NCLAT upholds Canara Bank's insolvency case against S.S. Aluminium, rejects MSME plea
The NCLAT on 2 November 2026 upheld the admission of S.S. Aluminium Private Limited into insolvency on Canara Bank's petition, holding that the company never claimed MSME protection in time.
Key points
- The NCLAT dismissed an appeal by a suspended director of S.S. Aluminium Private Limited against its admission into insolvency on Canara Bank's petition.
- The Cuttack bench of the NCLT had admitted the company on 9 September 2025 for a default of about Rs 15.88 crore, according to the order.
- The NCLAT held that a small business must itself claim the MSME stress framework early, and its order may be appealed to the Supreme Court.
Photo: Joe Mabel / Wikimedia Commons, CC BY-SA 4.0 (cropped). Representational image.
The National Company Law Appellate Tribunal (NCLAT) on 2 November 2026 dismissed an appeal by a suspended director of S.S. Aluminium Private Limited, an Odisha company, and upheld its admission into insolvency on a petition filed by Canara Bank. The Cuttack bench of the National Company Law Tribunal (NCLT) had admitted the company on 9 September 2025 for a default of about Rs 15.88 crore, according to the order.
What Happened
According to the order, the company's loan was declared a non-performing asset on 11 May 2021, and the bank issued a demand notice under Section 13(2) of the SARFAESI Act on 17 May 2021 and a recall notice on 4 October 2021 for Rs 13.48 crore. The company sent three one-time settlement proposals but made no payment, the order records.
The director argued that the bank's petition was time-barred and that the bank had not followed a 29 May 2015 notification of the Ministry of Micro, Small and Medium Enterprises, which sets out a framework to spot and resolve early stress in small businesses' loans.
The NCLAT rejected both pleas. It held that the settlement proposals and an acknowledgement of debt signed on 13 July 2021 kept the petition within time. It found that the company had lost its MSME status on 31 March 2021, never replied to the bank's demand notice claiming the framework's benefit, and raised the plea for the first time in written submissions. Relying on Supreme Court rulings, it said the duty to claim the framework, with proof, lies on the business. The order notes that a resolution plan has been filed and awaits the NCLT's approval.
What It Means
For small-business borrowers, the ruling underlines that the MSME stress framework does not apply on its own. A business that wants its protection must claim it early: by replying to the bank's Section 13(2) demand notice under Section 13(3A) of the SARFAESI Act and applying to the bank's committee for stressed MSMEs, with documents showing its MSME status.
For the company's creditors, the insolvency process continues. The NCLAT's order may be appealed to the Supreme Court.
Source: NCLAT order
Sources & Citations
- NCLAT order — National Company Law Appellate Tribunal