8) of the Insolvency and Bankruptcy Code.
Bank’s position
Company’s position and tribunal finding
Whether the claim was a financial debt
Bank’s position
The bank argued that the credit facility, promissory note, discounting charges and corporate guarantee gave the transaction the commercial effect of borrowing.
Company’s position and tribunal finding
Hella said the transaction was a commercial supply arrangement and that the bank had not lent money directly to it. The tribunal found that financial debt had not been established.
Basis for seeking payment from Hella
Bank’s position
The bank sought payment from Hella Infra Market under the corporate guarantee after Hella Singapore failed to repay.
Company’s position and tribunal finding
The tribunal noted that the original transaction was between Hella Singapore and P. Marom, and that the bank disbursed funds to P. Marom, not to Hella Singapore or Hella Infra Market.
Key facts
- Tribunal
- Mumbai bench of the National Company Law Tribunal
- Claimant
- Israel Discount Bank Limited
- Respondent
- Hella Infra Market Limited
- Claim amount
- USD 7.80 million, reported as approximately ₹69.20 crore
- Claim components
- USD 7.5 million principal and USD 301,096.2 in accrued interest and default charges
- Order date
- October 6, 2026
- Key legal finding
- The bank did not establish that the liability was a financial debt under Section 5(8) of the Insolvency and Bankruptcy Code.
Quotes
NCLT Mumbai Bench
The Mumbai bench of the National Company Law Tribunal that decided the insolvency application.
“An assignment can transfer an existing debt; it cannot create the statutory character of a financial debt where that character has not been established in the first place.”
freepressjournal.in
Sources
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